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Why a Local Registered Company Is Important For Those Doing Business in Thailand

Transcript of the above video:

Today, we're going to be talking about the importance of legal entities, corporate entities specifically companies that are operating here in Thailand within this jurisdiction. There was a recent article in the Bangkok Post that really came to my attention. By the way, I really enjoy both the Bangkok Post and The Nation. I try to bring out articles from those two outlets and I try to talk on the topics of the day with respect to legal issues as they crop up.

The headline is "Line, YouTube face corporate taxes." This was an article on June the 9th, 2017 on the Bangkok website. There are two things that I felt that are notable on this. To quote the article directly, "The measure of the National Broadcasting Telecommunications Commission (NBTC) is intended to create a level playing field in the industry. While the TV advertising and paid TV industries have long faced tax burdens, OTT platforms (OTT being over the top platforms), OTT platform providers have never paid fees to the state. The established local office must be legal entities said Coronal Natee Sukonrat, chairman of the NBTC's Broadcasting Committee. "It also must have executives who are authorized by the parent firms to issue orders or clarify confusion in any cases initiated by local authorities."

What are we talking about here? Well, two things are going on. The local tax authorities are looking at these so-called over the top platforms and they are talking about these Line and YouTube, online service providers. And it seems right now, the target is more on the bigger service providers, things like YouTube and to me, it seems fairly obvious what the issue is. The issue is "Look, they're advertising in Thailand, you're getting revenue from people in Thailand, we want you to pay some tax in Thailand."

I said this for a number of years, the overall philosophy that I've always maintained in the Kingdom here is "I operate here, I do business here, I need to be paying some taxes here, I'm a foreigner it's not my country so if I presume to operate on this platform, this platform being the jurisdiction known as the Kingdom of Thailand, I should be operating from the mindset that I need to be paying some taxes." That philosophy seems to be about the same as the NBTC feels and I think that probably the revenue department here in Thailand would probably feel about the same way. They want to see some taxes being paid and to me, it doesn't seem to be wholly unreasonable especially coming from my standpoint where I'm someone who does have to pay taxes here in Thailand.

Other operators who are deriving a benefit from the jurisdiction here, it seems only reasonable that they should have to pay taxes here. Reasonable people could probably disagree on that point, that's an issue for a different time and different place but it's important just in a general sense to those who are watching this video because that's the philosophy to maintain if you're a small business owner, somebody just wants to live here, maintain a business of some kind, I hear this a lot from folks that work on the internet "well, I don't really need a company, I just want to live here." It's become pretty clear especially in the aftermath of the so-called good guys in, bad guys out policies as initiated by Thai immigration that you need a genuine reason to be in the Kingdom. And there are ways to maintain long term status in the Kingdom but one of the best ways for someone who's not otherwise say married to a Thai or has Thai children, maintains lawful permanent residence here in Kingdom of Thailand or is in some other way engage in something like menial endeavors or is in a genuine course of study here in Thailand, business visa is about the best option. And in order to maintain long term business visa and long term work permit, one's going to need to maintain a company here in Thailand and that company and that individual are going to need to pay some taxes.

The general philosophy in my opinion is going to stay this way. If anything, I think this philosophy is going to be more stringently applied in the future. Let me give you an example. In the past, I remember there was a time when people, not exactly were scoffing at me specifically but with sort of just say "Well, I don't really want to worry about getting a long term visa." Because there was a time it was a lot easier to get things like a multi-entry visa and things like this and these individuals were saying "Don't worry about that." Well six or eight years ago, they started rushing it up a little bit on things like 30-day stamps and you know, living here on tourist visas. And then not a few years ago but really there's a change two years ago with the good guys in, bad guys out where they said "If you're not here for a genuine reason, we kind of want you to leave." And other things happened with respect to you know, there are people who just used to live in the Kingdom and overstay. Those days are gone.

You can get caught on overstay especially if you get caught on a criminal context, you can be deported for a decade and never be able to come back. So what I'm trying to get through in this video is those that are deriving an economic benefit here in Thailand of any kind of significance should really consider opening or the possibility of opening a registered company here in Thailand because I think that this article and this policy shift, if you will, marks an overall general change in the way of thinking of those who are in positions with respect to regulatory influence and authority here in Thailand.

And I think that in the future, you're going to see this tighten up more and more to the point where if you're here longer than a fairly short periods of time in the Kingdom, they're going to effectively want to know what kind of taxes are you paying to be here. For foreigners living here in Thailand, I think this is something to take to heart and keep in mind because I think much like those who once used to cobble together live the presence here in Thailand and things like tourist visa, there could come a point where those who are basically operating here in the Kingdom say working in online businesses, things like that who aren't wishing to go ahead and incorporate their entity, I think there's going to come a point where this is going to become a problem for those individuals just like visas became a problem for individuals in the past.