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Thai Work Permit
Starting a Business?There are things that you might want to know before setting up a business in Thailand. It was stated in the Foreign Business Act of 1999, that there is no general prohibition in owning a business in Thailand, but there are, however under Section 8 of the Act, limitations for foreigners in carrying out a business in Thailand. Under Section 8, there were three listed limitations of businesses that a foreigner can have but only the 1st in the list is 100% not permissible, unlike the 2nd and 3rd which is allowed with approval. Listed below are the following businesses that foreigners cannot engage in:
- The Press, radio broadcasting station, or radio and television station business
- Rice farming, plantation, or crop growing
- Livestock farming
- Forestry and timber processing from a natural forest
- Fishery, only in respect of the catchment of aquatic animals in Thai waters and specific economic zones of Thailand
- Extraction of Thai medicinal herbs
- Trading and auction sale of antique objects of Thailand or objects of the historical value of the country
- Making or casting Buddha Images and monk alms-bowls
- Land trading
How to Start a BusinessThere are different ways that you can start your business depending on the type of business that you are going to have. But, listed below are general steps on how to start a business in the country that you will surely grow, and be successful with.
- Choose your Type of Business/Company
Here are some types of business that you could choose from:
- Registered Ordinary or Limited Partnership
- In this type of business, this run by 2 persons. One having limited liability and the other having unlimited liability.
- Representative Office, Regional Office, and Branch Office
- Representative office and Regional office are options for any international companies who want to obtain a juristic person number from the Thai government authority without having to set up a separate entity or apply for a Foreign Business License (FBL). And able to open physical offices in Thailand to conduct activities and engage in the "non-income related activities," as permitted by Thai law.
- Branch office can obtain a juristic person number and do any "income-related activity" on behalf of its head office in Thailand.
- Limited Company (which you have two options)
- Private or closely held company has limited numbers of shareholders.
- Public company which requires you to have a minimum of 15 shareholders for it to be formed and registered.
- Registered Ordinary or Limited Partnership
- Choose your Name of Business/Company
If you are going to proceed with starting up a business in Thailand, it is best to prepare a name for your business. Choose 3 possible business names for you to check if the name is already taken or already registered by someone. Choosing or preparing a name is for you to have a smooth process in registering your business.
Also, to remind you, that along with the business name one must also already have a business address that you could set up your business within Thailand.
- Plan your Business/Company
One must prepare and have detailed information about the business. From visions and missions to goals of such a company. Identify what the business is all about, the services, the products, identify those kinds of things in your business.
- List your Shareholders
- Register your Business
Now that you have your proposed name of the business, details that describe your business, the address of your business, and the list of your shareholders. You can register your company in the Department of Business and Development (DBD). Along with the registration, are the payments required. A reminder to those who cannot read the Thai language, the language used upon registering will be in the Thai language. So, one might need assistance in filling up some forms.
In this part of the process, you will obtain licenses to open the business and taxpayer identification for your business. If you register a private business, it will take weeks to obtain it. If it is a public business, it will take months. And, once you are registered, you can open a bank account for your business.
Have a list of your shareholder. One important thing to remind you of listing your shareholder is that at least one of your shareholders is Thai. One purpose of having a Thai shareholder is the fact that they know Thailand better than you. They know how they run business in their own country and another thing is the fact that they are local and know how to communicate with other Thai citizens.
Once you already have a list of shareholders, one must have an agreement with each other of each other’s shares, liability, and other responsibilities within the business. And make sure to have documentation or proof of the agreement.
Now, this is the part where one might hesitate in starting a business in Thailand. One important thing to know about owning a business in Thailand is that foreigners cannot own more than 49% of the business. But there is a way to own 100% of your business, it is different and it is the Amity Treaty. Another downside is that the Amity Treaty can be only set up for Americans.
Visas and Work PermitsIn Thailand, a non-immigrant visa B is required before you may apply for or be granted a work permit. It is best if you can get it before you arrive in Thailand. Though it takes a lot of effort, a lot of processes for you to have a business in Thailand. It will be easier once already registered. A reminder once you are done with all the processes: Always be responsible, pay taxes and follow rules to avoid troubles and added complications in your stay and business in Thailand.
Like other countries around the world, Thailand requires foreign nationals who have the intent to work in the Kingdom to have the appropriate visa and work permit. Non-compliance thereof merits stiff penalties as afforded by current immigration and employment laws of the country.
Prior to 2017, aliens are required to obtain work permits before they were to start working in Thailand. However, from the period mentioned above and then in 2018, the current king of Thailand, King Vajiralongkorn, issued two decrees that repealed few items of the Alien Workers Act of 2008.
Decree No. 1
Under this Royal Decree No.1 of 2017, a foreigner issued with a work permit must work in accordance with the details of the document he was issued and granted with. This, therefore, the foreign worker must work at the same company, at the same location and capacity as what had been emphasized on his work permit. If he had to transfer to an affiliate of such company or that he had to transfer to a branch of his company at another location, he had to inform and obtain permission from the employment office otherwise potential legal issues may arise.
Decree No. 2
Royal Decree No. 2 of 2018 have repealed some sections of Royal Decree No. 1 including Section 71. With this, work permit holders may now work at another location, on a different company or working condition as long as this new type of work is not among the list of jobs foreign nationals are restricted from engaging with.
Further, the requirement on foreign workers to inform the employment office of any changes on their work details such as work location has also been repealed by the 2nd decree though it remained in certain instances as an option. Nonetheless, it also worthy to highlight that names of the new employers must still be reflected on the work permit.
If a foreign worker has been transferred by his company at another work location in Thailand then such employer is duty bound to inform the employment office of such change. Updates such as this may now be done online.
Other Updates on Thai Work Permit
Foreign workers may now file for their work permit applications online far from the previous system wherein a tedious process on personal filing is needed.
In case of violations of the decrees, both the foreign employee and employer may now be imposed with reduced fines. As an example, under the previous law, if a foreign worker failed to report with the employment authorities his new work location, he may be imposed with a 100,000.00 fine THB. After March 28, 2018, violations thereof may be given with a reduced fine from the previous amount to 50,000.00 THB.
After the amendments, a foreign worker is not required to carry his work permit at all times. He may still be asked by the employment to produce his permit but he does not have to show the document during an inspection. He may do so based on the date or time-frame given to him by the employment official.
Personal Income Tax is applicable to an individual whose income came from employment or from a property located within the country but the income from it was either paid with in Thailand or at a foreign soil. The Personal Income Tax is considered as a principal tax and classified as a direct tax.
From time to time it does make the press when a foreigner or a few of them are caught and arrested in Thailand for working without a work permit. Working illegally has many issues for both the employer and employee in Thailand. We have listed the current penalties for working illegally in Thailand.(more…)
If you are a foreign journalist going to or wanting to work in Thailand then there are a few basic rules which you need to meet. The requirements for a work permit in Thailand for a foreign journalist is listed as follows by the Foreign Correspondents Club in Thailand. Note what needs to be applied for and also the procedure as it is not the same as other work permits.(more…)
The Thai government fees for a work permit in Thailand varies according to the length of time of the work permit. Most work permits in Thailand tend to be 1 year work permits as it is normally based on the length of the contract. Most employment contracts in Thailand are 12 month contracts hence the work permit will be as long as the contract is for. If you have a 3 year contract the government fees with be for a 3 year work permit.