Minimum salary and insurance requirements for self-employment by my own company

[wml22]

Hi all,

I made a thread about this in the visa forum and thanks to some helpful answers there, I've been able to better refine my questions for this thread.

 

Background:

 

If possible, I want to register a Thai company (a tutoring school) with a Thai wife (using 1 million baht in capital) for the purpose of issuing myself a work permit. 

 

I want the work permit for tutoring English (and possibly other subjects) as a self-employed person (also, I understand we'll need to hire two Thai employees in order to obtain a work permit for me). I'd like to teach students who pay us for academic help, and also would like to teach some poorer students for free as charity work.

 

However, we are only interesting in pursuing this if the following points are correct:

 

Points Needing Confirmation:

 

1) If I am using my marriage to maintain residence through a marriage visa, my work permit will not have a minimum salary requirement attached to it (and not even minimum wage laws will have to be followed for my position, since I am the co-owner of the company).

 

2) My work permit issued to me from my own business can be issued for "teaching" which will categorically permit me to do any tutoring or academic instruction that I want to offer as a self-employed person (i.e. as a person who is technically employed by my own company). 

 

3) My masters degree in a humanities field (which is from a U.S. ivy league university) and my wife's science PhD (she's also a university professor, which is her current job) will qualify both of us to be approved by the government to co-register and operate a tutoring business.

 

Controversies:

 

Online, I have seen conflicting answers to these three questions.

 

For #1: some people are claiming that the Thai government will impose a minimum salary on my position that the work permit is obtained for, regardless of using a marriage visa for residence and therefore not needing a minimum income to qualify for a work visa.

 

For #2: it's not clear that self-employment by my own company in a broad tutoring capacity, instead of working for an actual school, will qualify for any educational exemption from standard minimum salary requirements (there must be an educational exemption or reduced minimum under ordinary circumstances though because you see ESL teaching jobs posted on ajarn.com for 20,000 baht per month, for example, whereas the standard minimum for a non-educational foreign work permit is much higher than that).

 

For #3: some people have implied that my wife and I need college degrees in education specifically, but I think that should not be true in our case since our degrees are higher than BA degrees and she's already a college professor.

 

Other Questions:

 

4) I've heard that our company will have to issue insurance for the three employees on its books. Is it true that even with only three employees, and with small revenue, our company would be on the hook for three monthly insurance payments?

 

5) If it's true about having to pay for employees' insurance, I've heard the amount of each insurance payment is about 1,500 (so the total monthly insurance burden for three employees would be around 4,500 baht per month), is that right?

 

6) Would we be exempt from having to pay the 1,500 baht insurance for an employee if the employee is also an owner (in that case, making myself and my wife employees would leave only one 1,500 baht payment per month that we'd have to shoulder)?

 

7) Would we be exempt from having to pay the 1,500 baht insurance for an employee if the employee has insurance already from another source (in that case, making my wife one of the employees would save us the 1,500 baht for her since she already receives insurance as an employee of the university where she's a professor)?

 

Thanks so much to anyone who is able to shed light on these questions.

 

All the best,

Will

 

Edited October 1, 2019 by wml22

[Arkady]

Quite a broad range of questions and expect those with experience of teaching will chip in with answers to questions about teaching licenses etc. 

 

Re minimum salaries, these are required by Immigration for NON-B visas but, if you are going to be applying for annual extensions based on marriage to a Thai you will be bound by the regulations for that type of visa instead, i.e. the B400k lump sum or the monthly remittances from overseas.  However, when you apply for a work permit, the Labor Ministry will want to know your salary from your employer, regardless of your type of visa, and they have the discretion to reject applications for whatever reason and this can vary from branch to branch.  They will expect you to be earning some sort of salary and may not expect you, as a farang, to be earning much less than the B25,000 a month they see executives from Cambodia, Vietnam and Laos earning, if they are on NON-B visas. Of course, you have other financial burdens to pass to get your marriage extensions but the Labor Ministry is free to take the view that issuing a work permit to someone who is not even earning enough to pay income tax (B15,000 a month) is providing no economic benefit to the country.

