New Work Permit Regulations

[Sunbelt Asia]

New Work Permit rules have just been released. Any work permit submitted after October 8th 2004 must follow these regulations.

Here is the Reader Digest version.

A company who has a director seeking employment or an foreign employee to be hired, now must have 2 million Baht registered paid up capital per work permit. (This is different from before which only required foreign directors to have 2 million Baht registered capital)

If however your employer was registered in another country and was doing business in Thailand before October 30th 2002, they are required to show a bank account of 3 million Baht or show evidence that the employer transferred money from overseas in the last 6 months. Only one expat per 3 million in the bank account.

If the employee is legally married, than they only need 50% of the capital required.

If the employer can meet one of the following conditions, the employee can be exempt on the registered requirement however the corporation cannot have more than 10 work permits.

1) Hired by an employer who paid not less than 3 million in tax last calendar year

2) hired by a employer in the export business, which had export revenue of not less than 30 million last year

3) hired by a employer in the travel business, which had not brought less than 5,000 tourist to Thailand in the past year

4) hired by an employer who has not less than 100 Thai employees employed

Exemptions for the following as well

Any alien that has the work permit must transfer his knowledge about technology to two Thais within the period the Thai government has set up. The expat must be an expert in a specific project.

The alien who is hired to perform as an entertainer.

Expats working for non-profit foundations.

The representative of the company, that has headquarters overseas, that are important for releasing news about their brand, can only have a total of two expats employed.

The representative of the company, that has headquarters overseas, employed to inspect for quality control, only 5 expats can be employed. Exemption if the employer had bought not less than 100 million Baht from Thai suppliers the last calendar year than its possible to get more than 5 work permits.

Complete translation word by word tomorrow.

www.sunbeltasia.com

[danone]

no more special conditions for journalists obviously ...

tks for the post - highly interesting.

sunbelt - what you make of it?

another cut of farangs in LOS in the making?

[Sunbelt Asia]

I’m afraid its not good news.

It’s much stricter! I'm afraid this may hurt a number of small businesses. The key will be the supporting documents required for the paid up capital. If they require a bank account of 2 million cash per work permit, it could drive a number of foreigners underground.

If they let expats before October 8th be “grandfathered” in on extensions of their work permit, then it won't be a large mass exodus at first either.

By the way, the killer is the personal tax of 18,000 Baht per year, it’s no longer a condition that an expat can apply for his WP. That really hurts the little guy. They could pay that tax but coming up with 2 million cash? For some, it will be simply be out of reach.

www.sunbeltasia.com

[married2surin]

Sunbelt, so if your married to a Thai then 1 mil capital ? and does that 1 mil need to be kept in an account or can that be used in the day to day running of the company ? and then what happens on the renewal of the WP ? do you just show that the money was paid in before ? or does it need to be paid in again ?

Cheers

[madmitch]

If the money (THB2m) is brought in from overseas and is shown as such but is then subsequently used for the purchase of a business in the company name does this count as paid up capital for work permit purposes?

[dazdaz]

>Any alien that has the work permit must transfer his knowledge about technology to >two Thais within the period the Thai government has set up. The expat must be an >expert in a specific project.

What is the legal definition of transferral of knowledge ?

Invest in China, not Thailand, the message is becoming very clear because if a country can change laws so flippantly as they appear to do, then this does'nt inspire investor confidence.

Thailand = not a serious country for business, but very good for holidays

China = good for business

I realise this message forum is pushed to sell Thailand, but it's becoming less attractive of a place. Why don't we have a forum for other Asian countries.

Have a nice day.

[mango]

If the money (THB2m) is brought in from overseas and is shown as such but is then subsequently used for the purchase of a business in the company name does this count as paid up capital for work permit purposes?

This is exactly my query also.

[sprq]

no more special conditions for journalists obviously ...

tks for the post - highly interesting.

sunbelt - what you make of it?

another cut of farangs in LOS in the making?

I think journalists' conditions have simply been omitted from this information. It's hardly comprehensive.

[Foggy Bottom]

If the money (THB2m) is brought in from overseas and is shown as such but is then subsequently used for the purchase of a business in the company name does this count as paid up capital for work permit purposes?

Paid up capital = the value of shares that have been paid for and the money deposited into the share-issuing company's bank

As opposed to authorised capital which are shares that are available for sale but have not been paid for.

Once the company has it's money (for the shares) it can use the money anyway it wants

BUT if the money is simply put into the company and shares are NOT issued, then it is NOT paid up capital, it is normally registered as a loan to the company and ineligible for consideration under these rules - one more reason to do it by the book.

[falong]

>Any alien that has the work permit must transfer his knowledge about technology to >two Thais within the period the Thai government has set up. The expat must be an >expert in a specific project.

