Wp Needed For Work Done Outside Of Thailand?

[Marvo]

OK, who can answer this one?

I am the director of a Thai company, who, as yet, does not have a work permit.

Let's say I go to the UK and do work (only in the UK) on behalf of the Thai company, the Thai Co. then invoices a UK company for my labour (labour whilst I was in the UK).

The UK company pays the Thai company which in turn pays me a wage.

As I am not "working" in Thailand, tell me, do I need a work permit in this scenario in order to be legal? This may be the clincher as to whether I apply for a WP or not.

[EmptyMind]

OK, who can answer this one?

I am the director of a Thai company, who, as yet, does not have a work permit.

Let's say I go to the UK and do work (only in the UK) on behalf of the Thai company, the Thai Co. then invoices a UK company for my labour (labour whilst I was in the UK).

The UK company pays the Thai company which in turn pays me a wage.

As I am not "working" in Thailand, tell me, do I need a work permit in this scenario in order to be legal? This may be the clincher as to whether I apply for a WP or not.

I might be wrong but reading that it just sounds like you will be invoicing 'yourself' from one hand to pay 'yourself' to another hand and create a bit of paperwork. If your working in the UK then UK laws apply, Not Thai Laws while you are 'working' there.

[sweetchariot]

I can normally give black or white answers to questions like this, but......

Director of a Thai company earning money from said company - my guess is yes you would need a WP, but it is only a well informed guess. I look forward to reading the rest of this thread.

Good luck.

[EmptyMind]

Another uneducated guess from me, But if you are a Director of a Company in Thailand wouldn't that automatically make you employed and working and therefore require a work permit ?

Interesting question.

[Maestro]

Marvo, this is how I see it:

1. Whom the Thai company invoices is immaterial in this context.

2. You, not resident in Thailand, perform a service for a company in Thailand and you receive a remuneration for this service from the Thai company.

3. On the amount of remuneration paid to you, the Thai company will have to withhold income tax and pay that tax to the Thai revenue office.

4. In the function you describe, you are not an employee of the Thai company.

I vaguely remember reading a post last year that the rate of withholding tax varies depending on whether your remuneration is remitted to an account outside Thailand or to an account inside Thailand. Perhaps Sunbelt Asia or somebody who has personal experience with this will come and post about it.

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Maestro

[EmptyMind]

Marvo, this is how I see it:

2. You, not resident in Thailand, perform a service for a company in Thailand and you receive a remuneration for this service from the Thai company.

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Maestro

So in answer to his question about a WP, The answer would be yes wouldn't it, He would need a WP because the Thai Company is paying him ?

(as long as he's living in Thailand of course)

Edited May 19, 2008 by EmptyMind

[Maestro]

Marvo said he would live outside Thailand, ie in the UK, when performing his services for which a Thai company pays him and it is on that basis that I replied.

Let’s not confuse matters with hypothetical other scenarios.

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Maestro

[EmptyMind]

I thought that he said that he would just be going to the UK to do some work. I didn't see anything about him going to live there.

Didn't mean to offend.

[EmptyMind]

The way that I read the post was that the OP was living in Thailand and had created a Thai Company and does not as yet have a work permit.

He wants to go to the UK and do some work on behalf of HIS Thai Company for which the Thai Company will pay him.

It was of my opinion that 'if' he returns to Thailand afterwards and the Thai Company Pays him, then would he need a WP as although he didn't work in Thailand he would be getting paid for it by his Thai Company so that could be called working wouldn't it ?

Also the second thought was that if he was in Thailand as the Director of a Thai Company and receiving payments from the Thai Company then wouldn't that automatically require him to have a work permit ?

I wasn't trying to confuse matters with hypothetical other scenarios, I thought that this was exactly what the OP was asking and maybe this might help either him or help others who actually have an answer to his question.

It wasn't clear as to where he was actually living.

[sweetchariot]

Another uneducated guess from me, But if you are a Director of a Company in Thailand wouldn't that automatically make you employed and working and therefore require a work permit ?

Interesting question.

No.

Many companies are set up as non traders. Most of them are illegal, but they have been, and will be, around for a long time.

[EmptyMind]

Another uneducated guess from me, But if you are a Director of a Company in Thailand wouldn't that automatically make you employed and working and therefore require a work permit ?

Interesting question.

No.

Many companies are set up as non traders. Most of them are illegal, but they have been, and will be, around for a long time.

Thats very true but if this Guy is going to be paying himself it would be interesting to learn if he needs a WP since the work was done outside of Thailand which I guess is what he is asking.

[sweetchariot]

Another uneducated guess from me, But if you are a Director of a Company in Thailand wouldn't that automatically make you employed and working and therefore require a work permit ?

Interesting question.

No.

Many companies are set up as non traders. Most of them are illegal, but they have been, and will be, around for a long time.

Thats very true but if this Guy is going to be paying himself it would be interesting to learn if he needs a WP since the work was done outside of Thailand which I guess is what he is asking.

Which therefore makes his company a trading company.

