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How Many Thai Staff are Required to Support a Work Permit?
28/11/2023
Starting a business in Thailand as a foreigner can be an exciting venture, but it’s important to understand the requirements and regulations that come with hiring foreign employees and supporting a work permit. One key aspect that often causes confusion is the 4:1 employment ratio, which states that for every non-Thai employee you hire, you must employ four Thai staff members.
In this article, we will delve into the details of the requirements for hiring a foreign employee, and any possible alternatives or exemptions.
Key points
- Thai Limited Companies must have 4 Thai employees, 2 million THB in registered capital and be registered to the Social Security and VAT offices to support each permit.
- The above requirements are reduced by 50% for a foreigner married to a Thai national
- BOI companies are not subject to restrictions for hiring foreign experts and skilled workers.
- Branch and Representative Offices are only required to hire 1 Thai employee per foreign employee to support a working visa.
Can my business in Thailand hire foreigners?
Yes, it is entirely possible for a Thai company or a foreign company in Thailand to be able to hire foreign staff. However, typically the foreign company must satisfy strict requirements to be able to do so.
What are the requirements for a company to hire a foreign member of staff?
In order for a Thai company to be able to support a Work Permit, the following requirements must be satisfied.
The 4:1 Employment Ratio
The 4:1 employment ratio in Thailand means that if you wish to hire foreign employees, you must also employ a certain number of Thai staff members. Specifically, for each non-Thai employee, you need to have four Thai employees.
For example, if you want to hire four foreign employees, you would need to employ 16 Thai staff members to meet the employment ratio requirement.
Does the company need to have a minimum registered capital amount?
In order for a Thai company to be able to support a Work Permit, it must have a registered capital of 2 million THB PER foreign employees.
For example, if you want to hire four foreign employees, you would need 8 million THB in registered capital.
Registration with the Relevant Tax Offices
To be able to support a working visa, a company must be registered with the Social Security Office and have made 3 months payments for the Thai Staff. If applicable, the company must also be registered for VAT.
These are important requirements because companies must provide verified documentation, including tax records when applying for a working visa for your foreign employee.
Why does Thailand have these quotas?
While the 4:1 employment ratio may seem burdensome to some business owners, it does serve a purpose. The Thai government has implemented this regulation to ensure that jobs are not taken away from Thai nationals and given solely to foreigners. By maintaining this ratio, the government aims to keep the Thai unemployment rate down and create opportunities for locals.
Are there any exceptions and alternatives to these rules for hiring foreign employees?
While these requirements are generally applicable to all companies, there are some exceptions and alternatives to consider:
The Foreign Employee is married to a Thai national
Should the foreign employee you wish to hire be married to a Thai national, the requirements relating to Thai employees hired and registered capital are reduced by 50% e.g. Two Thai employees and 1 million THB per foreign employee married to a Thai national.
Board of Investment (BOI) Promotion
Unlike Thai limited companies, there are no restrictions on hiring foreign employees. As a result, the quota of hiring 4 Thai employees per foreign national is not applicable.
As per the BOI, a BOI-promoted company shall be granted permission to hire foreign nationals who are:
(1) skilled workers and,
(2) experts.
Skilled workers and foreign experts must have 5 years of relevant work experience and have a university degree in order to be considered as such.
Representative Office
To hire foreign employees as a representative office in Thailand, you must meet specific requirements, including:
Thai Employee Ratio:
One Thai employee is required to support the work permit for one foreign employee.
Minimum Capital Investment:
A minimum capital requirement of 2 million THB is required within the first 3 years. 25% of this capital (500,000 THB) is required within the first 3 months, a further 25% by the end of the first year, a further 25% by the end of the 2nd year, and the final 25% by the end of the third year.
Branch Office
To hire foreign employees as a branch office in Thailand, you must meet specific requirements, including:
Thai Employee Ratio:
One Thai employee is required to support the work permit for one foreign employee.
Minimum Capital Investment:
A branch office must have a minimum capital investment of 3 million THB, fully transferred into a Thai bank account.
Do Part-Time Thai Employees Count as Employees?
In practice, a part time employee can be used to satisfy the Thai employee quota to support a Work Permit. However, the part time employee can only be registered with the social security office one time (i.e. with only the company that is looking to support a working visa).
Therefore, if the part time employee has multiple jobs and has been registered with the Social Security Office for all those jobs individually, they will not be eligible to use the quota to support a work permit.
What can I do if I can’t satisfy the requirements for a work permit?
If you do not have a company registered yet, or the company is currently not in the position to support a work permit, engaging in a PEO service could be a solution until your company is ready.
PEO services offer an ideal solution to quickly begin business operations while working on the company registration process or satisfying the requirements for a company to support a work permit. Company registration can be a lengthy process, potentially delaying market entry by up to four months.
Moreover, PEO services provide a valuable opportunity for clients to test the Thai market and check its suitability for their venture. This trial period allows for informed decision-making regarding long-term investment in Thailand.
However, when looking to hire a PEO service, the Client and the Service Provider must understand that selling a work permit to foreigners in Thailand is illegal.
Any foreigner who hires a PEO service must be the service provider’s genuine and legitimate employer. It is vital that all parties understand that:
- The Thai entity will be accountable for the actions of the foreigner.
- The foreigner must follow the Thai entity’s HR policies and work rules.
A Thai entity may employ a foreigner whose job is to provide services to the client under a valid service agreement. However, both the client and the service provider must make sure that:
- The foreigners’ services match the service provider’s business objectives and licenses.
- The position assigned to the foreigner is legitimate.
How can Belaws help?
For more information about how to obtain a work permit in Thailand, why not talk to one of our experts now?
Please note that this article is for information purposes only and does not constitute legal advice.
Our consultations last for a period of up to 1 hour and are conducted by expert Lawyers who are fluent in English, French and Thai.
Consultations can be hosted via WhatsApp or Video Conferencing software for your convenience. A consultation with one of our legal experts is undoubtedly the best way to get all the information you need and answer any questions you may have about your new business or project.
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Frequently asked questions
How can I get a work permit in Thailand?
To get a work permit in Thailand, you must be employed by a Thai company that meets the following requirements:
- The company must have a registered capital of 2 million THB per foreign employee.
- The company must be registered with the Social Security Office and have made 3 months payments for the Thai Staff. If applicable, the company must also be registered for VAT.
- The company must employ at least four Thai nationals for every foreign employee.
Can I work in Thailand as a foreigner?
Yes, you can work in Thailand as a foreigner, but you must have a work permit. There are a few exceptions to this rule, such as if you are married to a Thai national or if you are working for a BOI-promoted company.
How much does it cost to get a work permit in Thailand?
The cost of getting a work permit in Thailand varies depending on your nationality and the type of work permit you are applying for. However, you can expect to pay around 5,000 THB in fees.
What is the minimum salary for a foreigner in Thailand?
There is no minimum salary for foreign workers in Thailand. However, most employers will pay their foreign employees at least a salary that is comparable to what they would pay a Thai national with the same qualifications.
Can I convert my Thai tourist visa to a work permit?
No, you cannot convert your Thai tourist visa to a work permit. You must apply for a work permit outside the country before you start working in Thailand.
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