New Department Of Employment Regulations

[Sunbelt Asia]

Royal Emblem

Department of Employment Regulations

Governing the Criteria of Considering Permitting the Work of Foreigners A.D. 2004

In order for the consideration of permitting the work of foreigners under Section 7and Section 8 of the Work of Foreigners Act A.D. 1978 to be exactly circumspect according to the spirit of the law, it is expedient to prescribe the criterion of considering permitting the work of foreigners.

By virtue of Section 32 of the State Affairs administration Regulations Act A.D. 1991 as amended by the State Affairs Administration Regulations Act (No. 5) A. D. 2001, the Director-General of Employment lays down regulations as follows:

Article 1. The regulations are called “The Department of Employment Regulations Governing the criteria of considering Permitting the Work of foreigners A.D. 2004”.

Article 2. These regulations shall apply form the 8th day of October A.D. 2004 onward.

Article 3. The following shall be rescinded:

(1) The Department of employment Regulations Governing the Criteria and the Conditions of Considering Permitting the Work of Foreigners A.D. 2002 dated May 22, 2002,

(2) The Department of Employment Regulations governing the Criteria and the Conditions of considering Permitting the Work of Foreigners (No.2) A.D. 2002 dated July 11, 2002,

(3) The Department of Employment Regulations Governing the Criteria and the Conditions of Considering Permitting the Work of Foreigners (No.3) A.D. 2003 dated February 5, 2003.

Clause 4. For the issuance of the work permit to the foreigners under Section 7 and Section 8, permission shall be considered as may be necessary and appropriate by taking account of:

(1) Security within the kingdom in the political, religious, economic and social aspects,

(2) Protection against foreigners coming to compete for the occupations that Thai nationals have the ability to do and keeping them sufficient in quantify for the demand of the labor market within the kingdom;

(3) The benefit from permitting the foreigners to work in that job position of bringing about the introduction of foreign currency to invest or spend in the country in large amounts, bringing about the employment of a large number of Thai nationals for the position being one requiring skill in modern technology useful to the economic development of the country and with such skill being transferred to Thai nationals.

(4) Skill development that Thai nationals will receive from the transfer by the foreigners who is permitted to work of knowledge and understanding of techniques and details about machines and tools and skill in modern technology to Thai nationals in that work;

(5) The principle of humanity.

Article 5. From the consideration of issuing the work permit under Article 4, permission may be granted according to the following criteria:

(1) For foreigners entering to work in financial institutions under the supervision of the Bank of Thailand or the Ministry of Finance or the government agency which supervises financial institutions, permission shall be granted according to the number prescribed in the certificate having a certificate from Bank of Thailand or the Ministry of Finance or the government agency writ supervise finance in situations.

(2) Foreigners under a certificate issued by the central government, the provincial government, the local government, the state enterprise or the public organization under the public organization law which specifies the name, the position and the work period of that alien.

(3) Foreigners working for an employer whose investment size from the paid up registered capital is not lower than Baht two million, the rate being one alien permitted for every Baht two million, or an employer registered as a juristic person abroad and entering to do business in Thailand whose investment size from the money introduced from abroad is not lower than Baht three million, the rate being one alien permitted for every Baht three million, or a place of business registered as a juristic person abroad and entering to do business in Thailand prior to October 30, 2002 that has no evidence of introducing money from abroad: consideration shall be done from the size of investment from the amount of the balance appearing in 6 retrospective months’ bank statement, an amount of Baht three million or more, the rate being one foreigners permitted for every Baht three million, unless the alien has a Thai spouse in a lawfully registered marriage and in open cohabitation, in which case such investment size as prescribed shall be reduced by one half, in which a maximum of ten foreigners may be permitted, save considering permitting as may be appropriate in any of the following cases:

(a) Working for an employer who has paid tax to the government in the past year cycle not less than Baht three million;

(B Working for an employer doing a business of exporting goods and introducing foreign currency into the country not less than Baht three million in the past year;

(-C) Working for an employer doing a tour business with not fewer than five thousand introductions of foreigners to visit Thailand in the past year cycle;

(d) Working for an employer who employs not fewer than one hundred Thai nationals;

(4) Foreigners working for an employer whose investment size from the paid up registered capital is not lower than Baht two million or an employer registered as a juristic person abroad and entering to do business in Thailand, whose investment size from the money introduced from abroad is not lower than Baht three million: in any of the following case the limitation regarding the number of foreigners under Article 5 (3) shall not apply:

(a) Foreigners doing a Technology work which Thai nationals are still unable to do or in which Thai nationals are available in number not sufficient for the demand of the domestic labor market, which technology shall be transferred to at least two Thai national within the prescribed period;

(B Foreigners working by applying specialized skill for a work to be accomplished under a definite project;

(-C) Foreigners working in an entertainment, amusement or musical business, the character of whose employment are occasional and definite;

(5) Foreigners working in a foundation, association or any other organization whose objectives are non-profit making and in the interests of the society as a whole: the criterion in Article 5 (3) shall not apply;

(6) Foreigners coming to be attached to the representative office of a foreign justice person in an international trade business, who comes to give advice in various aspects about the goods of the head office distributed to an agent or user, the dissemination of various sorts of information about the goods or services of the head office and the reporting of business movements in Thailand to the attention of the head office: a maximum of two person may be permitted; the alien coming in to look for goods or service purchase sources in Thailand for the head office, check and control the quality and the quantify of the goods that the head office buys or employees to produce in Thailand: a maximum of two persons may be permitted, unless that representative office can find goods or service purchase sources for the head office and the head office has ordered goods or services from producers in Thailand in a value of goods or service ordering in the past year not less than Baht one hundred million;

(7) Foreigners coming in to be attached to the regional office of a juristic person organized under the law of a foreign country and going to do business in another country in order to render services in various aspects, e.g. liaison and supervision of the operation of a subsidiary or affiliated company located in the same region as the head office, counseling or rendering the services of organizing transiting and personnel development, financial management, market control and sales promotion planning, product development, and research and development by coming an income from rendering those services and having no power to receive purchase orders or sale offers or negotiate business-doing with persons or juristic persons in the country of location, by receiving expenses from the head office only: a maximum of five persons may be permitted, unless than regional office has introduced money to spend in Thailand in the past year cycle not less than ten million baht.

