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Thailand Guide 101: How To Apply For A Work Permit In Thailand?

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Thailand

Thailand is known for its preferable option of work due to its welcoming culture and friendly people. If one plans to work in Thailand, the essential thing to do is apply for a Work Visa in Thailand. Let us know the details on how to apply for a work permit in Thailand!

To begin with, what is a ‘Work Visa’ in Thailand?

As the name says, a Thailand work visa refers to a permit enabling a person to work in Thailand legally. A work permit refers to a legal document that includes a job description, current occupation, information about a Thai company, and a foreign national’s position statement. A non-immigrant visa is required to apply for a work permit in Thailand. Make sure you obtain the visa before entering Thailand.

Things to keep in mind before entering Thailand:

Thailand

Before entering Thailand, one needs to obtain a Non-immigrant category B visa if they are planning to work in Thailand. Also, if the foreign national (the applicant) is accompanies any family member, they should obtain a Non-immigrant O visa.

Process of application of Non-immigrant visa:

As mentioned earlier, one needs to apply for a work permit initially to obtain a non-immigrant visa. Also, you can apply for the visa online by submitting the required documents. After filling the application form, you need to pay the application fee, which is non-refundable. After these three steps, submit your visa application to any Thai Consulate or Thai Embassy. Now that every step of the application process is finished, you need to wait for the hearing from the Embassy or Consulate.

What are the documents required for a Thailand work permit?

Before you apply for a Thailand Visa, make sure you are prepared with documents such as a Visa application form, Valid passport, Departure Card ™.6, recent passport size photos, professional testimonials, licence or certificates held by you, all academic qualifications, medical certificate, non-immigrant visa, address proof in Thailand, letter of employment, and a copy of additional licences, if necessary.
Suppose you are married to a Thai national. In that case, you will have to submit documents like a marriage certificate, a copy of every page of the applicant’s passport, and the spouse’s household registration and identity card.

The documents need to be provided by the employer:

In case you are an employer, you need to provide documents such as an employment agreement, company’s objectives and certificates, list of shareholders, an application of VAT, financial statement, four Thai employees per work permit, letter of employment with details such as position and salary of applicant, withholding tax of the company, and social security payment filing.

Buying Property: Comparing Foreign Land Ownership In Asia

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Thailand foreign land ownership policy is often criticized by foreign buyers and to make their point the critics often refer to other countries in Asia that allows foreign land ownership. The message being Thailand should change its policy and allows foreigners to own land because otherwise Thailand will be at risk to see buyers going to purchase in Asian countries that have more opens policies in this regard. I think that those critics are unfair to Thailand and I will explain why in this post

As you will see below Thailand attitude in relation to foreign land ownership is not different than the policies adopted by its neighbors and in some regards is even better.

Qualifying the Results: YES – NO – POSSIBLE
To rank Asian countries policies in relation to foreign landownership was actually a difficult exercise.

In the first draft of the above table to the question “Is foreign landownership allowed in this country” I answered Yes for Korea, Malaysia, Taiwan and Singapore and No for Thailand.

But then when starting to draft the remarks column I realized that:

(1) none of the four countries to which I was giving a Yes mark were actually offering an option of unconditional and unrestricted foreign land ownership, and

(2) while foreign land ownership is in principle prohibited in Thailand, Thailand laws contains a lot of exception to this principle therefore to attribute a No mark for Thailand was not only incorrect but unfair.

My first draft was unfair because Yes is an unconditional affirmative. Answering Yes foreign landownership is possible in Malaysia, Korea, Taiwan and Singapore was not accurate because none of those countries offer unconditional foreign landownership.

In the same way, answering No foreign landownership is not possible in Thailand was not accurate as well because no means not at all and there are many cases where foreign buyers may be allowed to own land freehold in Thailand.

