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ResourcesCorporate and Tax AdvisoryThailand Tax LawRestaurant Ownership in Thailand for Foreigners: Accounting & Taxes

Restaurant Ownership in Thailand for Foreigners: Accounting & Taxes

Transcript of the above video:

As the title of this video suggests, we are discussing the operation of a restaurant here in the Kingdom of Thailand.  This video is specifically going to provide a brief overview with respect to accounting issues.

Now we have a separate division here at the firm that deals specifically with accounting. Many of our clients operate in the food and beverage business; restaurants, bars, bar and grill, that type of thing and let me tell you, accounting is exceptionally important with respect to maintaining a company, specifically a restaurant here in the Kingdom. This is especially important for foreigners here in the Kingdom looking to maintain things like business visas and Thai work permits; work authorization. 

The reason for this is first of all in order to maintain one's work permit, the Company that is supporting the work permit needs to be able to go ahead and show things like Social Security contributions which I will discuss in another video regarding payroll specifically, but you also need to go ahead and deal with matters pertaining to payment of VAT. Immigration wants to see that taxes are being maintained on the given entity that is seeking a B Visa. Labour Department wants to see the same thing.  Withholding tax needs to be maintained; income tax on that foreign National's income that is derived from their work in a given organization.

Moreover things like job titles are extremely important with respect to working in restaurant in Thailand and the specific work that one does in a restaurant. There are restrictions on occupations that foreigners can have here in the Kingdom. Now it should be noted the emergency decrees that were promulgated in recent years with respect to Thai Work Permits do create a certain amount of flexibility with respect to actually working here in the Kingdom. That being stated, they do not fully allow a foreigner to do just any job in the Kingdom. There are various jobs that will occur in the regular course of business within a restaurant that are considered restricted occupations pursuant to Labour regulations here in the Kingdom.

So there is that side of things but then there's also the accounting itself. So things like a point-of-sale system or a POS system and maintenance of a POS system here in the Kingdom especially one that maintains accurate and transparent records of documentation pertaining to the profit and loss and the expenses of a given business are going to be exceptionally important and the reason for this is not so much to pay one's taxes, which is also very important, but it is also in case the Revenue Department has some disagreement if you will with respect to the tabulation of one's taxes. If one has clear and concise books in order to prove up, and by one I mean a company, a restaurant, an individual or a group of individuals, if a restaurant has clear books to show specifically the money brought in and the money that went out and all the accounting associated therewith, this is very, very good evidence to be able to provide to the Revenue Department in the event of something like an investigation. 

So things to keep in mind with respect to running restaurant here in Thailand one of them is definitely accounting. It should also be noted, accounting needs to maintain because on a yearly basis and an audit needs to be filed with respect to the restaurant and as with any corporation here the Kingdom, any Limited Company, and generally speaking a Limited Company that is employing a foreigner, is going to be right in the sweet spot with respect to this issue, you are going to need to go ahead and file an audited financial statement, balance sheet in order to meet the legal obligations associated with Corporate Law here in the Kingdom.  

So the thing to take away from this video, accounting is important. It is important for a number of reasons. Most notably it connects to many other facets of the business and not only the business but the foreigner maintaining status in the Kingdom. So those who are looking to set up a restaurant here in Thailand, I would say, first of all, note I have seen it to be an incredibly rewarding experience for individuals and groups of individuals here in the Kingdom. I have seen it be rewarding for couples, Thai-American couples, foreign Thai couples who are looking to set up a business together, it can be very rewarding but it's also very labor-intensive and there are regulatory frameworks that have to be adhered to in order to maintain compliance with all the applicable regulations associated with restaurant ownership here in the Kingdom.