Want To Start An Amity Company

[dsieg58]

Hi gang,

I'm from the USA, involved in E-commerce, and biodiesel. I've been looking into the various options of opening a company in Thailand and I can't say I'm real enthused with giving over 51% of ownership. I don't have a Thai wife or relatives, so at the very least, this seems to me very risky.

I have been discussing with my lawyers (also an American) opening an Amity company, this would allow 100% foreign owned company with visa and WP.

What we were talking about was opening a "parent" Amity company, then having a number of "divisions" (i.e. partners) or separate companies underneath it. This would enable each to have a visa and work permit, and separate bank account, as well as being able to do business legally in Thailand.

What I'm looking for is partners willing to share the cost for start-up, and any expenses they incur with their own. You can be any nationality, but naturally, "business chemistry" will play a part.

Wanting to tap into the collective knowledge here on the forum board, does any one see any problems with this kind of arrangement? My lawyer tells me this is perfectly legal and do-able.

If interested you can email me from this board or leave a reply with a way of contacting you.

thanks

[squiged]

so you as the parent company owns all the little companies. promise to honour all your debts ?

cross your heart hope to die and on your mothers grave an all ?

[dsieg58]

so you as the parent company owns all the little companies. promise to honour all your debts ?

cross your heart hope to die and on your mothers grave an all ?

Do you promise to honor all of your debts? On your mother's grave and all?

No, I wouldn't own all the little companies. It depends on the legal arrangement. For example, It could be a limited partnership, with one party the managing director, and the other a "silent" partner, or in another scenario, if it was a joint venture, a person and company can come together for the purpose of that business "task." That, of course, would be spelled out in any legal document.

It seems to me, (or at least from my perspective) it is me taking the risk. What if someone wants to come together then skip the country after racking up a number of bad debts? As the parent company, how do I limit the liability on MY part? It seems to me, that would be the likeliest possibility.

dns

[squiged]

See, already we not trusting each other.

Doomed.

I do not know enough about the setup structures of thai companies, but whatever way it is setup, your desire to set up parent and underling companies all controlled by different people as their own little companies, would/could no doubt be a risky option for all.

[VocalNeal]

See, already we not trusting each other.

Doomed.

I do not know enough about the setup structures of thai companies, but whatever way it is setup, your desire to set up parent and underling companies all controlled by different people as their own little companies, would/could no doubt be a risky option for all.

Wouldn't each underling company still need 5 employees and prove enough sales income to justify said work permit.

[dsieg58]

See, already we not trusting each other.

Doomed.

I do not know enough about the setup structures of Thai companies, but whatever way it is setup, your desire to set up parent and underling companies all controlled by different people as their own little companies, would/could no doubt be a risky option for all.

Wouldn't each underling company still need 5 employees and prove enough sales income to justify said work permit.

Not as I understand it. But I may be wrong. It was a question I specifically addressed to my lawyer. The Amity company gets around these requirements. The same as a Thai person in the US wouldn't need to employ 5 Americans to get a green card. The purpose of the Amity treaty is that each national is treated the same as a citizen of the home country for the purpose of business.

But all of these issues would have to be addressed, paperwork drawn up protecting each interest. Of course. if the owner no access to banking accounts and had 1% share in voting rights, no power to make decision regarding "ABC Limited Partnership" and the managing partner (of ABC LP) had 99%, I fail to see where the risk is. But I think sitting down with an attorney of your choice and letting them answer the questions (and not me) would be a good place to start.

I'm not advocating giving me all your money, wives, and children.

But, truthfully, if you had the slightest hesitation, it doesn't make for good business relationship anyway and not something you should do. If you're starting out thinking someone is going to screw you, then everything looks like a cheat, whether it is or not. I'd say, start your own Thai limited company and let 7 Thai's own 51%. You can certainly trust them never to screw you.

But you're missing the point. The only reason I'm looking for partners is not because I want any, or because I want to be Big Dog on Campus, it's because the Amity corp. is the most expensive to set up. (Around $5000 USD) It is to share the expense, cost of set up and on-going maintenance . I don't care who is the "Owner", it can be you. No problem to me. I'm offshore and into e-commerce, there's nothing of mine you could take. And truthfully, probably nothing of yours I want or need. I personally would say, the person with the most to lose, should be the managing director or "owner' on paper.

dns

[stoneman]

I am the owner of an Amity company and we have been in business for almost 20 years...If you have any ideas of doing anything that could be considered heo least bit "unkosher" take my advice and forget it... The overview given to Amity companies by the tax, customs and labor departments is incredible. We have been here for 20 years and have never had once instance of a problem, but we are still constantly checked...Our annual reports are thoroughly reviewed and questioned and the labor dept actually comes to our offices and checks on our Thai employees and also the work permits for our expats...

Like I said, never one problem in 20 years, but we feel like we are under a microscope.. So my advice is make sure you run a clean business...

[dsieg58]

I am the owner of an Amity company and we have been in business for almost 20 years...If you have any ideas of doing anything that could be considered heo least bit "unkosher" take my advice and forget it... The overview given to Amity companies by the tax, customs and labor departments is incredible. We have been here for 20 years and have never had once instance of a problem, but we are still constantly checked...Our annual reports are thoroughly reviewed and questioned and the labor dept actually comes to our offices and checks on our Thai employees and also the work permits for our expats...

