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Belaws Home ›› Thailand ›› Blog ›› 5 Reasons Why PEO Services in Thailand Could Be Cost-Effective Solutions for Small Businesses

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5 Reasons Why PEO Services in Thailand Could Be Cost-Effective Solutions for Small Businesses

21/06/2023

Running a small business in Thailand has its fair share of challenges, especially when managing human resources. Hiring, payroll processing, compliance with labor laws, and any relevant tax and social security deductions can be daunting tasks for small business owners. However, a solution can help alleviate these burdens: Professional Employer Organization (PEO) services. 

PEO services are also known as sponsored work permits or Employers of Record.

In this blog post, we will explore how PEO services in Thailand offer cost-effective solutions tailored to the needs of small businesses.

Investment opportunities in Thailand

Key points

  • A PEO acts as a co-employer, handling various HR functions such as payroll processing, tax compliance, and ensuring adherence to labor laws.
  • PEOs allow workers to start working in Thailand quickly without starting their own companies.
  • PEOs allow digital nomads to obtain long-term visa and work permit to work in Thailand.
  • PEO services can help ensure compliance with legal requirements.

What is a PEO Service?

A PEO acts as a co-employer, handling various HR functions for your business. They handle payroll processing, benefits administration, tax compliance, and ensuring adherence to labor laws. Essentially, they become your HR partner, allowing you to focus on your core business activities.

What are the advantages of using a PEO Service?

When managing a global workforce or expanding your business internationally, a Professional Employer Organization (PEO) service can offer a range of significant advantages. Examples include:

Quick access to the Thai market

If you want foreign employees to start working in Thailand as soon as possible or prefer to test the market before establishing a legal entity, utilizing a Professional Employer Organization (PEO) can greatly facilitate the process.

Expanding your business globally, particularly in Thailand, can present challenges and complexities, especially if you haven’t yet established a local entity or are facing difficulties obtaining visas and work permits for your foreign staff. However, with the support of a PEO service, you can navigate these hurdles effectively.

A PEO service helps companies ensure compliance with international employment laws, streamlines the onboarding process for employees, and handles essential accounting and payroll requirements such as salary payments and tax deductions. By utilizing a PEO, companies gain quicker access to the market than establishing a local entity as the initial step.

This valuable assistance from a PEO not only saves time and resources but also offers long-term cost savings. By entrusting these responsibilities to a PEO, you can focus on other critical aspects of your business.

Furthermore, when a foreigner sets up their own company in Thailand, the following is required to support each work permit,  2 million THB in registered capital and 4 Thai staff employed at the company. Furthermore, companies are subject to accounting requirements, such as being registered and paying social security to support a work permit. Using a PEO service means the applicant does not need to worry about these requirements and can begin working in Thailand as soon as they receive their work permit.

Once the applicant’s company is up and running, they can switch their work permit to their new company from the PEO provider.

Access to Work Permits

One of the challenges faced by foreigners who want to come and work in Thailand but don’t have a job offer here or their own company is the absence of a specific visa or work permit that caters to their needs. Unless they meet the eligibility criteria for the Long-Term Resident (LTR) visa, foreigners may find it difficult to legally work and stay in Thailand for an extended period. However, this is where PEO services can assist here.

PEOs can help facilitate proper visas, and work permits for foreigners, which enables them to work legally and enjoy the benefits and protections of formal employment.

Cost Savings through Economies of Scale

One of the significant advantages of utilizing PEO services for small businesses in Thailand is the potential for cost savings. PEOs serve multiple clients, pooling their resources to achieve economies of scale. This enables them to negotiate better rates for employee benefits, insurance, and other HR-related services. As a result, small businesses can access comprehensive HR support and attractive employee benefits at a fraction of the cost of setting up an in-house HR department.

Streamlined Payroll Processing and Compliance:

Managing payroll can be complex, especially considering Thailand’s tax regulations and labor laws. PEO services handle payroll processing, ensuring accuracy and compliance with legal requirements. They stay up-to-date with any changes in regulations, relieving small businesses of the burden of staying on top of these updates and minimizing the risk of penalties for non-compliance.

Access to Expertise and Guidance:

PEOs in Thailand possess extensive knowledge of local employment practices, labor laws, and cultural nuances. They can provide valuable guidance on hiring practices, employee relations, and HR best practices tailored to the Thai market. This expertise helps small businesses navigate the complexities of HR management, ensuring legal compliance.

How can Belaws help?

For more information about PEO services in Thailand, why not talk to one of our experts now?

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If you want to learn more about how our experts can help with your accounting and secretary needs, please click here. For more details about our incorporation services, please click here.

Please note that this article is for information purposes only and does not constitute legal advice.

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Frequently asked questions

What are PEO services ?

The PEO service, or Professional Employer Organization, in Thailand acts as a co-employer and handles various HR functions for businesses. This includes payroll processing, tax compliance, and ensuring adherence to labor laws. Essentially, the PEO becomes a partner in managing HR tasks, allowing businesses to focus on their core activities.

What does a PEO do?

A PEO handles a range of HR functions for businesses. They take care of payroll processing, benefits administration, tax compliance, and ensuring adherence to labor laws. By outsourcing these tasks to a PEO, businesses can streamline their HR processes and have more time and resources to dedicate to their core business activities.

What is the difference between a BPO and a PEO?

a general difference between the two is that a BPO typically focuses on outsourcing specific business processes or functions, while a PEO is more specialized in providing comprehensive HR services and acting as a co-employer.

How successful is PEO?

The advantages and cost-effectiveness of using PEO services in Thailand for small businesses, indicating that they can be beneficial solutions for managing HR tasks and ensuring compliance with legal requirements.

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