What is the legal definition of transferral of knowledge ?

Invest in China, not Thailand, the message is becoming very clear because if a country can change laws so flippantly as they appear to do, then this does'nt inspire investor confidence.

Thailand = not a serious country for business, but very good for holidays

China = good for business

I realise this message forum is pushed to sell Thailand, but it's becoming less attractive of a place. Why don't we have a forum for other Asian countries.

Have a nice day.

I've been doing this transfer of knowledge thing for years now. every 2 years I have to get 2 thais to sign this form saying that they are being trained. Can pick anyone who is willing to sign.

These new laws do not really effect the expats working at the big multinationals??

[Marmite the Dog]

The alien who is hired to perform as an entertainer.

Phew, teachers are OK then.

[crystaldive]

So I take it the deal with just popping down the town hall with your Thai partner, signing a few forms and applying for your work permit is now out of the window..??

Is the 51%-49% limited partnership package now obsolete...?

[mango]

If the money (THB2m) is brought in from overseas and is shown as such but is then subsequently used for the purchase of a business in the company name does this count as paid up capital for work permit purposes?

Paid up capital = the value of shares that have been paid for and the money deposited into the share-issuing company's bank

As opposed to authorised capital which are shares that are available for sale but have not been paid for.

Once the company has it's money (for the shares) it can use the money anyway it wants

BUT if the money is simply put into the company and shares are NOT issued, then it is NOT paid up capital, it is normally registered as a loan to the company and ineligible for consideration under these rules - one more reason to do it by the book.

OK could you please explain this to me.

If you start up a business in Thailand and all in toll this costs you B4m, Lease, equipment, renovation of building etc and you have all the paper work to show that you have invested B4m to get this company going, you then eploy 5 or 6 Thai people to work at this company. HOWEVER you now dont have much cash floating around and only have enough for say 3 - 6 months to get by on until hopefully the bussines starts to pay.

What situation does this leave you in?

Thanks for any seriouse replies.

Cheers Mango...

[MaiChai]

With these kind of restrictions, Thailand is not going to encourage a high tech business environment as the Malaysians and Singaporeans have fostered. For example if you run an IT consulting business, and can only employ lowly skilled locals, then you base your business elsewhere where the terms are more flexible, and bring in people for short term projects to work in Thailand. These policies equate to only encouraging large companies to manufacture in Thailand to use the local low cost labour; these types of companies move around depending which country is the cheapest to manufacture. I should say quite a few companies are relocating manufacturing from Thailand to China at this present time, as China is a much less risky place to manufacture than it used to be.

[p1p]

Depends entirely on the whim of the immigration official at the time.

[bcsscott]

So I take it the deal with just popping down the town hall with your Thai partner, signing a few forms and applying for your work permit is now out of the window..??

Is the 51%-49% limited partnership package now obsolete...?

Here we go with moving the goal posts further and further back some more! This is not a surprise as I just went through 3 lawyers, both Thai and foreigners for a loop hole around the 2 Million Baht capital issue to support a work permit. There is no way around it any longer. In the next couple of months you could try and get the company registered at 2 Mill, but within the next year it will have to paid up capital and who’s ever name this company is registered to doesn’t come up the capital in time they are in deep doo doo.

I am not a lawyer, but I have heard there can be many types of capital including assets etc., so there may be a way to register capital in other ways, however I am not sure.

The comments about the small guy is correct. Your screwed unless you have some major capital available these days. In the past at least you could try and beg and borrow from someone willing to give you a loan for a day or two, but now I am hearing they are not even considering this very soon.

It has also been in the Thai TV news recently that the government is now forming, or has formed already a task force to specifically investigate all foreigners working in Thailand. I don't know the exact details, but my Thai lawyer informed me that this new task force will be investigating all foreigners working in Thailand without work permits.

[aqua4]

So,

If I understand this correctly:

No more work permits if you cannot show the 1 million Baht in cash.

We run a business, if it had that type of excess cash, I would have moved on but it does not have that. Its a business not a bank. So this tells me - back to square one. Get a "B" Visa, which they will not give, cause you dont have 1 million to show for the WP. Which means I must now get an "O" visa and show 400,000 Baht, but brought from abroad.

So where am I now? Is this going to make me a border walker?

[capt_canada42]

Hello people SunBelt is making money off making you all worry, this is how they do things I sent an earlier e-mail an hour ago and I see they didn't put it on.

Wake up people there are people out profiting from your worries.

I said in the earlier e-mail for years here we all helped each other; it used to be one for all, all for one!

These days it is not so there are so many of us here that we don't help each other like we did years ago. So we have the information merchants. Some of them are good but many are preying off your paranoia.