Article 6. Regarding considering issuing the work permit under Article 4 to foreigners who apply for permission to work for a natural person employer who is not one having the character under Article 5, permission may be granted according to the following criteria:

(1) Foreigners working for an employer earning an income form business operation in the past year cycle or the amount year: one person may be permitted for every Baht seven hundred thousand, the maximum being three person;

(2) Foreigners working for an employer who has paid taxes to the government in the past year cycle: one person may be permitted for every Baht fifty thousand, the maximum being three person;

(3) Foreigners working for an employer having Thai employees: one person may be permitted for every four Thai employees, the maximum being three persons.

Article 7. The criterion under paragraph one shall be reduced by one half in the case where the permit applicant alien has a Thai spouse in a lawfully registered marriage and in open cohabitation.

Article 8. Considering permitting otherwise than the cases or criteria herein prescribed shall be the power of the Director-General.

Article 9. Applications that the authorities have receive prior to the effective date hereof shall be treated according to the Department of Employment Regulations Governing the Criteria and the Conditions of Considering Permitting the Work of Foreigners A.D. 2002 dated May 22, 2002, the Department of Employment Regulations Governing the Criteria and the Conditions of Considering Permitting the Work of Foreigners (No. 2) A.D. 2002 dated July 11, 2002, and the Department of Employment Regulations Governing the Criteria and the Conditions of Considering Permitting the Work of Foreigners (No. 3) A.D. 2003 dated February 5, 2003.

Article 10. The Director-General of Employment shall be the person in charge of the functions hereunder.

Given this 30th day of September A.D. 2004

-Signed-

(Mr. Chuthathawat Intharasuksi)

Director-General of Employment Department

www.sunbeltasia.com

[danone]

tks - great proper translation work. but still no mention of journalists and media-people ...

[Indo-Siam]

This is a high-level document that is entirely typical of such high-level documents. It is policy, not implementation instructions.

The dumbest thing anyone could possibly do is to go stick this in the face of the actual office that issues work permits.

That office has - I suspect for years - handed out a white page entitled simply "W.P.2.", that listed on the front:

"Qualifications of an application"

and

"Documents Required" (in case of to be employed by private company)"

The back side of that same page is the listing "One of the following items is required for a permit consideration"

and the VERY FIRST line reads:

"1. A copy of an update Bank statement of the company, which showing a current balance of more than 2 million baht."

Now - this is printed back-to-back -LITERALLY - with the list of "Documents Required" - and a bank statement is NOT on the list - and starting two meters from the stack of these white sheets on the table is a row of desks with work permit processing officials, AND THEY HAVE NEVER REQUIRED THE BANK STATEMENTS - EVER. They just wanted to see 2,000,000 baht registered capital.

So - they did not enforce their own requirements before - even though it was printed on a sheet that was probably generated in the same room (and was definitely distributed in that room).

There is therefore absolutely no reason in my mind to expect that some regulation signed up higher -and mandating a less strict rule (paid-in capital, versus CASH PRESENTLY IN BANK ACCOUNT) is going to make them enforce either rule.........

Unless some idiot makes a big deal out of this, and draws attention to this "new policy".

They have clearly had a stricter rule in place - CASH ON HAND - very clearly stated - and not enforced it. If they could take:

"Bank statement of the company, which showing a current balance of more than 2 million baht"

and in its place routinely accept tax and registration papers showing just 2,000,000 baht registered capital,

why would anyone expect them to not treat "paid up registered capital is not lower than Baht two million" the same way?

So - let's not go rocking boats. On behalf of terrified clients, I am going to Work Permit office myself tomorrow, to see what version of the white sheet is presently sitting on the table.

Absolute rule for terrified, frantic farangs: When asking questions, ask:

"Is anything new?" or "Are you going to be making any changes in application requirements?". Ask open-ended questions, that do not focus officials on a potential problem.

Do not - like an idiot - go and stick a newly published requirement in their face and ask "will you start requiring the criteria specifically signed by your Director General on 30 September, and requiring" paid up registered capital is not lower than Baht two million", starting on October 8th?"

This latter way is how idiot Thai lawyers ask questions - because the outcome is intangible to them.

I sent my work permit processing manager to ask the open-ended questions today at the work permit office - and she was told "no changes." So - until someone rocks the boat, or engenders such a frenzy of worry that people start focusing official attention on rules that are likely to not be implemented - as the stricter part of the previous rule was not implemented - then all should be OK.

I have three million baht paid in, and seven Thai employees, and I'm married to a Thai - so it is not my ox being gored.

So - let's see if the frenzy of worry can be contained before it becomes a self-fulfilling prophesy.

Cheers!

