Work Permit And Tax Problems

[bencottrell]

OP: Khun Ex has phoned me today about my own WP. I mentioned your case to him. He says the rules have changed for all new WPs and 4:1 thai/farang ratio now applies for each WP issued.

Never heared about this, and cannot find any proof. The only conditions to get my WP (November 2008)were:

-NON-Im Visa

-the job cannot be done by a Thai

-proper qualification for the job

-the registered capital of those 2M THB for each WP.

Not to be confused with the 1 year extension of stay conditions (4:1 = Thai/Farang employees; at min 50.000THB/month salary for EU citizen)

Is there a new rule? And if, where was it announced, and how do it affect renewal/extension of existig WPs?

I will never meet the 4:1-thing...

Somewhat concerned

Ralf

I have also been advised that if you apply for your work permit without 1 year extension of stay

(ie non B multiple, 3 monthly border runs) that there is no need to show proof of paying insurance for 4 Thai employees.

If you have the one year extension, you have to prove.

my question is...isnt having the 4 Thai employees a legal requirement of having a work permit?

...and just because one government department doesnt check this and issues your WP, doesnt mean you wont get into some problems later on when it is looked into?

As I already mentioned: do not confuse the requirements for getting a legal WP, with those requirements for getting a 1-year-extension due to work/running a business. The 4:1-Thai:Farang rule and the minimum income applies only for the 1-year-extension stamp. See Sunbelt-website:

"You do not need to employ any Thai nationals or be paid the minimum salary for your nationality to obtain a work permit."

If you do not meet any criteria for one of those extension-of-stay requirements (for Visa B or for Visa O), you can legally hold an WP and work legally on that, as many Farangs do, who set up and work with a LTD Partnership businenss together with their Thai girl-friends as "Managing Director" (Thai wife would you probably qualify for an 1-year-extension on Visa O), but you still have to do those silly and time and money consuming 90-days visa runs (Thai immigration law is really old, and there are some reasons for some regulations, but someone should tell them something about globalisation; but Thais are not the only ones in this concern).

Eh, Visa-Runs, nothing for too lazy or too bussy people:

So, some very smart lawyers offer, for some of your X0,000THB, their services in preparing the "right" paperwork for getting the extension from Immigration, i.e. they will fake 4 Thai employees for you with the appropriate social insurance and tax papers (the payments will be real, and they will be done by you), and you will get your extension-stamp, but:

-Your company and you will also get a surprise visit from Imm (probability is above 90%), and if they simply cannot see those 4 employees, matching the fotografs you (or your lawyer-friend) handed in with application papers, than the following will happen:

1. Both your visa and extension of stay will get cancelled immediately (they will have the appropriate stamps on hand).

2. You have to leave the country immediately (maybe within 7 days, if the Immis have a good day). Bad situation, if you leased a house for some Mega-THB and got all your personal chattels in it, but the Immis will not care about this.

3. You, your employer (i.e. your girl-friend in most cases) and your lawyer-friend will get reported to local police, and you and your employer will face a trial on court with the following outcome:

-You will get a fine and, maybe, blacklisted for at least 1 year not to enter Thailand (you won't pay the fine until your next entry to Thailand, as you will be already somewhere else).

-Your employer will get a fine/jail time.

-Your lawyer-friend will get a "fine" from his local-police-friends, and it will take him a smile to pay that one off fom your X0,000THB mentioned above.

Worst of the worst, but it is all about the 1 year extension-of-stay due to work/business-thing and NOT about work permit. It seems, some people try to make a lot of money out of this confusion between WP and 1-Year-Stay. They tell you about the consequences of faking an extension of stay (and you have already heared rumors about that some other day) , confuse and mix this up with WP-requirements, offer their help, and become wealthy....

That is the general strategy of those very bad Rip-the-Farangs-Thais: You are stranger, you no idea, wat going on (as you cannot speak, let alone read and write Pasa Thai), this Thailand but not Farang-Land, you in big problems, but Thais very good pepol, we help you...

Thank God, there are really masses of really good people in this country, who will help you for goodwill, and those people are very ashamed about their fellow rip-the-farangs-countrymen, but they are probably not the first ones you will meet. The bad ones are full of energy, very active and profit driven...