[Sunbelt Asia]

Sunbelt, so if your married to a Thai then 1 mil capital ?

Yes

and does that 1 mil need to be kept in an account or can that be used in the day to day running of the company ?

Used for the day to day running

and then what happens on the renewal of the WP ? do you just show that the money was paid in before ? or does it need to be paid in again ?

My interpretation is it only has to be paid up once. That is paid up capital means that the shareholders paid for the shares 100%. The shareholders don't have to pay for the shares again and again. In fact once the shares are paid for, the corporation can make a loan back to the shareholder or director. The borrower simply has to pay the interest on the loan.

So I take it the deal with just popping down the town hall with your Thai partner, signing a few forms and applying for your work permit is now out of the window..??

As long as you have registered paid up capital of 2 million then you are ok. The jury is still out if this has to be cash, combination of assets transferred to the corp and 25% cash or simply just has to be registered 2 million. Days ahead will tell how the officers will interpret these rules.

s the 51%-49% limited partnership package now obsolete...?

no

If you start up a business in Thailand and all in toll this costs you B4m, Lease, equipment, renovation of building etc and you have all the paper work to show that you have invested B4m to get this company going, you then eploy 5 or 6 Thai people to work at this company. HOWEVER you now dont have much cash floating around and only have enough for say 3 - 6 months to get by on until hopefully the bussines starts to pay.

The 4 million can be used towards the business expenses. The only rule that states any working capital is needed is not for the work permit but for an extension of stay visa based on business. The condition is 2 million paid up capital with one million working capital left.

Hello people SunBelt is making money off making you all worry, this is how they do things I sent an earlier e-mail an hour ago and I see they didn't put it on.

This is quite strange. How in the World can we profit from this? The rules are changed and as Forum Sponsor were not suppose to let people know? Chants of " Kill the messenger!"

I really like to know how we make money from this news? Less people are going to get a work permit NOT more! Less people will buy a business not more!

As it is, we may have lost an account for 270 expat work permits and Thailand in turn may lose out on 1,500 new jobs created. This morning it was all systems go with unlimited work permits for a UK firm. When our legal staff and I meet the MD tomorrow, I have to give them the bad news were now looking at registered capital of USD14 million. The only saving grace is they already signed a contract with the Thai government last week and ships are on their way now. Their comment already before this happen, how much easier it was to get work permits in China and Singapore for their staff, with them getting a WP on a tourist entry. So really I like to know Sunbelt could ever make more money on this news? Make it scary that it’s tougher to get a work permit so now its time to get one? Gee Golly Molly!

www.sunbeltasia.com

[aqua4]

Hello people SunBelt is making money off making you all worry, this is how they do things I sent an earlier e-mail an hour ago and I see they didn't put it on.

Wake up people there are people out profiting from your worries.

I said in the earlier e-mail for years here we all helped each other; it used to be one for all, all for one!

These days it is not so there are so many of us here that we don't help each other like we did years ago. So we have the information merchants. Some of them are good but many are preying off your paranoia.

That does not make sense.

If Sunbelt is making us paranoid then how is he going to sell businesses? I thought it was good that he let us have some information be it that it makes his sales pitch for buying a business now more difficult.

[mango]

Well from what i have seen of Greggs posts in the past they have all been good information which he did not always have to go out of his way to tell. Anyway i would rather have proffesionals advise me than some old asian hand that thinks they know but dont, so cheers Gregg keep up the good work.

Cheers Mango

[bcsscott]

So,

If I understand this correctly:

No more work permits if you cannot show the 1 million Baht in cash.

We run a business, if it had that type of excess cash, I would have moved on but it does not have that. Its a business not a bank. So this tells me - back to square one. Get a "B" Visa, which they will not give, cause you dont have 1 million to show for the WP. Which means I must now get an "O" visa and show 400,000 Baht, but brought from abroad.

So where am I now?  Is this going to make me a border walker?

From what I understand, but don't hold me to this without consulting your lawyer, is if you have paid Thai taxes the last 3 years, are married to a Thai and you have, or maybe even show the 400K statement, you can possibly apply for the permanent residency, or at least get a one year "O". There is a minimum per month income related to this as well.

That maybe taking care of your visa issue you could work on the WP options.

We are getting into an area that most of the other people in this forum know a lot more about this than I do, but I just had to go through the whole starting a small company with very little money deal, which was fun...and killing my current WP and starting a new one. I didn't find any wave of the wand solution for the WP.

The bottom line that I found was the company must have 2 Mill capital, must be Co. Ltd., have seven share holders and at least four Thai employees for each foreign WP, keeping in mind you have to pay the minimum tax per month for your nationality.

I do know for sure that if you or a company has held a work permit for you for the last 3 years and you have paid taxes then you have some options as I did.