Steve

Indo-Siam

[Sunbelt Asia]

Documents Required" (in case of to be employed by private company)"

The back side of that same page is the listing "One of the following items is required for a permit consideration"

and the VERY FIRST line reads:

"1. A copy of an update Bank statement of the company, which showing a current balance of more than 2 million baht."

I agree Steve on spooking the Labor Dept. but one item I do feel you are missing is in your above quote. ONE OF THE FOLLOWING ITEMS IS REQUIRED...

It was not required to have 2 million paid up capital; it was in fact an option, if you chose to apply for your WP using that as the condition...fine. You had to show your bank balance of 2 million.

You simply could not do that, no problem, you had other conditions you could meet, as you only had to meet just 1 item not all of the criteria.

Now for the most people, it is no longer an option. They are stating it is a requirement to have this amount of paid up capital.

That is the difference.

[Tippaporn]

This is a high-level document that is entirely typical of such high-level documents. It is policy, not implementation instructions.

The dumbest thing anyone could possibly do is to go stick this in the face of the actual office that issues work permits.

That office has - I suspect for years - handed out a white page entitled simply "W.P.2.", that listed on the front:

"Qualifications of an application"

and

"Documents Required" (in case of to be employed by private company)"

The back side of that same page is the listing "One of the following items is required for a permit consideration"

and the VERY FIRST line reads:

"1. A copy of an update Bank statement of the company, which showing a current balance of more than 2 million baht."

Now - this is printed back-to-back -LITERALLY - with the list of "Documents Required" - and a bank statement is NOT on the list - and starting two meters from the stack of these white sheets on the table is a row of desks with work permit processing officials, AND THEY HAVE NEVER REQUIRED THE BANK STATEMENTS - EVER. They just wanted to see 2,000,000 baht registered capital.

So - they did not enforce their own requirements before - even though it was printed on a sheet that was probably generated in the same room (and was definitely distributed in that room).

There is therefore absolutely no reason in my mind to expect that some regulation signed up higher -and mandating a less strict rule (paid-in capital, versus CASH PRESENTLY IN BANK ACCOUNT) is going to make them enforce either rule.........

Unless some idiot makes a big deal out of this, and draws attention to this "new policy".

They have clearly had a stricter rule in place - CASH ON HAND - very clearly stated - and not enforced it. If they could take:

"Bank statement of the company, which showing a current balance of more than 2 million baht"

and in its place routinely accept tax and registration papers showing just 2,000,000 baht registered capital,

why would anyone expect them to not treat "paid up registered capital is not lower than Baht two million" the same way?

So - let's not go rocking boats. On behalf of terrified clients, I am going to Work Permit office myself tomorrow, to see what version of the white sheet is presently sitting on the table.

Absolute rule for terrified, frantic farangs: When asking questions, ask:

"Is anything new?" or "Are you going to be making any changes in application requirements?". Ask open-ended questions, that do not focus officials on a potential problem.

Do not - like an idiot - go and stick a newly published requirement in their face and ask "will you start requiring the criteria specifically signed by your Director General on 30 September, and requiring" paid up registered capital is not lower than Baht two million", starting on October 8th?"

This latter way is how idiot Thai lawyers ask questions - because the outcome is intangible to them.

I sent my work permit processing manager to ask the open-ended questions today at the work permit office - and she was told "no changes." So - until someone rocks the boat, or engenders such a frenzy of worry that people start focusing official attention on rules that are likely to not be implemented - as the stricter part of the previous rule was not implemented - then all should be OK.

So - let's see if the frenzy of worry can be contained before it becomes a self-fulfilling prophesy.

Cheers!

Steve

Indo-Siam

Indio-Siam,

Thanks for sharing that common sense approach . . . and amen! I whole-heartedly agree with you. While this new document certainly is a cause of concern it should not be overly reacted to. Jai yen yen.

[Indo-Siam]

Greg -

While it is true that the W.P.2 sheet listed five alternative criteria to qualify for a work permit, at least 16 out of the last 20 work permits we processed had no relation whatsoever to the other five criteria - their only qualifying criteria was 2,000,000 baht registered capital (and at least half of therm had not paid it in) - and IN NO CASE was any document required that even vaguely addressed the issue of paid in capital or actual cash in the bank. So - it was invisible to WP office even if an applicant did have paid-in capital or cash in the bank.

This situation was in sharp contrast to coresponding practice at Immigration - they had a similar requirement in relation to documenting paid in capital - but they DID demand a level of documentation (but - in relation to Class B extensions, even they never actually asked for current bank balance statements - they just wanted historical documentation of having at some point having paid in the capital).

I do not believe that we have ever processed even a single work permit that was for a company that actually had 2,000,000 baht cash on hand in the bank. But more than 90% of all work permits we have obtained were for individuals whose only qualification was 2,000,000 baht registered capital - and we were never asked to furnish anything except what was on the list of "Documents Required."

Inertia is a powerful force. I remember being taught in debate training: in case a debate turns out exactly tied - the status quo always wins. This is because it takes effort to overcome inertia.

The situation tomorrow will always tend to be like the situation today - unless someone exerts sufficient energy to instigate change.

In this case, what is in everyone's best interests is for inertia to prevail - as it has in relation to Immigration still allowing endless 30-day border turns, and in relation to Bangkok nightspots remaining open later than the mandated early closing times that were announced by a Cabinet Member in very public manner.

In light of these blatent recent examples of radical, newly announced policy being one way, and actual implementation being the same old tolerant way - what would suggest to a rational and observant man that some policy statement at political posturing level would affect "meat and potatos" implementation practices?