This is why I concluded that the most accurate term to rank Asian countries that allows foreign land ownership was therefore “possible” because possible means that something is likely to happen given the right set of circumstances and it is exactly the purpose of the policies of Asian countries in relation to foreign land ownership, to make it possible providing that a certain set of requirement and conditions is fulfilled.

Explaining the Results

I gave the first place to Malaysia because it seems that Malaysia is open to foreign ownership without condition of reciprocity. For example, a Chinese citizen could buy land in Malaysia even if a Malaysian citizen could not do so in China. But the same Chinese could not do so in Korea or Taiwan because China do not offer reciprocity to Korean and Taiwanese.

Singapore only made it 4 which must surprised a few readers. Yes Singapore allows foreign ownership but if you read the fine prints (i.e the remarks) then you will notice that Singapore requests prior government approval for foreign buyers that want to purchase “restricted properties”. Now if you look at the definition of “restricted properties” it covers all residential properties but condominium.

To sum it up the question of foreign land ownership in Asia and of how to rank Asia country is a little bit like the conundrum of the glass of wine. There are only conjectural answers to the question whether the glass is half full or half empty.

In conclusion Thailand policie is by comparizon to its neighbors not as bad as critics said. Should the foreign community in Thailand make a push to request from the Government that it allows unrestricted foreign residential land ownership? I do not believe so. Firstly because this idea is not popular at all among Thai people and secondly in the current political context it is not the right time for such a move. The issue would become a politicised and the debate would not happen. The right move at this very minute is to push for an extension of the leasehold period as I was explaining in my previous post.

Note: This post is an excerpt of Rene Philippe Dubout: “How to Safely Buy Real Estate In Thailand” second edition to be published in November 2009 (the first edition was published under the name “How to Safely Purchase Real Estate Offshore: The Case of Thailand”).

Starting A Business In Thailand (2): The Restaurant

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If you want to start a restaurant in Thailand the first question you will have to ask yourself is: May a foreign investor legally open a restaurant in Thailand? The answer is No, Restaurant and Bar business are services activities under the Foreign Business Act List 3 which activities may be exercised by foreign investors only upon applying and receiving a Foreign Business License. The only exceptions are US Citizens who benefit of the US Amity Treaty and may operate a restaurant under a 100% US form.

The Foreign Free Trade Agreements Override
Now Thailand has executed over the past years and is currently negotiating Free Trade Agreements with several countries. Among the Foreign Free Trade Agreement already enforceable are the Australian Thailand Free Trade Agreement and the Japanese Thailand free trade agreement which are supposedly granting advantages to the citizens of both countries.

Now if you look at the website of the Australian Government Department of Foreign Trade they proudly announce you that Thailand will permit majority Australian ownership of major restaurants or hotels (up to 60%). The previous limit was 49.9%.

Any Australian citizen reading this might think that he is lucky and got himself a major advantage over nationals of other countries. Looks good isn’t it? Now the truth is that the privilege is submitted to the following conditions.

The restaurant must provide full restaurant services (food and beverage preparation and serving services with or without entertainment and the facility must have a minimum area of 450 square meters and the provider must have a minimum paid-up registered capital of 50 million Baht.

But the truth is that this privilege is empty. Assuming that there is out there a Australian citizen that wants to invest into a 50,000,000 THB restaurant the privilege does not allow him to do it by himself. Because at the end of the day Australian citizens are only allowed 60% ownership of the restaurant entity. In other words an Australian citizen that would want to open a 450 SQM and 50,000,000 THB restaurant may only own 60% of the shares worth 30,000,000 THB and will still have to find a Thai citizen ready to invest 20,000,000 THB with him for 40% of the investment. That will be easy isnt it?