Keep carefull

Ralf

Hi Ralf

that is excellent very clear advice....I have been confused about the 2 for a while now, and so have a few friends of mine....I will stick with my WP, do 3 monthly border runs and forget about the 1 year extension!

cheers

Ben

[thaiphoon]

Also, I do not understand why your WP has previously only been renewed in 3 month blocks. New regulations that came into effect early this year now means the Labour Department issue WP for 12 months, and expiry date of WP is no longer linked to ‘permission to stay’ date.

that is interesting. do you have a link where i can check that back?

thanks.

There are many postings about this on this forum if you care to check.

[torrenova]

To contrast a UK company:

Incorporation fees - £15

Annual return - £15

That is it. You prepare your own accounts and hand them in.

OK, it does not deal with work permits and the like but way simpler and cheaper than the Thai model even in absolute terms. In relative terms it is miles ahead.

Small businesses are not hampered with unnecessary fees and whilst the OP is being taken for a ride, the Thai system is just driving people out or under the fence.

[Arkady]

I have also been advised that if you apply for your work permit without 1 year extension of stay

(ie non B multiple, 3 monthly border runs) that there is no need to show proof of paying insurance for 4 Thai employees.

If you have the one year extension, you have to prove.

my question is...isnt having the 4 Thai employees a legal requirement of having a work permit?

...and just because one government department doesnt check this and issues your WP, doesnt mean you wont get into some problems later on when it is looked into?

No it isn't a legal requirement. It is an anal regulation made up by the Immigration Bureau, even though it is not their job to look after the interests of Thai labour. I have never been asked by the Labour Ministry for any information about Thai employees for my original WP or renewals and I don't have any anyway.

Re accounts. Normally the year end is fixed at 31st Dec by default, whatever month the company is registered, unless the management requests a different year end. The OP should check when his financial year end is. If is 31st Dec, his problems will soon be compounded with fines for late filing of last years accounts. Worse still the Labour Ministry will most likely ask for copies of audited accounts for 2008 and will deny a WP due to incomplete documentation if they are not presented. Audited accounts are not statutory required documentation for WPs the requirement for company information is often written in WPs as a condition of renewal. I think they are equired for all small companies.

[Marvo]

I have also been advised that if you apply for your work permit without 1 year extension of stay

(ie non B multiple, 3 monthly border runs) that there is no need to show proof of paying insurance for 4 Thai employees.

If you have the one year extension, you have to prove.

my question is...isnt having the 4 Thai employees a legal requirement of having a work permit?

...and just because one government department doesnt check this and issues your WP, doesnt mean you wont get into some problems later on when it is looked into?

No it isn't a legal requirement. It is an anal regulation made up by the Immigration Bureau, even though it is not their job to look after the interests of Thai labour. I have never been asked by the Labour Ministry for any information about Thai employees for my original WP or renewals and I don't have any anyway.

Re accounts. Normally the year end is fixed at 31st Dec by default, whatever month the company is registered, unless the management requests a different year end. The OP should check when his financial year end is. If is 31st Dec, his problems will soon be compounded with fines for late filing of last years accounts. Worse still the Labour Ministry will most likely ask for copies of audited accounts for 2008 and will deny a WP due to incomplete documentation if they are not presented. Audited accounts are not statutory required documentation for WPs the requirement for company information is often written in WPs as a condition of renewal. I think they are equired for all small companies.

It's a requirement that the Ministry of Labour have "unofficially" "adopted" from immigration. Upon submission of my application for a WP, the Labour office sent round an official to inspect my proposed place of work and it's employees.

I have a 1-year Non-B obtained in the UK by the way (no extension of stay).

I've never before heard anything about " no employees req. if the non-B was obtained outside of Thailand" business.

Edited July 20, 2009 by Marvo

[AjarnMartin]

Hi Folks - I'm brand-new to this site and find most information very useful but this string has got my head reeling. I'm an English teacher currently working for a reputable Thai company and am already in possession of both Non-Imm "O" Visa (obtained in Hull) and Work Permit obtained for me by my company. I live in Phetchabun and have recently had to make a visit to my "local" Immigration Office in Nan Province (+/_ 400 kms each way). Other than the journey, the staff in Nan were exemplary and I came away with an extension of my Non-Imm Visa and a multiple "re-entry" Permit at a total cost of 5,700 Baht - the published cost. Now, for immigration purposes, all I have to do is SEND proof of residency with copies of relevant Passport pages every 90 days. A dream...