Maybe I've been here too long .....????? I just can't imagine working myself up to the point of jumping off a building in dismay, because some policy wonk signed some bureaucratic mumbo-jumbo policy statement.

The next thing I'm now expecting is that some attention-hungry farang journalist is going to jump all over this "story" in order to generate some sensational story ("sensation sells") - and that will probably help toward pushing this in the direction of becoming a self-fulfilling prophesy.

Let's see - Stickman will have this in Sunday's column - and the "stick in their eye" sensational journalism piece will hit the papers by about Wednesday of next week. Anybody want to take any bets against these predictions?

All you bootstrap guys - get ready to cry a river of tears - the jabbering is on its way toward causing some rain to fallon on your parade.

Cheers!

Steve

Indo-Siam

[sting01]

As usual I am glad to learn more about hystory, geography or maybe just about english language :

2) Protection against foreigners coming to compete for the occupations that Thai nations have the ability to do and keeping them sufficient in quantify for the demand of the labor market within the kingdom;

thai nations .... with an "s" at the end .... well I did not know it was still existing many thai nations in 2004 ... In the past yes, at least it was white and black thai in vietnam ....

Or maybe it's a mistke made by the translator .... if there is one, what not other ... Who is sure this translation is well made?

This is another sample how some people spread "erronate" information to reach some personnal goals ... increase business for exemple as last year with fear about the visa control ...

Regards

ROXAAAAAAAAAAAAAAAAAAAANe

[billd766]

As usual I am glad to learn more about hystory, geography or maybe just about english language :

2) Protection against foreigners coming to compete for the occupations that Thai nations have the ability to do and keeping them sufficient in quantify for the demand of the labor market within the kingdom;

thai nations .... with an "s" at the end .... well I did not know it was still existing many thai nations in 2004 ... In the past yes, at least it was white and black thai in vietnam ....

Or maybe it's a mistke made by the translator .... if there is one, what not other ... Who is sure this translation is well made?

This is another sample how some people spread "erronate" information to reach some personnal goals ... increase business for exemple as last year with fear about the visa control ...

Regards

ROXAAAAAAAAAAAAAAAAAAAANe

This is not something that I normally would comment on but stick01 you made a comment about thai nations with the "s" and just prior to that you spelt history incorrectly with a "y" instead of an "i".

I have absolutely no connection with Indo Siam at all but if it was a literal translation then it was possibly an error in the original.

I cannot read or write Thai though I try to learn, but if you are not sure that there are other mistakes or not, I suggest that you apply for a copy of the original and either translate it yourself or have it done at one place and checked at a different translation office.

[ToeCutter]

I'm all for the "transfer of knowledge" bit. I reckon that's quite a smart idea. I was kind of planning on doing some voluntary teaching work anyway...

[Sunbelt Asia]

While it is true that the W.P.2 sheet listed five alternative criteria to qualify for a work permit, at least 16 out of the last 20 work permits we processed had no relation whatsoever to the other five criteria - their only qualifying criteria was 2,000,000 baht registered capital (and at least half of therm had not paid it in) - and IN NO CASE was any document required that even vaguely addressed the issue of paid in capital or actual cash in the bank. So - it was invisible to WP office even if an applicant did have paid-in capital or cash in the bank.

I totally agree with you on this point. I don't disagree one bit with you. No evidence would have needed to be furnished for 2 million paid up capital unless you wanted them to look at you meeting that criterion. However....

They all had an employment contract signed by the MD, correct?

and we were never asked to furnish anything except what was on the list of "Documents Required."

Employment contract was one of the "Documents Required" so the answer would have to be "Yes" on the MD signing.

What was the salary listed on the contract? It was higher than 30,000 Baht per month, correct?

What I'm getting at, is the odds are high, they qualified under this condition

Pay at least 18,000 baht in personal income tax in the past year.

Foreigners who have not worked here before must produce documents from potential employers confirming they will be paid at least 30,000 baht if they are single and 45,000 baht each if they are married.

That’s why no proof was needed for paid in capital of 2 million Baht. Cause you didn't apply under that condition of" 2 million paid up capital" or even registered capital of 2 million for that matter, if they were just a employee (and not a director.)

The Labor Department could of cared less on capital before, unless if the employee was a director. You then as a director would have that condition of 2 million Baht registered capital. It was a condition that had to be met not optional like the employee conditions. Now the wording does not say director, it is for ALL foreign employees and now it also says "paid up". For employees it went from a condition that could be met to THE CONDITION.

This foreign director condition was totally separate from meeting 1 of the 5 employee conditions on the rules before… (2 million paid up capital; Corporate taxes, exports, employing 50 Thais and paying 18K in taxes on a personal level ) You had to meet one of these five conditions or supplement conditions to get the WP. My money says it was the employment contract which stated the minimum salary.

Now the new rules simply has THE CONDITION...

Foreigners working for an employer whose investment size from the paid up registered capital is not lower than Baht two million, the rate being one alien permitted for every Baht two million

Example: Unless you are exempt, if you have 5 foreign employees, at the minimum, its 10 million Baht registered capital required now. That is the change. Today the Labor Department was not asking to see the capital via a bankbook. That is the good news for small companies.

www.sunbeltasia.com

[Jeff1]

Thank you for that Greg ,

Could you please tell me what that mean's in english .

It started to get all blurry after awhile .

Jeff

[Sunbelt Asia]

Thank you for that Greg ,

Could you please tell me what that mean's in english .

It started to get all blurry after awhile .

LOl. I know how you feel.

