Work Permit Law Revised

By: Ukrit Detsiri and Natcha Rattaphan

In spring of this year the Thai government issued a decree to revise the law on foreigners working in Thailand (the “Work Permit Law”).  For many years, the foreign business community has complained about overly restrictive and confusing work permit laws and regulations.  Although it’s early days and like any new law it’s difficult to predict how the revised Work Permit Law will be interpreted and implemented in practice, the text of the new law appears to represent a major change in Thai work permit laws.  A few examples:

The definition of “work” in section 5 the Work Permit Law has been re-defined.  Compare the previous with the current definition of work:

 

Previous Law

 

Current Law
Physical exertion or the use of knowledge for engaging in an occupation or job with or without an intention to obtain wages or any other benefit, except….Engaging in any occupation, with or without an employer, but excluding…

There are several features of this change that are interesting, but two are striking.  First, the previous law stated that even if a person did not intend to obtain wages or benefits, she or he could be engaged in work.  This language does not appear in the current law.  Does this mean that a foreigner who does not intend to obtain wages or another benefit is not engaged in work? Are charitable “workers” now expressly excluded from the definition of work? Second, while this may have been implicit in the previous law, the current law expressly states that a foreigner can still be engaged in work even if she or he does not have an employer.  Is this intended to expressly extend the work permit requirement to “digital nomads” and other foreigners who do not, at least not in the traditional sense, have an employer?

Second, and perhaps of more importance to businesses, is the work permit exemption set out in section 4 of the new Work Permit law.  Compare the previous version with the current version of section 4:

 

Previous Law

 

Current Law
(6) persons performing duties or missions for educational, cultural, artistic, sportive or other purposes as prescribed in ministerial regulation.(6) persons entering from time to time to organize or participate in conferences, give opinions, lectures, or demonstrations at conferences, trainings, company visits or seminars or artistic or cultural exhibitions or any other activities as prescribed by the Cabinet….

Under the new exemption to the work permit law, a foreigner entering from “time to time” to give a talk, lecture, seminar or training is exempt from the work permit law.  The change in language suggests the work permit exemption has been expanded, but there are still questions about how this law should be interpreted.  What does “time to time” mean?  At what point does the giving of opinions, lectures or demonstrations cross over into consulting work, which presumably still requires a work permit?  Does this exemption apply only to foreigners who occasionally (from “time to time”) attend and participate in meetings that are “conferences”?  Does a meeting at a client’s office where guidance and advice on a specific problem or feature of the local business fall within this exemption? Or is that consulting work?

There are also other laws that are relevant to foreigners working in Thailand, such as the Foreign Business Operations Act (FBA”)?  At what point does a repeated series of conferences constitute a business operation subject to the restrictions of the FBA?  Does a repeated series of conferences raise the risk of creating a permanent establishment for tax purposes under Thai tax law?

Although this revised law does seem like a genuine effort to modernize and liberalize Thai work permit laws in many ways, questions remain.  And many of those questions will be difficult to answer unless and until regulations are promulgated and we can see how the authorities are enforcing the new version of Thailand’s work permit law in practice.  It’s still early days.