Wednesday, July 1, 2015

Thailand - Government Eases Work Permit Rules to Prepare for Asian Economic Community

By Roland Falder, Bangkok, Thailand


At the end of 2015, the Asian Economic Community (AEC) will create a common market of over 600 million consumers with the ultimate goal of a free flow of goods, services, investment, capital and skilled labour. While this is only the beginning of a true common market, local governments are already preparing for the future. Thailand has recently revamped its investment policies and created new regulations for International Headquarters (IHQ) and International Trade Centres (ITC). As part of the efforts, the employment and immigration rules for foreigners have been eased in order to attract more foreign investment.

1. New investment and employment rules for foreigners

a) General requirement of work permit

Generally, foreigners working in Thailand require a work permit. Since the introduction of the Alien Working Act in 2008, the success of a work permit application depends mainly on the registered and paid-up capital of the hiring company. The requirements for a Thai and foreign juristic person differ, further additional requirements such as the number of Thai employees are taken into account, but the ratio of 4 Thais is generally only relevant for a 1 year visa application.

b) New rules on work permit requirement for International Headquarters (IHQ) and International Trade Centres (ITC).

In order to promote the new IHQ and ITC schemes, the Department of Employment announced on March 6 2015 7 activities which are no longer considered as 'working' within the meaning of the Alien Act. The exempted activities are:

- Attending meetings and seminars
- Attending exhibitions and trade shows
- Visiting a client or business negotiations
- Attending lectures on academic matters
- Attending lectures on technical trainings
- Buying products / goods from exhibitions
- Attending board of director meetings of a subsidiary.

c) Online registration of foreigners working in Thailand

Foreigners who stay in Thailand over a period of 90 days must – regardless of their visa status - report to the immigration office every 90 days; however, as of April 1 2015 such report can be filed online. To utilize this service the applicant must submit his / her application within 15 days, but not less than 7 days prior to the end of a 90 day period. After submitting the online application the applicant can check his / her status on a website, the application should normally be approved within 7 working days. Once the application has been approved, the applicant receives a notification stating the due date for the next 90 days report. In case the application is not approved the applicant has to submit another application at the nearest immigration office, whereby he/she has to personally appear with his / her personal original passport, departure card and a completed 90 days report form.

d) New tax benefits

In the context of the new regulations for International Headquarters and Trade Centres the personal income tax regulations for foreigners working fulltime in International Trade Centres or International Headquarters have been modified. A flat tax of 15 % personal income tax is applicable, (instead of regular, progressive, tax rates of up to 30%).

2. Conclusion
Thailand prepares for an open ASEAN market. The free flow of skilled labour is part of the political agenda. The new laws help foreigners to do business in Thailand. It is expected that further legislative activities will strengthen Thailand’s position as one of the most attractive places to live and work in Asia.