The main item is you still can get unlimited work permits but now you need to have paid up registered capital of 2 million Baht for each WP. Right now, the Labor department is looking at capital per WP. As of today, they are not concerned at "Paid up" by looking at your bankbook.

However, even our company is affected. We have to go from capital of 4 million Baht to 10 million. With it will come higher corporate tax as we no longer qualify as a SME firm.

Increase in capital registration will be government fees of increase capital of 33,600 Baht and corporate tax of 200,000 Baht more this year. It’s either that or lay off three expats. Our expense just went up around 4,000 Baht per month for every expat and none of us will see the increase. But I still love Thailand!

www.sunbeltasia.com

[Indo-Siam]

OK, late this evening, my erstwhile staff brought me the results of their investigation.

Basically - forget about the higher-level documents such as this "new" announcement of policy.

What drives the actual processing of work permits are the procedures - and I have in front of me two of the Labor Office procedures packets - the one called Procedure Tor Thor 5 (for renewing work permit) and the one for Procedure Tor Thor 2 (for applying for initial work permit). There are - by the way - a total of 12 different procedures. Issuing the blue work permit book itself is procedure Tor Thor 4.

When translated into English, they evidently substitute "W.P." for the "T" and "Th" characters.

At any rate, within the collection of forms required in the application packet for an initial work permit (Procedure W.P.2) is a bilingual form whose English title is "Form of The Employment Certification." It has roughly 20 rows of entries that must be inserted. The 13th row includes a block whose English text reads (sic) "Regristation Paid Capital".

At the bottom of form, below signature block, is a (sic) "Note: A person sign this form must be a business owner of apointee."

This is the form that has alsways been required. It has no place to enter registered capital. It has just the place to enter "Regristation paid capital," alongside the entry for (date) "regristation of commerce on".

So - this form is evidently checked against the first page of the company registration record (the page that lists company name, directors, address - and registered capital). That is it as far as confirming status of capital for procedure W.P. 2. That's the way it has been, and - evidently - that is the way it will continue to be.

My staff say that they have always filled out this form to match the company registration record - because that is the consitsency point that the processing officials match up.

Every client we have had (and they have all been directors) has evidently signed this form - and my staff say it is not their business to inquire about where and how capital has been paid in - if client signs the form, and its entries match the company registration printout - that is all that is needed for work permit processing.

I have no doubt in my mind that many of my clients have signed this form without actually having paid in the capital - and - Greg - my staff says that every client your company has ever processed for work permit must have also signed such a form in a way that says that paid in capital equals registered capital (regardless of the reality) - because if the number on this "paid-in" line was anything other than the number on the registration printout, the application would be "bounced" - because this was (and still is) a mandatory checklist matching item.

So - this one entry on this one form ALWAYS satisfied the "bank statement showing 2,000,000 baht cash" criteria - and it will presumably also satisfy the "2,000,000 baht paid in capital" criteria.

So - effectively no change in procedure - the same form is being used, and the same checklist matching process will continue.

So - the real question is: how do directors facing this form feel about falsifying this entry? Every director has always had to sign this form - showing paid-in capital as matching comapny's registered capital - and will continue to need to do so. THIS IS NOT NEW. There has been, and is now, no option to enter a number other than registered capital in the "paid in" block - and still be approved for a work permit.

I am sure that many directors have signed this form without realizing that they were signing a false statement - the English type size on this form is literally about 3 point size, and any knowledgeable form preparer who wanted it accepted at work permit office - no matter what business services office they worked for - would always have prepared the form so that this entry matched the check document - the registration printout.

So - everyone can probably go back to sleep. The work permit processing procedures have not changed - and there is no evidence that they are likely to change. Only a policy guideline document has changed - not most actual processing procedures - at least thus far.

If you do not pay in 2,000,000 baht capital - you are going to have to sign a form falesly staing that you have paid it in - just as you always would have had to do so. NO CHANGE.

I will concede that there does appear to be evidence that companies with multiple foreigners do need to now have 2,000,000 baht REGISTERED capital per each foreigner - or the work permit office will not approve the permit. But - it appears to my company that the check on paid-in capital is going to be just this same obscure block on this same obscure form - and there will be no choice - this block will have to match the company registration printout. There is no indication that any other documentation will be required.

And this is not just our assumption - less than 15 hours ago, my processor sat with an official of work permit office going over a requirement for increase of registered capital for one of our clients - from 2,000,000 baht to 6,000,000 baht - to sponsor three work permits - and was SPECIFICALLY told that the only matching documentation requirement will be the company registration printout.

This was for three work permit renewals - Procedure 5 - which does not have the "Form of the Employment Certification" - so there will not be a need for this customer to sign a falsified form.

But - here is a learning point: For anyone who will need to increase registered capital to support work permit renewals for multiple foreigners - doing so requires two shareholders meetings, spaced several weeks apart (evidently 30 days apart - but I have not verified this exact point). So - you cannot do this in a short period - if the work permit office rejects a renewal application on the grounds of this point,then they make a record of this - and will not accept a changed registration that returns to them in a period of time that is shorter than what would have been required to properly increase registered capital. So - it is best to increase capital BEFORE you go in to renew a work permit - otherwise you can get jammed up on timing in relation to subsequently renewing an entry permit extension.

I'm now signing out of this discussion permanently - this is a non-event for the vast majority of my clients - and probably for most readers on this board.

What a waste of teeth-gnashing.

Cheers!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com

[yuyi]

Even our company is affected. We have to go from capital of 4 million Baht to 10 million. With it will come higher corporate tax as we no longer qualify as a SME firm.