 

Regarding social security payments for the required 4, not 3, Thai staff there is a catch 22 here.  The evidence of the Thai staff required by the Labor Ministry is evidence of their enrollment in the social security system under the name of your company and receipts to show they are paid up to date. Yes, it is true that employees may only be enrolled once in the social security system but employing someone who is already in the system under another employment would defeat the purpose, since they would not be counted as an employee for purposes of qualifying for a work permit. The current payment is 5% of salary paid by the employee and the company respectively up to a maximum of B750.  Bachelors degree grads have to be paid at least B15,000 a month and others B6,000 a month.  Therefore your number of B1,500 is correct for the combined employee/employer contribution for a bachelors degree grad.  The Social Security Fund people will come unannounced at some point to visit the company and the staff and so will the Labor Ministry.  Last time I looked directors were not allowed to join the social security system, nor were significant shareholders. So, if you will be a director and a shareholder, you will probably not be eligible yourself, although I heard that this might change.  

 

Labor Ministry offices have discretion to allow less than the minimum 4 Thai employees and sometimes do, particularly in the provinces.  Usually a letter is required from the company to explain why exemption is requested.  This is more likely to be accepted in the first year of operation of a new company than in subsequent years.  I was told in the main Bangkok office several years ago that they were not likely to make exceptions, even in the first year, unless the foreign employee was paying tax on a huge salary, such as B1 million a month, but, as I said, Labor offices upcountry are more likely to be lenient on this issue.

[wml22]

2 hours ago, Arkady said:

[...] Of course, you have other financial burdens to pass to get your marriage extensions but the Labor Ministry is free to take the view that issuing a work permit to someone who is not even earning enough to pay income tax (B15,000 a month) is providing no economic benefit to the country.

 

Regarding social security payments for the required 4, not 3, Thai staff there is a catch 22 here.  The evidence of the Thai staff required by the Labor Ministry is evidence of their enrollment in the social security system under the name of your company and receipts to show they are paid up to date. Yes, it is true that employees may only be enrolled once in the social security system but employing someone who is already in the system under another employment would defeat the purpose, since they would not be counted as an employee for purposes of qualifying for a work permit. The current payment is 5% of salary paid by the employee and the company respectively up to a maximum of B750.  Bachelors degree grads have to be paid at least B15,000 a month and others B6,000 a month.  Therefore your number of B1,500 is correct for the combined employee/employer contribution for a bachelors degree grad.  The Social Security Fund people will come unannounced at some point to visit the company and the staff and so will the Labor Ministry.  Last time I looked directors were not allowed to join the social security system, nor were significant shareholders. So, if you will be a director and a shareholder, you will probably not be eligible yourself, although I heard that this might change.  

 

Labor Ministry offices have discretion to allow less than the minimum 4 Thai employees and sometimes do, particularly in the provinces.  Usually a letter is required from the company to explain why exemption is requested.  This is more likely to be accepted in the first year of operation of a new company than in subsequent years.  [...]

 

Thanks for your fantastic reply. I'm deeply grateful for the high quality of the information. Regarding your statement that 4 Thai employees are needed, this is apparently reduced by half if married to a Thai national (same as the capital registration requirement being 1 million baht instead of 2 million):

 

"If a foreign employee is married to a Thai citizen, he/she is then entitled to apply for a work permit under privileged conditions from the Department of Employment. For such work permit, only two (2) Thai staff need to be employed for this foreigner. The registered capital requirement shall be half reduced or at least 1 million THB for the foreign employee."

 

Source: http://www.mondaq.com/x/794854/Investment+Immigration/How+Many+Thai+Staff+Are+Required+For+My+Business

 

EDIT: The whole point of this plan was that I wanted to have the ability to do charity work and light hours teaching in the community. But it seems that the system has been designed to prevent this. The government just wants to ensure that they maximize tax revenues, so the ability to maintain a good work/life balance is at odds with that. If they have a lot of farang doing charitable teaching work in their spare time, it would detrimentally impact their tax collection by reducing employment of people who are above the income tax salary threshold. Everything when it comes to the Thai government is about sacrificing human rights or social welfare in favor of money IMO. It's frankly an outrage as we all know that marriage/family doesn't provide a path to permanent residence. A shame it's like this but they're already paying the price for this short-term greed mindset with Indonesia and Vietnam far outpacing them in foreign investment now.

