By Andrew Wynne

Foreigners visiting Thailand for meetings of a company in which they or their employer have invested may already be aware that a work permit is required for this activity. They may not be aware that henceforward the work permit may not be easy to obtain, under new and little-publicised Labour Department rules.

The Working of Aliens Act B.E. 2551 (2008) defines work as any activity involving exertion of energy or use of knowledge, whether or not for wages or other benefits. A non-resident foreigner serving as a director of a Thai company, who travels to Thailand to attend a meeting of the board (circular board resolutions and proxy representation at board meetings no longer being considered permissible), or an investor in a Thai company who attends a meeting of the shareholders in Thailand, is therefore working, no matter how short the visit, and even if no payment is involved.

To engage in work, a foreigner must hold a work permit, which can be obtained only in Thailand. Ticking the “business” box on a landing card confers no authority to work; the information it gathers is purely for statistical purposes. An APEC Business Travel card confers no authority to work. Working in Thailand without a work permit potentially exposes a foreigner to arrest, seeking of bail and facing of criminal prosecution. Although penalties imposed are usually fairly small, fines of up to Baht 100,000 and imprisonment for up to five years are possible. The foreigner also then has a criminal record, which can lead to immigration blacklisting.

In practice Thai law in this area has traditionally been enforced as rigorously as the prohibition against riding of motorcycles on sidewalks – with an occasional arrest, usually in the context of a business dispute when someone with influence has complained to the authorities. Recently there have however been signs of more serious enforcement. At the same time, the rules of the game are being changed – in surprising and unhelpful ways.

There is a longstanding procedure whereby a foreigner arriving in Thailand to do urgent and necessary work of types prescribed by labour authorities may file a notification form TT10, stating the nature and place of the intended work. If this notification is not rejected by labour authorities then the foreigner may work in that capacity for up to fifteen days. The procedure works, though some consider it cumbersome, and there has always been an element of fiction involved, in that the TT10 form requires that an “employer” in Thailand be identified – many business visitors of course have no local employer – and it has been necessary to supply certain documentation in respect of the so-called employer.

On 18 August and on 2 September 2011, labour authorities have however come out with two announcements which have changed the landscape.

In the 18 August announcement, it is specified that supporting documents for a TT10 notification must now include copies of the corporate affidavit of the so-called employer, and of its VAT certificate and its application for VAT registration, all signed by authorised signatory directors. As a result an urgent work permit is no longer obtainable in situations where:

– the so-called employer is not registered for VAT, either because its business is not subject to VAT, for example a school, or because it is a holding company; or

– where authorised signatory directors of the so-called employer are not willing to sign the supporting documents. We have seen a recent instance where local directors in a joint venture company called a board meeting, and then refused to sign supporting documents necessary for foreign directors to obtain urgent work permits needed for them to attend the meeting.

Labour officials have also begun saying that only a small number of urgent work permits will henceforward be issued to any individual. If a foreigner is for example a director of a Thai company holding regular monthly board meetings, it will likely prove impossible henceforward for regular monthly urgent work permits to be obtained, necessary for his attendance at all those meetings.

Continuing in this vein, the 2 September announcement emphasises the need for work performed under an urgent work permit to be both “necessary” and “urgent” in character, and clarifies that this cannot under any circumstances include administrative or academic work, but is limited to work that must be done immediately, failing which damage will be suffered. This is a very narrow interpretation, which can potentially be used as a basis for denying almost any urgent work permit notification. In a recent instance a foreigner who came to testify in Thai court proceedings, and who sought an urgent work permit covering meetings with lawyers outside the courtroom, was refused on the ground that the work was not urgent and necessary. Who can be confident, in the face of such an interpretation, that a company meeting will be considered urgent and necessary?

The typical reaction of labour officials, when the practical consequences of decisions of this type are pointed out to them, is to say that the person concerned should apply for a “regular” work permit. This recommendation is impractical since it would require that the individual go onto the payroll of an adequately–capitalised local employer, doing work of a category that cannot be done by a Thai national, and the time needed to obtain the work permit would under the most favourable circumstances be measured in weeks.

Foreign corporations considering investing together with a local partner in the Thai economy should pause and consider: if their relationship goes awry, they may not be able to represent themselves at meetings in Thailand of the joint-venture company. The position taken by labour authorities on this issue runs counter to Thailand’s professed desire to attract investment. A possible solution would be for the Board of Investment to be more active in facilitating issuance of short term work permits for business visitors. At present the BOI does this to a limited extent, but generally only for foreigners wishing to undertake investment studies.