Increase in capital registration will be government fees of increase capital of 33,600 Baht and corporate tax of 200,000 Baht more this year. It’s either that or lay off three expats. Our expense just went up around 4,000 Baht per month for every expat and none of us will see the increase. But I still love Thailand!

Greg, for the corporate tax isn't it irrelevant if the registred capital is paid in or not? Meaning the 200,000 Baht you would have to pay anyway? Same for the government fees of increase capital of 33,600 Baht, don't you have to pay them anyway, no matter if the new policy would require paid in capital and the old policy would not look for the capital being paid in?

What I undestand so far is that either Steve is right (what we probably all hope), and the handling of the procedure did not change, or the capital needs to be paid in. Being a new policy it might be that the procedures did not get changed yet, and might get changed in the near future. Or, once again, someone pockets the money for the new forms, and they continue to use the old procedure forever

[Doisaketmoobaan]

Steve Indio-Siam Excellent Job !!!

Keep up the good work and yes after reading all the threads and evaluating all input you are the man!

I am going back to sleep on this one.

Till Tommorrow, when it will be a new subject for discussion and uneccesary worries

TiT

[Sunbelt Asia]

So - the real question is: how do directors facing this form feel about falsifying this entry? Every director has always had to sign this form - showing paid-in capital as matching comapny's registered capital - and will continue to need to do so. THIS IS NOT NEW. There has been, and is now, no option to enter a number other than registered capital in the "paid in" block - and still be approved for a work permit.

Paid up capital has always been in the past been easy( unless of course, you applied before, under the work permit condition of having "2 million baht paid up capital". Then they wanted to see the bankbook).

For all corporations, paid in capital could be met this way....25% of the shares paid in cash within 90 days after the company was formed and the rest could be assets. No official appraisal was needed for the assets, so it is any value the shareholders wanted to put on the equipment or Tradenames, intellectual property they acquired and transferred into the corporation to pay for their shares. Easy enough! Don’t think any directors have to feel they are falsifying this form if their shareholders can pay for the shares this way.

The 64 million dollar question, several days ago. “What would they require for supporting docs on the paid up capital?” As of now, it’s not a bankbook for the 2 million baht per expat. Which is good news for the little guy!

Greg, for the corporate tax isn't it irrelevant if the registred capital is paid in or not?

Correct.

Meaning the 200,000 Baht you would have to pay anyway?

No, the tax is higher because over the 5 million Baht registered capital, you have flat tax of 30%. On a SME under 5 million baht registered capital, it’s a tax break with a sliding scale.

under 1 million net income ... 20%

2-3 million net income 25%

Over 3 million net income .. 30%

If you have a 6 million Baht registered corporation and the net profit is 3.5 million for the year, you pay 1,050,000 in tax. If the company has less than 5 million Baht registered capital, its 850,000 Baht tax. Difference of 200,000 Baht.

Same for the government fees of increase capital of 33,600 Baht, don't you have to pay them anyway, no matter if the new policy would require paid in capital and the old policy would not look for the capital being paid in?

The 33,600 Baht government fees is on the registration of increased capital going from 4 million to 10 million. Without the new regulation, no, we would not increase the registered capital. As we want to keep our expats, we will.

www.sunbeltasia.com

[Indo-Siam]

Greg's statement is correct:

under 1 million net income ... 20%

2-3 million net income 25%

Over 3 million net income .. 30%

But to clarify, the rate on income between 1 and 2 million baht is also 25%, so it is more conventionally stated:

under 1 million net income ... 20%

1-3 million net income 25%

Over 3 million net income .. 30%

At the request of someone who sent me a personal message, I will arrange translation of - and then post - the new steps/criteria for Procedure W.P. 2 - processing of an "Application for work permit under Section 7"

It is undated, but is clearly different from the old Engish W.P. 2 sheet, that I picked up in April 2004.

Cheers!

Steve

Indo-Siam

[Siam International Legal Group]

I can tell that that nothing has changed for us. We have always complied with the 2 million baht registered capital per work permit . We applied for a work permit yesterday and nothing has changed from one week ago or one month ago. Same same.

Alongkot

Siam International Legal Group

www.siam-legal.com

[email protected]

[sriracha john]

I'm all for the "transfer of knowledge" bit. I reckon that's quite a smart idea. I was kind of planning on doing some voluntary teaching work anyway...

Just make sure you have a work permit to do so prior to commencement.

[dr_Pat_Pong]

OK, late this evening, my erstwhile staff brought me the results of their investigation.

Basically - forget about the higher-level documents such as this "new" announcement of policy.

What drives the actual processing of work permits are the procedures - and I have in front of me two of the Labor Office procedures packets - the one called Procedure Tor Thor 5 (for renewing work permit) and the one for Procedure Tor Thor 2 (for applying for initial work permit). There are - by the way - a total of 12 different procedures. Issuing the blue work permit book itself is procedure Tor Thor 4.

When translated into English, they evidently substitute "W.P." for the "T" and "Th" characters.

At any rate, within the collection of forms required in the application packet for an initial work permit (Procedure W.P.2) is a bilingual form whose English title is "Form of The Employment Certification." It has roughly 20 rows of entries that must be inserted. The 13th row includes a block whose English text reads (sic) "Regristation Paid Capital".

At the bottom of form, below signature block, is a (sic) "Note: A person sign this form must be a business owner of apointee."