Options Available to Non Thai or Non US Citizens
As to the rest of the world you will have two options:

i. You apply for a Foreign Business License. It will take you between 6 to 12 months or more to go through the process and your chances of actually obtaining it are nil because there are no know how in the restaurant business. Maybe if you have a recipe for “3G” “nano” technology pizzas you may have a chance otherwise just forget about the Foreign Business License for this particular activity you have as much chance to obtain it as to obtain US citizenship.

ii. You invest together with a Thai partner into a joint venture to open a restaurant. Your Thai partner will hold minimum 51% of the shares and you will own maximum 49%. Of course your Thai partner will have to contribute 51% of the investment otherwise he/she may be deemed a nominee. Now as a newly arrived foreign investor in Thailand you have as much chance to find a Thai partner than the Nasa to find life on Mars. Because why in hell would a Thai invest money with a foreign investor into a restaurant that the Thai could open by himself ?

He/She-Who-Must-Not-Be-Named
If opening a restaurant in Thailand seems to be such a legal challenge how comes that there are so many foreign investors that are running or owning restaurants in Thailand. I mean not all of them are US citizens?

Starting a Business in Thailand (2): The Restaurant

Because out of desperation and due to the impossibility to start their business the right way in fine (i) or (ii) above many foreign investors have made allegiance to “You-Know-Who” “He/She-Who-Must-Not-Be-Named” that is to say the Thai Wife, Boyfriend or nominee.

That is the sad truth of doing business in Thailand. There is supposedly a legal way to do it but the road that could bring you to it is actually dead end or a “cul de sac” as we say in French.

Now that you have made your allegiance to “He/She-Who-Must-Not-Be-Named” the hard part is to come, actually opening your restaurant.

Other Legal Issues
For this you will need a company, alcohol license, food license, and if you are selling cigarettes you will also need cigarettes licenses (they are two foreign and locals). If you will play music into your restaurant you should also apply for a license to do so. Incorporating a company and obtaining the licenses are quite easy by comparison to many countries. In Thailand there is no maximum number of Alcohol licenses per area. Of course you will only need to apply for all those before the opening of your restaurant.

Of course you will also have to obtain a work permit. But you will not be able to do so for as long as you don’t actually have four Thai employees, which you will not have for the period of implementation of the project. In other words and due to the broad definition of work in Thailand you will be during the period of implementation of your project working illegaly.

The Location
But before to open your restaurant you will have to find the right location, which location will depend of the style of restaurant you will open and of your budget as well. Best place to open a restaurant will be into a commercial center in the area were all restaurants are located such as the basement of Siam Paragon.

Unfortunately, those areas are full and there is a waiting list. Note, commercial centers are not all working as well as Siam Paragon or MBK. A few of them are empties. Then they are other good area like Silom, Saladeng, Convent, Langsuan Sukhumvit from soi 1 to 39.

The Lease Agreement
Once you have selected your location the next important step will be to negotiate the lease with the owner of the premises. Do not accept a lease with a term of less than 3 years and try to obtain a promise of renewal for another 3 years or better two back to back 3 years lease.

Have a lawyer review the clause of renewal because if it is not properly drafted it is not worth the paper on which it is written.

Be sure to rent out from the owner of the premise or from a person with a valid power of attorney.

For a restaurant of around 100 to 200 SQM you will not find a rent of less than 100,000 THB per month in the areas I mentioned above. You should budget between at least 100,000 to 180,000 THB for your monthly rent (or more).

Note, that you will have to pay between two to six months deposit depending of the owner and that the owner may request you to make checks in advance for a period of at least 12 months.

You may or may not have to pay a key money. Owners rarely grant you a grace period for the construction. Meaning that in most of the case you will have to pay the rent during the construction period that may takes between 1 to 3 months depending of your contractor (I have seen restaurant taking more than 6 months to be completed). If your contractor tell you it will takes 1 or 2 month add one month because there will be delay.

Other Issues
Your better have a good concept especially if you open a French restaurant. French food as no appeal value in Thailand, and there are very few French restaurants that do better than survive.

In term of budget depending of the kind of restaurant you will open and the location it may be anything between 2,000,000 THB up to 40,000,000 THB. Average will be around 5,000,000 THB.