If you’re married to a Thai and have kids then you can get some tax breaks on this as well.

My best advice would be to talk to your lawyer as they know the facts. I was lead down so many roads and told so many things, I wasn't sure where to begin.

Good Luck

ATB

[Sunbelt Asia]

Thank you very much Mango and Augua4 for the nice comments. Much appreciated that you shared your feelings. I for one, thank you again.

www.sunbeltasia.com

[laohuli]

Well from what i have seen of Greggs posts in the past they have all been good information which he did not always have to go out of his way to tell. Anyway i would rather have proffesionals advise me than some old asian hand that thinks they know but dont, so cheers Gregg keep up the good work.

Cheers Mango

I concurr. I have dealt with Greg and his company for many years and always found his advice to be straight forward and honest. So those that have the smarts to 'listen up' will do so. The rest can go pay some 'consultant' and hope their advice is as sound as that from SunbeltAsia.

[Dakhar]

The welcome mat at the door of Thailand is getting very small.

I truthfully can afford anything they have to throw at me as far as an entrance criteria is concerned. I can afford it, because I don't live there right now!

What I fear is going over there, under standard "x" establish my life there, and then get told get the "h3ll out of our country" because you do not meet the standar "Y" in the future.

If Thailand does not want my American dollars there, just tell me. If they don't want me there, just tell me. If they want my American Dollars... Well those travel with me... you don't get one without the other.

If Thailand charged a Flat fee of lets say, 50-75K USD to give me permanent residency without citinzenship, I'd be fine with that... But the games they coninue to play is really anoying.

[noBuzz]

Dakhar.

I agree.

We're living in a modern world.

It's just hasn't arrived in Thailand yet.

But I wouldn't pay any 50-75k US för a perm residency.

Cuz there's no such thing as a perm residency. The last try for a coup d'etat

was only 10 yrs back. And it might just be a year or two away.

You never know.

My best advice would be to borrow as much as you can from local banks,

instead of paying cash, when you buy property or invest here.

Bring the pennies but keep the bigger bucks abroad.

When the country has a solid democratic foundation and has implemented

indiscriminate laws widely accepted by an informed general public i might

consider taking care of my debts. Until then it's just a spot in the sun where

i sit until further notice.

And if the changes are anywhere near Gregs interpretation we have nothing to

worry about. Working capital is just that - working capital. And i think my capital

will be working back in Sweden.

NoBuzz

[amarka]

hi...

The way I see it - Thailand is struggling with the logic of what they are trying to implement...

and that seems to be to get rid of the countless numbers of useless foreigners clogging the streets - not to mention elsewhere

tourist visas are abused and abused again... and people are buying houses and calling it a business! or it is at least it is registered as one!

every day we hear of more new foreign related scandals in thailand " German infecting hundreds with HIV " and so on!

and thailand seems to be powerless to stop these "criminals" from staying in their own country...

hardly surprising they make political mistakes and take it out on the general foreign community...

Thailand is getting tougher because the foreigners are not listening - and who can blame them ?

if business's are so small that they have no cash flow to cover visas, then perhaps these are the businesses that local Thais should be running anyway - unless expert foreign knowledge is required and passed on, in which case you get your visa?

I sympathize with the Thai government in what they are trying to do, but don't believe that that they have got it right yet.

amarka

[eyespan]

My Singaporean chinese friend has been doing border runs for years and he says rules come and go, its not so difficult to stay in LOS.

Yet for the rest of us who are following the rules or at least trying to make an honest living here, I ask just what is the gov trying to prove? I have nothing against a government being selective about the people they let in but looking at the way rules are changing it seems like the whole world is lining up outside Thailands door waiting to put their money in?

Just when will the gov here realize that when it becomes safer and cheaper to manufacture somewhere else, everybody moves there.

I just bought a small factory space in Shenzhen China. Only 30 years lease but at least it is in my name, a foreign devil.

I like LOS more and am loathed to move but I ask again, what are they trying to prove?

[noBuzz]

Amarka

If farangs could buy houses in their own names instead of calling it a business, then i think the would do just that.

Don't you?

[eyespan]

If farangs could buy houses in their own names instead of calling it a business, then i think the would do just that.

Definitely, but that would be too much to ask for now.

I wish Thailand all the best in solving their problems too Amarka but I do not believe that we, the small-time foreign business people warrant so much unreasonable attention.

What...... Do you think that the average wage earning Thai would ever save 3 mil in their entire lifetime? The store supervisor I employ earns 8,000 a month because she is related to my girlfriend. That means she will have 2,724,000 in 30 years, and that is asumming she does not eat, does not pay for rent and never ever falls in love with anybody that runs away with all her money!