I want to start my own, small school in January but am horrified at all this rigmarole regarding visas, work permits and "professional" fees. Is there anyone out there with specific insight into starting ones own school since without a work permit I don't earn??? Many thanks...

[wolfmanjack]

One thing that most of you have forgotten is that each office may have different requirements. When i got my first WP i did not have to show employees even though i had plenty. When I had to get a new one last year i had to show 4 thai employees.

[nakachalet]

1-2500BHT Monthly Accounting Fee

2-10,000BHT six monthly accounts

3-38,000BHT a year per farang lawyers fee for immigration and work permit maintenance

4-1500BHT a month witholding tax per farang to risw to 2500 shortly

5-1000BHT endless additional lawyers and government fees totalling typically 1000BHT a month (renewel of company affidavits, changing partners lists etc etc to retain and maintian work permits.

6--5200BHT social security (for Thais on our books) a month

there are several recurring items that i do not understand but this is what we pay:

first of all there are about 15 of us working and registering with pra-gun-sung-kom.

1--monthly acct fee 1,500

2--six month acct 1,500

3--lawyer fee per farang 10,000

4--withholding tax--depends on salary per pragunsungkom

5--additional att'y work--negotiable

6--social sec contributions--per pragunsungkom

several thai workers pay only 200 baht and we copay another 200 baht--per pragunsungkom

there are many other details that i am not familiar with, cause i am not in that dept but the above is what i remember. perhaps your company needs to interview other legal firms and negotiate fees. but don't tell them where you get your life-saving info.

while it is true that thaivisa appears to be located in thailand but its servers appear to be else where and so are many of its moderators as well. believe me, no one wants to have any more new enemy (especially fork-tongues lawyers) than what we unfortunately already have.... lol

good luck to your team and company. whenver i run into farangs in town or resort, i always greet them with hello and at the end of our pleasantry exchanges, i alway remember to say....

'thank you for coming to thailand and contribute to thai economy. hope you'll come back again soon'.

whenever convenient, i also invite them to have dinner with my family. there were at least several dozen tourists in the last few years, who looked startled, frightened and refused.... which is also ok....

because my thai wife already issues her ultimatum that if i invite guests to dinner so frequently like this, i'd better hire another two or three maids.... lol

[harry]

Hello Rufanuf,

Where is your "reputable" law-firm based? you can PM me on this.

I have experiences same as your but I ended this relationship before I was really ripped-off

Hi,

I wonder if anyone on this forum has experienced the problems we encounter almost every month with one issue or another over work permits, tax and their intertwined nature. It seems like its a fullt time job just dealing with this crap.

We started our business over a year ago and used a so called "reputable" firm to form our company and obtain our first work permits, which where temporary at the time (3 months, and have to visa run and renew work permit every 3 months).

Now when we started our firm we was assured by our reputable lawyer that the total overhead for retaining and maintaining our work permits would be in the region of 6000BHT per month per farang in the firm.

Since that time the costs have risen to something closer to 10,000 a month each, and there just never seems to be an end to taxes, govermment fees, accountants fees and lawyers fees.

What so frustrating about it all is how much we emphasised that tax overheads etc had to be as low as possible in our first few years of trading as we was a start up business. We may not have started it at all had we known the degree of hassle and expense involved that we are now aware of and all the costs associated with forming a company. We feel pretty duped by our reputable lawyer.

I just wondered what anyone else made of this breakdown in our base costs, and any how we can do away with so many fees/costs/tax.

2500BHT Monthly Accounting Fee

10,000BHT six monthly accounts

38,000BHT a year per farang lawyers fee for immigration and work permit maintenance

1500BHT a month witholding tax per farang to risw to 2500 shortly

1000BHT endless additional lawyers and government fees totalling typically 1000BHT a month (renewel of company affidavits, changing partners lists etc etc to retain and maintian work permits.

5200BHT social security (for Thais on our books) a month

To be honest I find most of it really hard to understand but the net effect of these charges is

approaching 220,000BHT a year, and as small business trying to get a foothold its pretty crippling.

I just wandered what others experiences where? The really frustrating thing about it all is that employing the services of lawyers and accountants just seems to make things more difficult and more expensive rather than easier! I think the lawyer who structured our company really screwed it up as well (we have subsequently been told that is why we are having so many problems, the structure of the business wont support two farangs in work permits).

