Work permits, visas and the relationship between the two are a source of considerable consternation and confusion for investors and other foreign business people in Thailand. The process of obtaining a work permit and a long-stay visa is complicated and requires approvals from separate government agencies. Adding to the complexity, the laws, regulations and policies, written and unwritten, governing visas and work permits change often. For example, on 23 February 2008 the Foreign Workers Act, B.E. 2551, came into force, which among other things, provides for the creation of a deportation fund that had not existed under prior law. There are, however, a few key points that any foreigner doing business in Thailand should always bear in mind.
Foreigners working in Thailand must have a work permit before commencing work, and the definition of work is extremely broad. Work is defined as “engaging in work by exerting energy or using knowledge whether or not in consideration of wages or other benefits.” Many foreigners find this broad definition of work counterintuitive because it can encompass such short-term activities as participating in a single business meeting. Arrests of foreigners for work permit violations do occur, particularly in contentious situations. (There are exceptions for, among others, members of the diplomatic corps, but these exceptions are irrelevant to most foreigners who want to “work” in Thailand).
Thai embassies and consulates cannot grant work permits. Foreigners often confuse non-immigrant “B” (business) visas with work permits and believe such visas grant them the right to engage in work on a short time basis in Thailand. They do not.
Step 1 – Appropriate Visa
When a foreigner intends to apply for a work permit, the first step in the process is typically for that foreigner to apply for a non-immigrant category “B” (business) visa at a Thai consulate or embassy outside of Thailand. A business visa is valid for only 90 days, and is a necessary pre-requisite to submission of an application for a work permit.
Step 2 – Work Permit
Work permit booklets can only be issued by the Alien Occupation Division of the Ministry of Labour. To obtain a work permit, a foreigner must have the appropriate qualifications for the job, and various other criteria, such as minimum paid in capital requirements for the employer, must also be satisfied. The application usually takes one week to process.
Step 3 – Long Term Visa Extension
Even though a business visa is not a work permit and separate agencies are responsible for issuing visas and work permits, the two are related. On the strength of that work permit the foreigner may be able to apply to the Immigration Bureau for a long term visa, subject to satisfying various other criteria, which in many cases will include a requirement that the employer have a Thai to foreign employee ratio of at least 4 to 1. A work permit can periodically be renewed in tandem with long term visa renewals.
If an investor meets certain criteria (typically pertaining to the size of registered capital or total assets) a work permit and one year visa applications for its foreign employees may be processed within one day at a One Stop Service Centre of the Board of Investment (BOI). Otherwise, the process for obtaining a work permit generally takes about one week while the process for obtaining a long stay visa may take a month or more. Obtaining a work permit and one year visa at the One Stop Service Centre is only possible if the foreign employee will have a managerial position in the company or special expertise.
Persons who work under privileges granted by the Industrial Estate Authority of Thailand (IEAT), BOI or under other privileges granted special status by the Thai government, will generally receive a work permit and visa for a period of between one to three years. The criteria for work permits under IEAT, BOI or other privileges are different than those for regular work permits and will usually take four to six weeks to process.
Generally, a work permit authorises a foreigner to work only in the province(s) of Thailand where his or her employer has a registered business presence. A recent exception to this rule arises under the Thailand-Australia Free Trade Agreement, pursuant to which Australian nationals working for a Thai or Australian employer should be able to obtain work permits authorising them to work anywhere in Thailand.
Another important exception to these general rules is that a foreigner can obtain an urgent work permit valid for up to 15 days to perform certain types of work, including attending business meetings or performing internal audit work. A work permit of this type can usually be obtained within a day of arrival in the country, and does not require the applicant to hold any particular type of visa. Formerly, holders of APEC cards could work on a temporary basis, but the Alien Occupation Division of the Labour Ministry has taken the position that holders of APEC cards must also get urgent work permits when they “work” in Thailand.
The regulations and policies pertaining to work permits and visas change frequently. The Foreigners Workers Act that came into force in February 2008 introduced three changes to Thai law of particular relevance to foreign investors and expatriates. First, the maximum penalty for working without a permit was increased from three months to five years imprisonment; the new law also provides, however, that these penalties can be waived if a foreigner agrees to pay a fine and immediate deportation. Second, the new law introduces a deportation fund to cover the costs associated with deportation of foreigners. The new law provides that employers of foreigners must contribute to this fund and may deduct amounts from salaries paid to foreign employees to cover these contributions. Third, the new law extends the maximum time period for ‘regular’ work permits from one to two years. As of the date of this publication, the requisite regulations pertaining to the latter two changes have not yet been promulgated.