If you are looking to open a bar somewhere in Thailand there are a number of legal aspects that you will need to consider. Lets review the most common points.
Company Registration
Assuming you are a foreigner and will be looking to manage the bar directly, you will need a Thai company with a minimum of 2 million Baht registered capital (1M if you are married to a Thai).
The registered capital requirement comes when applying for a work permit (which you will need) and increases every extra work permit that you require for foreigners.
You can hold a maximum of 49% of the shares, with 51% required to be held by Thai nationals. The company must have a minimum of 2 shareholders, but we recommend you having at least 3 shareholders, which allows you to be the largest single shareholder, even if not majority owner.
The minority ownership can be managed by assigning yourself preferred shares with double voting rights, which means you can control the company even with a minority shareholding.
The company will need at least one director, which can be yourself, but can also have more if preferred.
Some government departments require a foreign director to hold a work permit if signing documents (others don’t care), so it is a common practice to have a Thai director on formation and assign the foreigner once their work permit has been issued.
Staff
In order to obtain a work permit you must have 4 Thai staff (2 if you are married to a Thai) on the books and registered with social security. Again this number increases per work permit.
Most bars will need around this number of staff so the numbers are rarely an issue, but it is important to be registered with Social Security.
Some Thai businesses will pay staff in cash to avoid paying taxes & social, plus some staff will complain about deductions from their pay. But this is required for your work permit so you will need to manage and deal with it. Social security entitles staff to medical treatment, unemployment pay, a tiny pension payment etc so is of benefit to the staff.
Social security is deducted from staff members pay at 5% of monthly salary, up to a maximum of 750B per month. The employer then matches this amount.
Licenses
The exact licenses you need will depend on your business, but the most common are listed below.
- Alcohol selling license
- Bar license
- Operation License for Health Hazardous Business
- Music License
Visa & Work Permit
Any foreign managers will require a work permit and a visa that supports working. In most cases this will be a Non-Immigrant-B visa, but other Non-Immigrant categories can be allowed too, with the exception of requirement visas.
As mentioned earlier the work permit will require 2M THB registered capital and 4 Thai staff.
Check out our other articles on Visas and work permits which cover the topics in detail.
Monthly Expenses
These are just the most common legal and reporting expenses, there will be many more expenses in regards to actual business operations.
- Social Security on 4+ Thai staff from (company directors are not allowed on Social so you may not need to pay for yourself).
- Salary tax (likely just for yourself, most bar staff will be below the taxable threshold)
- VAT 7% on sales (required if you reach 1.8M THB in turnover, optional below)
- Accountant fee for preparing & submitting above reports (unless you handle yourself, which is possible)
Yearly Expenses
- Visa & work permit renewal
- Company balance sheet – will need an accountant and auditor for this.
- Corporate income tax (assuming you make more than 300k THB profit)
- Sign tax (if you have any signs outside you are required to pay a tax. Make sure the highest word on the sign is Thai language to avoid the highest rate)
- Building tax (officially the landlords responsibility, but often passed to the tenant, check your lease contract!)
- Social security insurance yearly contribution – around 3,000 baht / year.