Like I said, never one problem in 20 years, but we feel like we are under a microscope.. So my advice is make sure you run a clean business...

Wow! Interesting. Do they ever give a reason for the scrutiny? But I agree, everything has to be 100% legal here.

[Indo-Siam]

Not as I understand it. But I may be wrong. It was a question I specifically addressed to my lawyer. The Amity company gets around these requirements. The same as a Thai person in the US wouldn't need to employ 5 Americans to get a green card. The purpose of the Amity treaty is that each national is treated the same as a citizen of the home country for the purpose of business.

Hello DNS -

It sounds to me as if you have a woefully ignorant lawyer.

Your (his?) ideas about "getting around" the Immigration requirements are wrong. Foreigners working for an Amity company must meet the exact same requirements as foreigners working for a Thai-owned company. And - that includes the owners/directors.

But - at least in Bangkok - a work permit can be obtained by a new company that has no Thai employees - and no bank account. In Bangkok, Thai employees are a requirement for Immigration extensions - not for work permits.

Next - Amity Treaty approval is not awarded "to the company" - it is awarded to allow a company to pursue specific activities - and those activities must be listed on List 2 or List 3 of the Foreign Business Act of 1999. So - once a company has Amity Treaty approval to pursue one or more listed activities (and the approval actually lists specifically numbered activities from the FBA lists), then if the company wishes to pursue an additional activity, it must apply once again for separate Amity Treaty approval of the newly added activity.

You cannot apply for Amity Treaty status for a company that will pursue any activity not listed in the FBA lists - such as manufacturing, or sourcing and export of Thai products - because you do not need Amity Treaty status to purse such activities. A 100% foreign-owned company can (for example) routinely operate a manufacturing business, or an exporting business, without restriction. If your lawyer has not informed you of this, then you need to get a new lawyer.

Your lawyer also sounds excessively expensive (particularly for his erroneous guidance). The additional cost of Amity Treaty registration for a qualifying company should not cost more than about US $2,000 - including government fee for an Alien Business Certificate. The cost of setting up the basic company depends significantly on the amount of capital you will register.

I own and operate a secondary company with Amity Treaty registration - and my main company has orchestrated Amity Treaty status for clients of our incorporation services business. I am not a lawyer - I am a businessman who employs lawyers - as necessary "tools in the toolbox".

Good Luck!

Steve Sykes

Indo-Siam Group

[Chang_paarp]

Steve

Long time no see. Welcome back to this part of cyberworld. It is good to hear from a knowledgeable person. Hope to see more of you.

CP

[Irishrogue]

Steve

Long time no see. Welcome back to this part of cyberworld. It is good to hear from a knowledgeable person. Hope to see more of you.

CP

Hi Steve,

Your response to the issue of an Amity company was very knowledgable. I hope you can assist me in understanding a problem which I am confronting. I spent approximately 2 years setting up a small local division of a Global company on that now has 9 Thai Staff and apart from financial oversight by the head office it operates independantly. When my tenure ended I then began to concentrate on a small Engineering Consultancy 2mn paid up registered capitol 4 Thai employees and have been advised by a lawyer that the Shareholder Equity must be at least 1 million baht as the law was amended in Oct 2007. I am confused as I get conflicting opinions as to what exactly Shareholded Equity is and this from owners of companies with 270 + employees would you perhaps take the time to clarify.

Thanking you in advance for your time.

Kind Regards,

James Kelly.

[Indo-Siam]

Hello James -

First, the rule you are talking about applies only to long-term Immigration extensions of your entry permit, if your extended entry permit is based on qualifying employment, for a qualified employer.

In that case, the rule is that as of the closing date of your last annual financial audit, your company's shareholder equity must exceed 1,000,000 baht. It is purely a matter of one single line on the balance sheet of your company - the line that shows the remaining balance, after your company's liabilities are subtracted from its assets. At the bottom of the balance sheet, this amount is then divided by the number of shares outstanding, to show current net asset value of each share.

Right now, your company's tax year 2007 audit is probably not yet complete. In that case, your company's eligibility to sponsor long-term entry permit extensions will be based on the results of your tax year 2006 audit. Once the tax year 2007 audit is submitted, then this becomes the relevant audit used for applying this rule.

If your company's net assets fall short of 1,000,000 baht , then your company can no longer sponsor long-term entry permits, until after the next audit is filed.

There is a second "audit result" rule that goes along with the equity/net asset value rule - that being a "minimum revenue" rule. Under this rule, in order for a company to be eligible to sponsor long term entry permits in the current year, the REVENUE for the tax year reported in the most recent annual audit must exceed the combined annual salaries of all foreign employees for the current tax year. That is a pretty strange criterion - but it means exactly what it says - referring to a specific line entry on the income statement within the most recent audit report, as compared to a calculation of total gross salaries to be paid to foreign employees by the end of the current tax year.

Good luck!

Cheers,

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[Irishrogue]

HI Steve,

Please excuse the delay in my response I have been out of the country for a few days. Thank you for the detailed reply it is very much appreciated. I can hopefully resolve the problem over the next 90 days and your advice will greatly assist me in understanding what needs to be done.

James Kelly

Managing Director

KELTEC Engineering Consultants,

Omnoi.