 

I don't think it's worth it to screw with this. If we settle in Thailand I'm better off just buying more extra houses for the rental income. Thus increasing social and economic inequality while the locals who don't have good English learning opportunities suffer. (My Thai partner's university position is in a relatively rural area so there aren't good English learning opportunities for the locals.) Really a shame but this is how the Thai government wants things to be.

Edited October 2, 2019 by wml22

[finnishmen]

if you want work you own corporations you need first be 4 thai worker, then you can take work permit and working too. and work minister need know how much you pay salary minimum salary in law have 1 worker 300 B/day 4 worker have 1200 B /day need pay. and insurances,

[khunPer]

To answer little simplified, from my knowledge:

 

There is no minimum salary on a Work Permit – apart from the official little over 300 baht a day, slightly different from province to province – the minimum salary is a requirement by Immigration when applying for extension of stay based on work, i.e. originally a non-immigrant "B" visa, and the minimum salary is depending of country of origin.

Quote

What is the minimum salary for an expat in Thailand to be able to extend his visa?

When a foreigner has a work permit in Thailand, he is able to extend his permit of stay in the kingdom to one year (or what most people call one year visa). However, there is a schedule of different monthly salaries earned by different nationalities that the National Police Bureau of Thailand used to determine if they will extend the expatriate’s permit of stay.

• Countries in Europe (except Russia and eastern Europe), Australia, New Zealand, USA, Canada and Japan – Baht 50,000
• South Korea, Singapore, Taiwan and Hong Kong – Baht 45,000
• Countries in Asia (except Japan, South Korea, Singapore, Taiwan, Hong Kong, Cambodia, Myanmar, Laos and Vietnam), Eastern Europe, Central America and South America, Mexico, Russia and South Africa – Baht 35,000
• Countries in Africa (except South Africa), Cambodia, Myanmar, Laos and Vietnam – Baht 25,000

Source: Minimum Salary for Foreign Employees for Work Permit and Visa Extension

 

There is no minimum salary for teachers.

 

If married to a Thai there need to be two employed Thai workers in a company for one foreign WP, the Thai wife can be one of them.

Quote

f a foreign employee is married to a Thai citizen, he/she is then entitled to apply for a work permit under privileged conditions from the Department of Employment. For such work permit, only two (2) Thai staff need to be employed for this foreigner.

There is no requirement for a non-immigrant-B-visa in connection with such work permit, the non-immigrant-O-visa is sufficient.

Source: How Many Thai Staff are Required for my Business 

You need to pay Social Security for hired staff – also good to pay, to prove you has the staff employed – which is 10 percent (at the moment) of the monthly salary. It's paid monthly, and minimum is 500 baht, and maximum is 1,500 baht. Normally the worker pays half, i.e. 5 percent, and the employer pay the other half.

It's worth paying SS for yourself also, as SS includes healthcare for public hospital – also available for foreigners – and even later you can continue with a voluntary small payment (little than 500 baht a month) and keep your healthcare insurance. However, there might be special rules for foreign teachers employed in a private school.

Quote

Foreigners legally working in Thailand must also register to the social security office. Registered foreigners will have the same benefits as insured Thai nationals. The coverage does not include the following:

a. Regional, local and foreign government employees

b. Thai nationals working in a foreign country

c. Private school teacher or headmaster

d. Students or undergraduate trainees employed by schools, universities or hospitals

e. judges

f. civil servants

g. employees of state enterprises.

Source: Thailand Social Security Fund 

 

In general the US SS has a very good informal page about Thai SS: Social Security Programs Throughout the World: Thailand 

 

There are more here about teachers and SS: Policy Challenges for the Social Security for Private Employees (pdf) 

and here: Social Security Systems in Thailand (pdf)

[MarleyMarl]

1 hour ago, khunPer said:

It's worth paying SS for yourself also, as SS includes healthcare for public hospital – also available for foreigners – and even later you can continue with a voluntary small payment (little than 500 baht a month) and keep your healthcare insurance. However, there might be special rules for foreign teachers employed in a private school.

Source: Thailand Social Security Fund 

I don't believe SS is available if you are the director of the company. So in that case you'd make your wife the director would be the best bet.

[khunPer]

2 hours ago, MarleyMarl said:

I don't believe SS is available if you are the director of the company. So in that case you'd make your wife the director would be the best bet.

If you're paid a salary as managing director, yes;

if you're a board member only, no, as board members don't need a Work Permit.