Work Permit and Business Operating At A Loss

[connda]

Correct me if I'm wrong, but I thought that one of the stipulations for a business to hire foreigners and supply them with a work permit is that the business must show a profit.
If that's the case, then what will be the ramifications of this Covid-induced economic downturn on businesses that will operate at a loss in 2020-2021.  Will their foreign employee be unable to renew both their Work Permits and therefore unable to renew their Non-B visas?

[ubonjoe]

There is nothing in the immigration order that states a company must make a profit to apply for extensions based upon working.

As long as they are paying your salary, paying taxes for it and proof of social security payments being made I would think it would not be an issue.

[FritsSikkink]

Not an issue at all, you can still extend.

[blackcab]

The business does not have to operate at a profit, but on the other hand it should be a real business that is a going concern.

[connda]

1 hour ago, blackcab said:

The business does not have to operate at a profit, but on the other hand it should be a real business that is a going concern.

Just saying that in the current economic downturn a lot of businesses may end up operating at a loss.

[FritsSikkink]

9 minutes ago, connda said:

Just saying that in the current economic downturn a lot of businesses may end up operating at a loss.

Which won't be of any influence on the visa or work permit.

[yankee99]

My business lost money the1st 3 of 6 years never mentioned regarding work permits

[timendres]

I clearly remember reading a specific clause of some requirements that a foreign company must show at least 500,000 THB profit per year. My accountant confirmed that this was true. Unfortunately, I cannot remember where I saw it. That said, neither immigration, nor the labor department, will be the ones checking that. If the requirement were ever applied, it would involve dissolving the business, after which work permits would become invalid, and extensions would be canceled. That said, I have never heard of this happening.

[yankee99]

6 minutes ago, timendres said:

I clearly remember reading a specific clause of some requirements that a foreign company must show at least 500,000 THB profit per year. My accountant confirmed that this was true. Unfortunately, I cannot remember where I saw it. That said, neither immigration, nor the labor department, will be the ones checking that. If the requirement were ever applied, it would involve dissolving the business, after which work permits would become invalid, and extensions would be canceled. That said, I have never heard of this happening.

Why would they dissolve the business? Business tax returns and financial statements are part of the wp yearly renewal process submitted to the labor department. 

[timendres]

2 minutes ago, yankee99 said:

Why would they dissolve the business? Business tax returns and financial statements are part of the wp yearly renewal process submitted to the labor department. 

Who do you mean by "they"? Of course, the WP submission includes tax and financial documents. But the labor department would not be involved in the decision to dissolve a business.

[yankee99]

4 minutes ago, yankee99 said:

it would involve dissolving the business

I dont know who they are im not the one that wrote it. 

[tomazbodner]

15-20 years ago I remember there was a requirement to apply for new work permit that the company had to make a profit of at least 1 million THB in the past year... It wasn't anything about extension, just new work permit. No idea if that's still there... And I don't remember the details. But my friend got tripped on it and work permit application rejected. Was circa 2004-2005.

[SCOTT FITZGERSLD]

INTERESTIN. i never heard about it.

That is a very strange and draconian requirement that might

scare new investors.

[ThomasThBKK]

This would kill many startups, it's totally normal for companies not to be immediately profitable and i can't see how that has anything to do with the work permits. 

 

 

Even in this fantasy land that should hold true...

[jessc]

OP - Perhaps you're referring to the capital requirement? A business has to have 2 million in paid-up capital to sponsor a work permit (2m per work permit if you have more than one work permit). There is no requirement to turn a profit to be eligible to sponsor a work permit.

[Jake72]

Never had any issues with lack of income as long as salaries etc were paid, but I did get screwed by an incompetent law firm (very popular one) who "forgot" to move our business address when we moved from their serviced offices to out actual real office address, causing an inspection to fail and the Thai authorities shutting down our company, despite us paying the law firm 20k month to do accounting etc. 

 

[Prince77]

On 10/11/2020 at 8:43 AM, ubonjoe said:

There is nothing in the immigration order that states a company must make a profit to apply for extensions based upon working.

As long as they are paying your salary, paying taxes for it and proof of social security payments being made I would think it would not be an issue.

 

It is not about "a loss" in a specific business year but about the equity of assets and liabilities. If liabilities are higher than the assets you might get 7 days to leave the country and not get any extension of stay.

 

However, I am not sure whether this is "by law" or in the discretion of the Immigration officer.

[ThomasThBKK]

13 minutes ago, Prince77 said:

 

It is not about "a loss" in a specific business year but about the equity of assets and liabilities. If liabilities are higher than the assets you might get 7 days to leave the country and not get any extension of stay.

 

However, I am not sure whether this is "by law" or in the discretion of the Immigration officer.

 

This does not make any sense, any business with debt has these things...

 

Build a hotel for example, u prolly will get a bank loan to do that - and now u have more liabilities than assets. 

That's totally normal, and not an issue. Certainly not by law - must be a scam.

 

 

 

Edited October 12, 2020 by ThomasThBKK

[ericthai]

When we opened our company in 2005 the first 2 years there was no profit as we were working out processes, getting raw material supplies established etc.  The 1st year no issue, the second year we did have an audit and then we also had another audit  preformed on our 3rd year as not much revenue was made that year. After, that no issues.  

[ericthai]

59 minutes ago, Prince77 said:

 

It is not about "a loss" in a specific business year but about the equity of assets and liabilities. If liabilities are higher than the assets you might get 7 days to leave the country and not get any extension of stay.

 

However, I am not sure whether this is "by law" or in the discretion of the Immigration officer.

Where you getting this information?? Never had any issues and never heard anything like this

[Prince77]

On 10/12/2020 at 5:16 PM, ericthai said:

Where you getting this information?? Never had any issues and never heard anything like this

Well it happened to me. It was about 2006, shortly after Military took over - my extension was denied based on in balance between assets and liabilities which was the 2nd. time in a row.

 

It was a 100% foreign ownership - I left for Malaysia and returned with a non B single entry.

 

However, since a few years I get my extension in CW with no problems in relation to my balance sheets. whatsoever. 

 

As said in my original post - I do not know if this was by law or by discretion of the officer.

[ericthai]

23 hours ago, Prince77 said:

Well it happened to me. It was about 2006, shortly after Military took over - my extension was denied based on in balance between assets and liabilities which was the 2nd. time in a row.

 

It was a 100% foreign ownership - I left for Malaysia and returned with a non B single entry.

 

However, since a few years I get my extension in CW with no problems in relation to my balance sheets. whatsoever. 

 

As said in my original post - I do not know if this was by law or by discretion of the officer.

It's sad this happens, but typical for Thailand, each office makes their owns rules.