This is the form that has alsways been required. It has no place to enter registered capital. It has just the place to enter "Regristation paid capital," alongside the entry for (date) "regristation of commerce on".

So - this form is evidently checked against the first page of the company registration record (the page that lists company name, directors, address - and registered capital). That is it as far as confirming status of capital for procedure W.P. 2. That's the way it has been, and - evidently - that is the way it will continue to be.

My staff say that they have always filled out this form to match the company registration record - because that is the consitsency point that the processing officials match up.

Every client we have had (and they have all been directors) has evidently signed this form - and my staff say it is not their business to inquire about where and how capital has been paid in - if client signs the form, and its entries match the company registration printout - that is all that is needed for work permit processing.

I have no doubt in my mind that many of my clients have signed this form without actually having paid in the capital - and - Greg - my staff says that every client your company has ever processed for work permit must have also signed such a form in a way that says that paid in capital equals registered capital (regardless of the reality) - because if the number on this "paid-in" line was anything other than the number on the registration printout, the application would be "bounced" - because this was (and still is) a mandatory checklist matching item.

So - this one entry on this one form ALWAYS satisfied the "bank statement showing 2,000,000 baht cash" criteria - and it will presumably also satisfy the "2,000,000 baht paid in capital" criteria.

So - effectively no change in procedure - the same form is being used, and the same checklist matching process will continue.

So - the real question is: how do directors facing this form feel about falsifying this entry? Every director has always had to sign this form - showing paid-in capital as matching comapny's registered capital - and will continue to need to do so. THIS IS NOT NEW. There has been, and is now, no option to enter a number other than registered capital in the "paid in" block - and still be approved for a work permit.

I am sure that many directors have signed this form without realizing that they were signing a false statement - the English type size on this form is literally about 3 point size, and any knowledgeable form preparer who wanted it accepted at work permit office - no matter what business services office they worked for - would always have prepared the form so that this entry matched the check document - the registration printout.

So - everyone can probably go back to sleep. The work permit processing procedures have not changed - and there is no evidence that they are likely to change. Only a policy guideline document has changed - not most actual processing procedures - at least thus far.

If you do not pay in 2,000,000 baht capital - you are going to have to sign a form falesly staing that you have paid it in - just as you always would have had to do so. NO CHANGE.

I will concede that there does appear to be evidence that companies with multiple foreigners do need to now have 2,000,000 baht REGISTERED capital per each foreigner - or the work permit office will not approve the permit. But - it appears to my company that the check on paid-in capital is going to be just this same obscure block on this same obscure form - and there will be no choice - this block will have to match the company registration printout. There is no indication that any other documentation will be required.

And this is not just our assumption - less than 15 hours ago, my processor sat with an official of work permit office going over a requirement for increase of registered capital for one of our clients - from 2,000,000 baht to 6,000,000 baht - to sponsor three work permits - and was SPECIFICALLY told that the only matching documentation requirement will be the company registration printout.

This was for three work permit renewals - Procedure 5 - which does not have the "Form of the Employment Certification" - so there will not be a need for this customer to sign a falsified form.

But - here is a learning point: For anyone who will need to increase registered capital to support work permit renewals for multiple foreigners - doing so requires two shareholders meetings, spaced several weeks apart (evidently 30 days apart - but I have not verified this exact point). So - you cannot do this in a short period - if the work permit office rejects a renewal application on the grounds of this point,then they make a record of this - and will not accept a changed registration that returns to them in a period of time that is shorter than what would have been required to properly increase registered capital. So - it is best to increase capital BEFORE you go in to renew a work permit - otherwise you can get jammed up on timing in relation to subsequently renewing an entry permit extension.

I'm now signing out of this discussion permanently - this is a non-event for the vast majority of my clients - and probably for most readers on this board.

What a waste of teeth-gnashing.

Cheers!

Steve Sykes

Managing Director

Indo-Siam Group

Bangkok

[email protected]

www.thaistartup.com

" erstwhile staff " actually means former staff Steve.

[Ferret_IntheSky]

better having the own company abroad, i.e. Europe. Let the people work there and live here from this company's income, paying tax there and only control the income by email. Think that will be, also regarding the costs in EU, the cheaper and easier way.

[Indo-Siam]

Dr PP -

At midnight-plus when I wrote that piece (while working on my www.thermoelectricsupplier.com side business with US customers), my tired brain could not dig up the words "relentless" or "tenacious" - so I defaulted to an invalid substitute.

My " 'been with me since we opened our doors" office manager's last work day was last Friday - she's off to get married to an Irish bloke. I guess she's the "ertswhile staff" that would have filled that role.

Whatever.

Cheers!

Steve

Indo-Siam

[marty]

Gaz posted a useful reply to madmitch’s question on Wed 2004-1--13.

For anyone interested, here are some definitions:

Authorised Capital (Registered Capital)

The maximum number of shares that can be issued under a company's Charter (or Articles) at par value.

Par value is the value of a share that is set by the company issuing it, unrelated to market value.

The number of shares and par value is specified initially in the company's charter, but it can be changed with shareholder approval.

Generally a much greater number of shares are authorized than required, giving the company flexibility to issue more shares if and when needed, either to purchase additional assets, or to increase trading opportunities in other ways.

Authorised Capital is not Paid-Up Capital (see below).

Charter

A document describing the purpose, place of business, and other details of a company. Also called articles of incorporation.

Shares

A financial instrument that signifies an ownership position (called equity) in a company, and represents a claim on its proportional share in the company’s assets and profits. Ownership in the company is determined by the number of shares a person owns divided by the total number of shares. For example, if a company has 1000 shares and a person owns 250 of them, then that person owns 25% of the company.

