Doing Business in Thailand

Work Permits Requirements – Update

In France we have this joke of a Prime Minister giving a speech to restore confidence and saying:

” Last year we were on the brink of a cliff but I’m proud to tell you all that we have made a big step forward “.

It is a little bit what is happening in Thailand with the recent changes brought to the process for the obtaining of work permits in Thailand.

Past situation

Two years ago and in order to facilitate the obtaining by foreign employees of work permits the Labor Department relaxed the requirements for the obtaining of work permits by putting an end to the requirement of four Thai employees per foreign worker.

Of course this criterion (i.e four Thai employees per foreign worker) was still enforced by the immigration department in relation to the one year visa extension.

However the fact that a foreign company director could apply for a work permit even if the employer (the company) did not have four Thai employees was a real progress in the right direction.

Indeed, most newly set-up companies are generally not be able to fulfill this criterion for a few months after their incorporation. This place the foreign director of the company in a difficult situation because if the foreign director of a newly incorporated company is not able to obtain a work permit he will be at risk of being sanctioned for working without a “work permit”

Going Backward

Following a complaint from the Immigration Department (at least that was what i understands happened) the Labor Department has recently changed its policy and reinstated the requirement of four Thai employees for the obtaining of a work permit.

In order to prove that it effectively has four Thai employees the company will have like in the case of a visa extension to provide proof that it has paid the social security fees on the employees’ salaries for the past three months.

Social Security Registration

If it was not enough the Social Security department has also introduced a new process to register employees of companies that have foreign directors.

From now this new practice is only followed by social security offices in a few districts that have an important foreign population. In those districts the Social Security officer will have to conduct interviews of the Thai employees hired by companies that have foreign directors before to register them at the social security.

Those interviews take around 20 minutes per employee. We understand that not all the company employees to be registered will be interviewed but only a few of them. Even if this process is for the time being only used in a few districts it is one more complication that foreign investors did not need.

Note: This post is an excerpt of Rene Philippe Dubout next book: “How to Invest Safely Into Thailand” to be published in January 2010

About the Author:

The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.

http//:www.renephilippe.com

© Copyrights 2009 – Rene Philippe Dubout – This article may be reprinted if information about the author, the websites, and the URLs remain intact

Originally posted 2009-07-28 11:25:22.