* This piece has not been written or contemplated in any legal capacity of the author whatsoever *
Any well-seasoned expatriate employee in Thailand has come to terms that the truth, in theory and per proper compliance with the laws & relevant regulations involved in obtaining a Thai Work Permit is not as easy as it appears, and is on the contrary – a rather arduous ordeal. Inasmuch, the Thai Work Permit has become commercialized with business-minded entrepreneurs actually exploiting the fact of the process’ and requirements’ inherent cumbersome-ness.
The flowchart above provides a very brief overview of the immigrational process for legally continuing being present in Thailand vide Work Permits and Non-Immigrant Business Visas toward a possible ultimate ends of acquiring Thai Citizenship. It is fundamental to note that there are generally 3 major requirements for – in the employer’s perspective – a company to be able to legally employ a foreign employee, obtain the necessary work permit and obtain the proper visa endorsement, reiterated below in brief, along with the respective ‘ways around’ that is manifest in Thailand.
฿ 2 Million. Capitalization per Work Permit
Generally, although the view of practitioners are divided as to whether this registered capital has to have been paid up or not – in practice, the Labor Ministry is usually satisfied with this amount as registered capital regardless of whether it has been paid up.
4:1 Thai – Foreigner Ratio
This (in)famous requirement may be generally circumvented in two ways:
1. “Parking” the expatriate employee’s work permit in another company.
2. In practice, the proof of the employment of such parallel 4 Thai employees are evidenced by producing submitted social security contributions and income tax. Generally, there are companies which have ‘ghost employees’ which lend their names to these registers and where the provider makes such requisite contributions at such minimal rates.
3. A combination of the above two also may be convenient for expatriates that do not qualify for retirement or marriage visas, do not own their own company, but wish to remain here for other reasons.
There are various minimums that are determined according to nationalities of prospective expatriate employees that are changed from time to time. As such stipulated minimums in accordance with the Thai Immigration’s regulations may be rather high and does not reach a compromise between a needy employer or a conceding employee, these minimum rates may not be practical. This is often dealt with ‘declaring’ a salary higher than that actually received by the employee – and corresponding contributions in social security and tax are remitted.
The Cost of a Work Permit
All things considered thus, the question of whether indeed a work permit is the ultimatum is unavoidable. Obviously, the performance of any work by exertion of “physical strength or knowledge whether or not intended for wages or any other benefits” [Working of Alien Act B.E. 2551 (A.D 2008) (“WOAA ’08“)].
In a quantification exercise (under the assumption that multiple entry visas are necessary and the work permits are given for 1 year each):
฿ 1,900 (90-day Non-B) + ฿ 3,800 (multiple entry) + ฿ 3,000 (work permit) + ฿ 1,900 (1-year Non-B) + ฿ 3,800 (multiple entry) + ฿ 9,000 (Social Security ( ฿ 750 x 12)) + ฿ 40,200 (Income Tax (on salary) for a British citizen with a minimum salary of 50,000 (3,350 x 12)) = ฿ 63,600 (a little over 10% of annual salary)
This does not take into account any professional fees that may be involved.
Respective liabilities imposed by law borne in not having a work permit:
Maximum Term of Imprisonment of 5 years.
Fine from ฿ 2,000 to ฿ 100,000.
If the employee is agreeable to leave within 30 days, he/she may be relieved of any prison sentence.
Where the expatriate employee holds a work permit, but is in contravention of other provisions of the WOAA ’08, he/she is liable to a maximum fine of ฿ 10,000.
Rather recently, the employer has been relieved of criminal liability in the employment of expatriate employees in contravention of the WOAA ’08.
Fine from ฿ 10,000 to ฿ 100,000 per offending expatriate employee.
Similarly, where an employer employs an expatriate employee with a work permit, but such employment is in contravention of other provisions of the WOAA ’08, it is liable to a maximum fine of ฿ 10,000.
While the chances of the authorities knocking on the doors of employers are somewhat minimal – it stands true that Thailand’s laws are clearly spelt out and are to be stringently adhered to. There should be no cutting corners and these laws should be duly complied with; failure to do so would constitute an open invitation by both employer and employee to face severe consequences.
For more information on the foregoing, please contact the author JOEL LOO SEAN EE, the Bangkok-based Senior Regional Counsel at Kelvin Chia Thailand and a member of Kelvin Chia Partnership’s Regional Practice Group at Joel.Loo@KCPartnership.com.
This article is published to provide general information only and is not offered as specific advice on any particular matter – This information is to be taken subject to proper consultation with a lawyer.