Most shares also provide voting rights, which give shareholders a proportional vote in certain company decisions.

Partially-Paid Shares

On partially-paid shares the par value has not yet been completely paid.

Paid-Up Capital

Capital (cash, assets, or other considerations) received from investors for shares in the company, which the company utilises to purchase goods, materials, or fixed capital assets, to trade.

Paid-Up Capital is reflected in the Equity accounts of the company’s balance sheet, as opposed to Loans to the company, which are recorded as short-term or long-term liabilities in the balance sheet until repaid.

Also called contributed capital.

Working capital

Current assets minus current liabilities.

Working capital measures how much in “liquid” (readily convertible) assets a company has available to operate or build its business. It excludes assets such as the plant and equipment, furniture and fixtures, and similar “fixed capital assets” owned by the company, as well as non-current liabilities such as long-term debt.

The number can be positive or negative, depending on how much short-term debt and other current liabilities the company is carrying.

Also called net current assets, or current capital.

Capital net worth

Total assets minus total liabilities of a company, equal to paid-up shares, plus retained earnings, plus any additional paid-in surplus.

Also called owners’ equity, shareholders' equity, or net assets

Hope this dispels some of the confusion.

[Coffee Dude]

As usual I am glad to learn more about hystory, geography or maybe just about english language :

2) Protection against foreigners coming to compete for the occupations that Thai nations have the ability to do and keeping them sufficient in quantify for the demand of the labor market within the kingdom;

thai nations .... with an "s" at the end .... well I did not know it was still existing many thai nations in 2004 ... In the past yes, at least it was white and black thai in vietnam ....

Or maybe it's a mistke made by the translator .... if there is one, what not other ... Who is sure this translation is well made?

This is another sample how some people spread "erronate" information to reach some personnal goals ... increase business for exemple as last year with fear about the visa control ...

Regards

ROXAAAAAAAAAAAAAAAAAAAANe

This is not something that I normally would comment on but stick01 you made a comment about thai nations with the "s" and just prior to that you spelt history incorrectly with a "y" instead of an "i".

I have absolutely no connection with Indo Siam at all but if it was a literal translation then it was possibly an error in the original.

I cannot read or write Thai though I try to learn, but if you are not sure that there are other mistakes or not, I suggest that you apply for a copy of the original and either translate it yourself or have it done at one place and checked at a different translation office.

I concluded before reading your posts that 'nations' was a simple typo intended to read 'nationals' which follows logically into the context, sentence structure and intent of other nations permission to work regulations .

[dr_Pat_Pong]

Dr PP -

At midnight-plus when I wrote that piece (while working on my www.thermoelectricsupplier.com side business with US customers), my tired brain could not dig up the words "relentless" or "tenacious" - so I defaulted to an invalid substitute.

My " 'been with me since we opened our doors" office manager's last work day was last Friday - she's off to get married to an Irish bloke. I guess she's the "ertswhile staff" that would have filled that role.

Whatever.

Cheers!

Steve

Indo-Siam

No worry Steve. I couldn't resist it. ( but last Friday's girl qualifies it for you )

[machangezi]

What will happen to English Teachers? What's the law for English Teachers now? Is it Baht 20,000 / month salary, Baht 40,000 / month salary or what?

If a teacher is going to extend his / her visa, how much income does he / she need to show?

Cheers !

[phormio]

... Article 6. Regarding considering issuing the work permit under Article 4 to foreigners who apply for permission to work for a natural person employer who is not one having the character under Article 5, permission may be granted according to the following criteria:

  (1) Foreigners working for an employer earning an income form business operation in the past year cycle or the amount year: one person may be permitted for every Baht seven hundred thousand, the maximum being three person;

  (2) Foreigners working for an employer who has paid taxes to the government in the past year cycle: one person may be permitted for every Baht fifty thousand, the maximum being three person;

  (3) Foreigners working for an employer having Thai employees: one person may be permitted for every four Thai employees, the maximum being three persons.

  The criterion under paragraph one shall be reduced by one half in the case where the permit applicant alien has a Thai spouse in a lawfully registered marriage and in open cohabitation.

... Article 8. Considering permitting otherwise than the cases or criteria herein prescribed shall be the power of the Director-General.

...

Given this 30th day of September A.D. 2004

-Signed-

(Mr. Chuthathawat Intharasuksi)

Director-General of Employment Department

www.sunbeltasia.com

I'm not a freaking lawyer, but where's article 7?

And does this affect Amity or BOI companies?

Merci Beaucoup

[eddieold]

If I may add a p.s. to the very clear post by Marty (above). The paid up capital of a corporation can not be ascertained by reference to 'bank books'. The only possible exception could be the records for the first few days after incorporation if no transactions have taken place except the collection of subscriptions and even these will not reflect shares issued for consideration

[eddieold]

My immediately preceding post appears to have been truncated. It should have ended "consideration other than cash"

[Sunbelt Asia]

where's article 7

3) Foreigners working for an employer having Thai employees: one person may be permitted for every four Thai employees, the maximum being three persons.

---Article 7.  The criterion under paragraph one shall be reduced by one half in the case where the permit applicant alien has a Thai spouse in a lawfully registered marriage and in open cohabitation.

... Article 8. Considering permitting otherwise than the cases or criteria herein prescribed shall be the power of the Director-General.

And does this affect Amity or BOI companies?

Amity companies... yes and BOI companies...no

www,sunbeltasia.com