Sorry, still don't know the answer to this one - gut says WP, head says bed.

night, night

[Maestro]

Yes, EmptyMind, sometimes a post is not as clear as it should be, which is why I stated the premise on the basis of which I answered, reducing the information in the OP to the essentials applicable to the question of the work permit. The essential point I took from the OP was this:

...I go to the UK and do work (only in the UK) on behalf of the Thai company...

Of course, there is also this, which I ignored:

...I am the director of a Thai company...

Does this make a difference? Perhaps it does, and I hope an expert (Sunbelt?) will provide the answer.

If he is a non-executive director – and the absence of a work permit indicates that he is – I believe it makes no difference. If he is an executive director, ie with the authority to make decisions regarding the day-to-day affairs of the company and sign company documents while outside Thailand, does an executive director of a Thai company with residence outside Thailand need a work permit? I think this was discussed once but I cannot remember the answer that was given.

It is a complex topic that Marvo brought up here and others may be interested in the answer. That is why I stated the premise on which I based my answer, an so do did you, in fact (“as long as he's living in Thailand of course”). In the end it will be a legal question, which is why I hope that Sunbelt will be reading this and hopefully give some input. (Sometimes it doesn’t seem fair to me: Sunbelt has to pay good money for his sponsorship and then we expect him to give free legal advice on top of it. He is a genuine philanthropist)

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Maestro

[sweetchariot]

Yes, EmptyMind, sometimes a post is not as clear as it should be, which is why I stated the premise on the basis of which I answered, reducing the information in the OP to the essentials applicable to the question of the work permit. The essential point I took from the OP was this:

...I go to the UK and do work (only in the UK) on behalf of the Thai company...

Of course, there is also this, which I ignored:

...I am the director of a Thai company...

Does this make a difference? Perhaps it does, and I hope an expert (Sunbelt?) will provide the answer.

If he is a non-executive director – and the absence of a work permit indicates that he is – I believe it makes no difference. If he is an executive director, ie with the authority to make decisions regarding the day-to-day affairs of the company and sign company documents while outside Thailand, does an executive director of a Thai company with residence outside Thailand need a work permit? I think this was discussed once but I cannot remember the answer that was given

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Maestro

I think nowadays they would class a non-exec director as a nominee, and create even further problems.

[Maestro]

... a nominee...

Here’s another complication thrown into the discussion, the nominee, a vague term in the legal sense, in my opinion. I have seen it used to refer to shareholders of Thai nationality who were given money by a foreign co-founder of a Thai company to pay the required 51% of capital into a company, but not to a non-executive director, foreign or Thai. Nothing of this kind has been mentioned by the OP and I don’t think it would make any difference anyway with regard to payments made by a Thai company for services provided by a person living outside Thailand, which I understand the OP to be about.

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Maestro

[sweetchariot]

... a nominee...

Here's another complication thrown into the discussion, the nominee, a vague term in the legal sense, in my opinion. I have seen it used to refer to shareholders of Thai nationality who were given money by a foreign co-founder of a Thai company to pay the required 51% of capital into a company, but not to a non-executive director, foreign or Thai. Nothing of this kind has been mentioned by the OP and I don't think it would make any difference anyway with regard to payments made by a Thai company for services provided by a person living outside Thailand, which I understand the OP to be about.

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Maestro

I didn't say that the OP had brought it up, I just mentioned how the perception might be over here.

Sure it's a vague term, but ask most western lawyers how they would class a nominee, and they will tell you a non-exec director.

[Maestro]

I have only seen "nominee" used in Thailand for nominee shareholders in the context I mentioned, not for non-executive directors. Cleary, Marvo is not Thai, yet you say that if he were a non-executive director of the Thai company of which he is a shareholder he would be, in the eyes of "Western lawyers" in Thailand, he would be considered a nominee. Honestly, I have never heard about any such thing.

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Maestro

[Gumballl]

It seems to me that the OP should consider himself as having two jobs: one as Director (which I believe requires the WP), and the other as an Employee who goes to the UK to perform temp work. The Employee, being that he is overseas, does not require the WP. The WP should only allow the bearer to perform duties as the Director while in Thailand. Any duties performed as the Employee while in Thailand would be illegal.

Therefore when the company receives monies from clients, it needs to pay taxes on any profit that is yielded after any/all business deductions have been taken. One of these deductions is the salary to the Director/Employee. The Director/Employee must then pay taxes on their income.

A "profitable" company that does not pay taxes will probably raise eyebrows with the Thai tax collector; in other words, I wouldn't recommend paying the Director/Employee 100% of the profit; some profit should be saved, other expended on capital improvements (e.g. new computers, office furniture, etc).

Anyhow, that's my take on the situation. I tend to think logically, therefore I could be way off with my assessment of the matter with respect to how things operate in the LOS (lack of sense) land.

[EmptyMind]

It seems to me that the OP should consider himself as having two jobs: one as Director (which I believe requires the WP), and the other as an Employee who goes to the UK to perform temp work. The Employee, being that he is overseas, does not require the WP. The WP should only allow the bearer to perform duties as the Director while in Thailand. Any duties performed as the Employee while in Thailand would be illegal.

