Working in Thailand: What you need to know about work permits
June 9th, 2010
When do you need a work permit?
You will need a work permit as soon as you engage in work by “exerting energy or using knowledge whether or not in consideration of wages or other benefits “. Of course if you just come into Thailand to negotiate a contract with a Thai counterpart you do not need a work permit for this.
As already explained, you will not need a work permit, to accomplish temporally (less than 15 days) any work of any “urgent and essential nature”, providing that you and your employer have submitted a written notification on a prescribed form and that the notification has been accepted by the Labor Department. Note that if you fulfill these criteria you can enter Thailand and work for the determined period with any kind of visa.
First note that I used the word may in the question and that I will used a lot of should in the answer.
I am not trying to cover my ass here but this is one of those questions where the answer must be taken cautiously. If you are a company director without an authorized signature and do not work for the company or do not participate to the affairs of the company you should not need one.
If you are a company director, with an authorized signature and are based overseas (do not live in Thailand), you should not need one even if, from time to time, you sign documents for the company.
When a foreign company director does actually needs a work permit?
Now if you are a company director and living in Thailand and operating the company’s bank account and signing checks regularly you would better apply for one work permit to play it safe, even if you do not work or receive a salary from the company.
What are the options available to obtain a work permit?
There are many different options. In this guide, we will review the most frequent one, that is to say, the application for a work permit for a foreign employee or director that works for a non-BOI company in Thailand.
Is the process straightforward?
Absolutely, even when you are not under BOI one-stop services, the normal process to obtain a work permit is quite straightforward. The employer may either file the application on behalf of a foreign employee that is still overseas (in order to obtain the letter from the labor department to support the employee visa) or while he is in Thailand.
Note that, in the first case, the work permit will not be issued for as long as the foreign employee did not legally enter Thailand and provide to the labor department a medical certificate and the original passport.
Furthermore the Employer that wants to apply for a work permit on behalf of an employee that is outside Thailand at the time of the application shall have to pay a fine on behalf of the employee.
When may you start to work?
If the employer is a non-BOI company, the Employee cannot start to work as long as the work permit has not been issued by the Labor Department. If the employer is a BOI company, the employer must apply for the foreign employee work permit within 30 days of the issuance of the BOI license.
An employee of a BOI company can start work during the work permit application process. Note that work permits for employees of BOI companies will be issued by the Labor Department within 7 days of receiving the notification that the BOI has approved this employee.
What requirements must a non-BOI employer fulfill to hire a foreign employee?
An employer that is a non-BOI company must, among other things, be a company registered in Thailand and having a minimum paid up capital of 2,000,000 THB per foreign employee.
Furthermore, the company must have applied for a Tax I.D. and VAT registration and will have to attach a map showing the location of the work place, a form that describes the employee’s position and explain the reasons why the company needs to hire a foreign employee.
Finally the Labor Department has recently reintroduced the obligation of having 4 Thai Employees per work permit.We understand that this move follows a complain from the Immigration Department.
Once the New Working Act of 2008 is enforced the Labor Department will be able to charge an additional fee of 10,000 THB when a company hired a foreign employee that is an unskilled or unspecialized worker. Furthermore the Work Permit application fee shall be increased 20,000 THB.
What documents do you need to provide to obtain a work permit?
You will be requested to provide to the administration a valid passport containing his non-immigrant visa or resident book (if he/she is a resident), in addition, the employee will need to provide his/her educational qualifications (diploma) and letter of recommendation from the former employers, describing in detail the applicant’s past job and duties, as well as the duration and place of employment and recent medical certificate from a Thai Doctor.
Finally, the applicant will have to provide pictures, 5×6 cm in size, showing his/her full face and bare head. The pictures must have been taken no more than six months prior to the filing of the application.
Do you have to present yourself to apply for or receive a work permit?
You do not need to go in person when filling the application but you will need to go in person to receive your work permit.
For how long will your work permit be valid?
Under the former Working of Aliens Act of 1971 the validity of work permits was limited up to 1 year. Furthermore the validity of the work permit was tied to the visa period. Under the new act the work permit may be valid up to two years and the validity of your work permit will no longer be tied to the duration of your visa. If you do not have a one year visa you will not need to renew your work permit after every visa run as before. But you will still need to have a valid visa to stay in Thailand
Practically how does it work?
Ok, let’s assume that you entered Thailand with a non-immigrant visa on the 1st July 2009 and that you are allowed to stay in Thailand until the 28 September 2009 (90 days). Under the former Working Act of 2001 if you have filed an application for a work permit on the 14 July 2009 and received your work permit on the 29 July 2009 your work permit will be issued for a working period of 6 months or 1 year but he will be valid only up to the 28 September 2008 because the validity of your work permit is tied up to the validity of your visa.