Warning

Do not open a restaurant if you are not a professional or if you don’t have a professional in your team as you will fail otherwise. To be a professional does not always mean success. The only 40,000,000 THB restaurant I have seen opened closed after 3 months and it was professionally managed. I have seen a few good restaurants, with a good concept, the right location, excellent food failing without having any clue as to what went wrong.

The point I want to make is that restaurant business is a good business in Thailand providing that you know what you are doing and that you also have some luck.

Because, if you have neither you will lose your investment. If I added all the money I have seen invested in restaurants that fail I would say I have seen investors losing all together more than 100,000,000 THB (without taking into account the 40,000,000 THB one).

Long Term Lease Agreement Between Spouses

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There has been quite a buzz in various forums about the problem of the cancellation of long term agreements made between spouses in Thailand. Indeed many foreigners who married a Thai wife in Thailand will at some point in time purchase a piece of land in the name of the wife and build a house on it for retirement or vacation purpose. And they will for security purpose register a 30 years lease agreement with the Land Department.

As I was already explaining in my book “How to Safely Buy Real Estate in Thailand” (sold out in Thai books shop but can still be purchased on Amazone or Itune) the fact that a long term lease agreement is registered at the land department does not mean that this agreement cannot be cancelled in the future have many foreign investors have learnt in the past.

Now one case of long term lease agreement that can be cancelled or terminated even if it was registered at the land department is the case of a long term lease agreement that has been concluded between wife and husband during their marriage. Indeed Section 1469 of the Thai Civil and Commercial Code does stipulates that “Any agreement concluded between husband and wife during marriage by be avoided by either of them at any time during marriage or within one year from the day of dissolution of marriage; provided that the rights of third persons acting in good faith are not affected thereby.” (as translated by Professor Kamol Sandhikshetrin, LL.B.,M.A).

Do not hesitate to contact me if you have any questions in relation to this matter

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Special Business Tax When Reselling A Condominium Under Assessed Value

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An interesting Supreme Court case in relation to taxation different between a company taxpayer and the revenue in relation to the calculation of the Special Business Tax in relation to the sale of a condominium by a company at a price that was under the Land Department appraisal value (also called assessed value) during the 1997 economic slump

The case was as follow:

The taxpayer a Company) sold a condominium for below its appraisal cost (but at market price) during the 1997 economic slump.

Now the revenue officer assessed the Specific Business Tax (SBT) on the appraisal cost using rules applicable for the registration of rights and juristic acts (the government fees 2% are always calculated on the government assessed value or appraisal value) whatsoever the transaction price.

The Supreme Court held that the revenue officer only had authority to designate the selling price of immovable property at appraisal cost for the registration of rights and juristic acts for personal income tax purposes, not for SBT purposes.

The Revenue Department failed to persuade the Court that the appraisal cost was the market price. Therefore, the price taken by the Company applied.

Thailand Taxes : A Difficult Year Ahead

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The Revenue Department is the largest source of income for the Thai Government representing up to 80% of its revenues. Now as a result of the 2008 crisis the Revenue Department underperformed in 2009 (180 Billion Baht below target) while on the other hand the Government committed huge amounts of funds to support the economy increasing the public debt.

As a result of this unbalance the Revenue Department is looking for new solutions (i) to increase the tax base and to (ii) reduce tax fraud or avoidance.

Among the measures already announced to reduce tax fraud is

– The black listing and criminal pursuits of accounting companies that help their customers to increase their deductible expenses.

– The introduction of a VAT Withholding tax. Finally

– The creation of a nationwide network linking the Revenue Department to the Land Department, Local Administrations and Commerce Ministries.

Overall, businessmen and companies but also individuals may expect a difficult year ahead with a Tax Revenue Department that will become more omnipotent (as a result of the network linking) inquisitive and aggressive.

Note: This post is an excerpt of Rene Philippe Dubout next book: “How to Invest Safely Into Thailand” to be published in January 2010

About the Author:

The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.

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