Well that's exactly what I thought :-) You read my thoughts, So I'm guessing that the origional question of "do I need a work permit" would probably be YES unless any legal guys can advise any better.

The only twist in the story is that the Employer and the Employee are both the same person so that would mean that he is self-employed which might add a whole new story.

Edited May 19, 2008 by EmptyMind

[jstumbo]

(Sometimes it doesn't seem fair to me: Sunbelt has to pay good money for his sponsorship and then we expect him to give free legal advice on top of it. He is a genuine philanthropist)

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Maestro

I help him out by buying a few of his tacos each week.

Plus with the knowledge I have gotten of them from this forum, they would be my first stop if I was setting up a company in Thailand.

[Marvo]

Marvo said he would live outside Thailand, ie in the UK, when performing his services for which a Thai company pays him

Maestro

Sorry if the OP was short of crucial detail. Here is some more info:

• I live in Thailand 8 months of the year on a non-im O.

• I am currently the sole executive director of the Thai company (which currently has no employees)

• Whatever makes best sense, the company can pay me whilst living in Thailand or pay into a UK account.

• I am tax resident in the UK. Income paid to me, and tax paid, by the Thai Co. will be declared in the UK and dealt with under the dual taxation treaty. As I understand, any withholding tax paid in Thailand will just reduce accordingly the tax subsequently assesed, and paid, in the UK.

Issues which spring to mind are that a Thai will also need to be appointed as a co-director of the Thai Co. in order to set up a bank account and action payments to me from this acount, as this itself is considered as "work" for which a permit is required I believe. (Maybe once the account is set up, I can action the payments myself online from the UK ).

Thats very true but if this Guy is going to be paying himself it would be interesting to learn if he needs a WP since the work was done outside of Thailand which I guess is what he is asking.

Just to clarify, I'm not "paying myself". I will do some work in the UK for a Thai company, in which I happen to hold some shares.

If he is an executive director, ie with the authority to make decisions regarding the day-to-day affairs of the company and sign company documents while outside Thailand, does an executive director of a Thai company with residence outside Thailand need a work permit?

Maestro

A question, to which I am seeking the answer. From what I've gleaned from many posts, if a director is making his company decisions and signing papers (accounts audit, balance sheet etc.) while outside Thailand, he has not been required to have a work permit as the "work" was deemed to have been done outside of Thailand. How getteing paid for this work done outside of Thailand affects the wp issue, I'd like to know which Act and which sub point deals with this scenario.

It seems to me that the OP should consider himself as having two jobs: one as Director (which I believe requires the WP)

There are many "foreign" directors of Thai companies with no WP. OK as long as the director is not "working" (signing documents etc.) in Thailand.

The only twist in the story is that the Employer and the Employee are both the same person so that would mean that he is self-employed which might add a whole new story.

Not stictly true if I may interject EM. A company is juristic entity, a person in itself. This "person" is the employer and I am the employee.

At the crux of all this is the question of the classification of "work" done by the employee in relation to his geographical location whilst "working". Under the Alien employment act, a work permit is issued to allow a foreigner to legally work in Thailand. Maybe I should be asking the question: "Does a foreign individual, working in his native country, need a work permit in order to be paid by a Thai company?"

Interestingly,the WORKING OF ALIENS ACT, B.E. 2521 says "The Director-General or official entrusted by the Director-General may issue permit to an alien under paragraph one only after the entry into the Kingdom of such alien.

So, for example, if a Thai company employed a UK citizen who permanently resided in the UK, he could NOT be issued with a work permit even if he wanted or needed one.

Thanks for the interest and input into this thread everyone. Let's hope by the end of it we can all learn something. Maybe we should start a whip-round for the "all-knowing" Sunbelt to contribute .

Marvo

[Marvo]

Just found my way to the Thai Ministry of Labour website where I have dug up this little nugget from the work permit application section:

5. Employer who wish to employ the aliens must comply with the following:

- The employer is not allowed to employ the alien who does not have a work permit...

So does this stop me dead in my tracks? Has my detective work answered my own post? This is of course a translation from Thai (the Ministry's translation) but it looks pretty unambiguous to me.

From all angles we are reminded that a foreigner is not allowed to do "work" in Thailand without a work permit, but including the angle from the employer's perspective, this is like "belt and braces".

Now as one who hates being beaten... I guess I could still do the same work in the UK and NOT be employed by the Thai Co. The Thai company could still bang an invoice into the UK company leaving me with the option of taking money out of the Thai company later via dividend.

Anyone got any idea if Dividend Waivers are a legal option in Thailand as in the UK, I'll need six of these forms signed by the other shareholders.

EDIT: To add dividend ideas.

Marvo

Edited May 20, 2008 by Marvo

[EmptyMind]

Maybe we should start a whip-round for the "all-knowing" Sunbelt to contribute

Maybe you should give Sunbelt a call and ask them or pay for their services to help you At least that way you will have a fast and correct answer.