If your work permit is issued under the new Working Act of 2008 you work permit will be valid up to the 29 July 2011 and its validity is not subjected to the validity of your visa anymore.
How to manage visa and work permit extension?
Under the old Working of Alien act a foreign investor had to extend its work permit every time his/her visa was extended because the work permit validity period was tied to the visa period. During the period of consideration of his/her one year visa by the immigration during which his visa was extended per period of 1 month the foreign citizen had to renew his work permit every month. In other words, the beneficiary of a work permit with a one year visa had to renew his work permit 4 times for the first year and three times per year for as long as he kept and maintained his one year visa. A foreign citizen, without a one year visa had to renew his work permit at least four times per year. Under the New Working Act 2008, if you receive a work permit for a period of 2 years you will not need to extend your work permit anymore during the 2 years period. However you will still have the duty to maintain the validity of your visa under immigration law.
Should you require professional help to manage work permits and visas extension and renewal?
Under the former act it was actually a lot of formalities and paperwork to handle. You do not necessary need a lawyer to handle those formalities but it definitively goes smoothly for you if you do so.
With the new act work permit formalities will be easier to handle but you will still need to maintain your visa. Let a professional handle this for you and will not even notice it. Note that those who have a resident status just have for the time being to renew their work permit once a year.
Is the renewal of a work permit submitted to conditions?
Not always but it can be. The most common conditions are to submit the company yearly balance sheet, the individual personal income tax receipt, or an activity report.
May you get a work permit for any kind of activities?
No you cannot because there are 39 occupations or professions which foreigners cannot exercise, from manual labor, legal or litigation services, shop attendant, hair dresser, architectural work, civil engineering work, gem cutting or polishing, hat making, manual cigarettes rolling, supervising, auditing or giving services in accounting except occasional international auditing, driving a motorized vehicle except aircraft and so on.
What are the other limitations applicable to your work permit?
Your work permit is not a free pass for you to do whatsoever you want with it. Once you received your work permit, you are only allowed to work at the location mentioned in your work permit and to perform the job that corresponds to your job description. To ask a friend to make a work permit for you on his company and then to go work somewhere else does not work. Furthermore, you must always carry your work permit with you and any changes of name or address or nationality of the employee or changes of name or address of the employer must be notified to the Labor Department. Note that failure to fulfill one of these rules can result in sanctions such as fines or a jail term.
What happen if you change Job?
If you change employer, you will need to obtain a new work permit. Under the old act employers has a legal obligation to return the work permit. Under the new act this obligation has been suppressed. However, be sure that your employer return your work permit anyway because if he fails to do so you will not be able to obtain a new work permit.
Does the return of your work permit affect your visa?
It depends on the purpose for which your visa was granted in the first place. If your non-immigrant visa was granted in relation to you working for this employer then your visa has lost its purpose. Same for your one-year visa, if your one-year visa was work related then you will lose your one-year visa as a result of leaving your job. In other words, you cannot stay in Thailand on a one-year visa that was granted because of a work permit once the employment is terminated and the work permit is returned. After having returned the work permit, you must inform immigration. The immigration will cancel the one-year visa and grant the employee a seven-day extension to leave Thailand.
Note that the seven day extension is not automatic anymore and you will need to pay a 1,900 THB fee to the immigration. Note that if you do not cancel your visa you may have a problem when you next apply for a new work permit or the renewal of your one-year visa. Immigration or labor will notice the change of employer into your file and you will have to pay an “overstay” fine for the period you stayed on in Thailand on your visa beyond the return of your work permit.
What are the sanctions applicable to an employee that work without a work permit?
The new act increases the amount of the sanctions applicable to those that work without work permits. The amount of the fines will from now on be from 2,000 up to 100,000 baht and up to a five-year term of imprisonment instead of 3 years. The new law will allow any foreign worker who agrees to plead guilty and to leave Thailand within 30 days of the arrest to be fined without a trial. The fine for the employer will be between 10,000 up to 100,000 baht, no imprisonment. Finally note that officers of the labor department have from now on the power to arrest any foreigner suspected to work without a work permit without a warrant.
The worth of it all was not to solve the problem but to communicate with the client and to explain to them what was happening. From overseas our little local drama must have seems strange. In addition, here is another point I was trying to make in the first part of this guide.
When you come to do business in Thailand, you will often feel frustrated and wonder. But whenever there is a problem, do not act like a bull and throw yourself against the administration, to the contrary try to work it out with the officers, if there is a solution that even lawyers don’t see, they will try to find it for you.
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”.