To make matters worse our original lawyers never advised that under any circumstance we should let a work permit expire. Well I had to go to UK to renew my non Im B, and my permit expired whilst in the UK, so I wrongly believed it seems that the process would simply to be renew when I got back for another 3 month period....but instead I have had to start the process of applying for the work permit all over again, and now I am being told I will likely not get it! This is despite the fact I am MD of the business and that I have drawn a wage from the business and paid tax every single month even when in UK. Seems strange that they will take my tax but not give me a work permit.

Has anyone else been driven to distraction by these type of issues?

[bencottrell]

I have also been advised that if you apply for your work permit without 1 year extension of stay

(ie non B multiple, 3 monthly border runs) that there is no need to show proof of paying insurance for 4 Thai employees.

If you have the one year extension, you have to prove.

my question is...isnt having the 4 Thai employees a legal requirement of having a work permit?

...and just because one government department doesnt check this and issues your WP, doesnt mean you wont get into some problems later on when it is looked into?

No it isn't a legal requirement. It is an anal regulation made up by the Immigration Bureau, even though it is not their job to look after the interests of Thai labour. I have never been asked by the Labour Ministry for any information about Thai employees for my original WP or renewals and I don't have any anyway.

Re accounts. Normally the year end is fixed at 31st Dec by default, whatever month the company is registered, unless the management requests a different year end. The OP should check when his financial year end is. If is 31st Dec, his problems will soon be compounded with fines for late filing of last years accounts. Worse still the Labour Ministry will most likely ask for copies of audited accounts for 2008 and will deny a WP due to incomplete documentation if they are not presented. Audited accounts are not statutory required documentation for WPs the requirement for company information is often written in WPs as a condition of renewal. I think they are equired for all small companies.

It's a requirement that the Ministry of Labour have "unofficially" "adopted" from immigration. Upon submission of my application for a WP, the Labour office sent round an official to inspect my proposed place of work and it's employees.

I have a 1-year Non-B obtained in the UK by the way (no extension of stay).

I've never before heard anything about " no employees req. if the non-B was obtained outside of Thailand" business.

I've never before heard anything about " no employees req. if the non-B was obtained outside of Thailand" business.

its not if non B is obtained outside thailand that you dont need to prove 4 employees , more like if you want the 1 year extension you do need to prove.

I've learned that the 4 employees proof is nothing to do with a WP. Only if you want the 1 year extension do you need this.

well after all that, just got my work permit, no need to show proof of 4 Thai employees. Also sticking with 1 year non b multiple without 1 year extension of stay, so no need to register and pay tax on a 50,000 salary.

by far the simplest and cheapest.

as far as I can understand the only reasons for getting an extension of stay (1 year) are:

1. too lazy/busy to do 3 monthly border crossings

2. point 1 plus rich enough to pay the tax on a 50,000 salary

3. hoping to go for residency, where you need to prove x amount of non B multiple visas renewed inside Thailand (which you can only do with 1 year extention of stay)

if none of the above apply, I stay stick with the simplest and cheapest method (non B multiple, WP, 3 monthly border crossings + more baht in your pocket!)

[on-on]

I've never before heard anything about " no employees req. if the non-B was obtained outside of Thailand" business.

its not if non B is obtained outside thailand that you dont need to prove 4 employees , more like if you want the 1 year extension you do need to prove.

I've learned that the 4 employees proof is nothing to do with a WP. Only if you want the 1 year extension do you need this.

well after all that, just got my work permit, no need to show proof of 4 Thai employees. Also sticking with 1 year non b multiple without 1 year extension of stay, so no need to register and pay tax on a 50,000 salary.

by far the simplest and cheapest.

as far as I can understand the only reasons for getting an extension of stay (1 year) are:

1. too lazy/busy to do 3 monthly border crossings

2. point 1 plus rich enough to pay the tax on a 50,000 salary

3. hoping to go for residency, where you need to prove x amount of non B multiple visas renewed inside Thailand (which you can only do with 1 year extention of stay)

if none of the above apply, I stay stick with the simplest and cheapest method (non B multiple, WP, 3 monthly border crossings + more baht in your pocket!)

This is an interesting point that I hadn't considered. What's the downside here, that eventually immigration will refuse to issue you further Non-Imm Bs based on the fact that you have so many consecutively?