May A Thai Company Outsource To A Foreign Company/freelancer?

[welovesundaysatspace]

General question: A Thai company needs to carry out a project. They do not find a proper partner in the Thai market so they would like to outsource the project to be done by a foreign company or freelancer. Is that possible?

My situation: I am living in Bangkok since almost 2 years now. I was studying here, then working as a trainee for a multinational company. Now I am finishing my masters degree here.

Since my ex-boss (the company I was trainee at) was very satisfied with my work, he asked me to carry out a similar project at his new company. The project has to start as soon as possible and is supposed to be finished within 2 months only. Furthermore, I will not receive a per-month salary, but I will charge them a fixed price based on a per-diem and man-days calulated. So a work-permit does not seem to be the best solution.

However, I can easily register a Ltd. or similar company back home. I am used to it, because I was regularly working as a freelancer there before I came to Thailand. When a company had a specific task to be carried out, we would provide them a proposal and quotation and once agreed we would found a Ltd. for the period of that project and get paid with a fixed prices. Is that possible for me here, too, or could there be any work-permit issues?

[richardt1808]

You will still need a work permit.

The law states clearly that if you perform any kind of work, whether as a salaried employee or not, you still need WP. Theoretically, even if you work in your own home on projects for companies which are outside Thailand, you still require one (although fairly low-risk of being discovered). Getting caught without WP is a serious offence and could result in your being imprisoned by the Immigration Police and then deported. Also, if you do the work as a foreign company or entity, your employer will have to deduct 14% witholding tax from anything he pays you.

Edited January 30, 2010 by richardt1808

[thaiphoon]

As said, by law any form of work requires a work permit, which would need to be 'sponsored' by a Thai registered company.

[welovesundaysatspace]

So the issue here is that I am currently in Thailand, i.e. the work I am doing - even though it is work for my own Ltd. back home - is physically done in the Kingdom, but not back home?

[thaiphoon]

What you are doing is illegal. WP requirements are detailed on Ministry of Labour website here.. Whether you get caught doing what you are doing is another matter, but beware of the consequences. Can be jail time but often reduced to fine and deportation.

EDIT:

Looking back through your posts it would appear that you are on tourist visa. Note that it is also illegal to work on a tourist visa. You need to hold Non-Immigrant visa to support work permit application.

[welovesundaysatspace]

So how can a foreign company sell goods to a company in Thailand or a Thai company purchase goods from a foreign company?

[Jimbo]

That is a completely different situation. If you are actively working in Thailand then you need a work permit even if you register a company outside of Thailand and get a Thai company to invoice your foreign company.

[thaiphoon]

Being a sales/marketing representative is different from being a 'worker'. For working visits the Thai company can obtain a temporary 15 day work permit for the foreign from local labour office.

[Langsuan Man]

You ask a question and you are given an answer

You don't like the answer so you ask another non nonsensical question

Goods are not people working and are covered by a whole set of completely different laws

[welovesundaysatspace]

That is a completely different situation. If you are actively working in Thailand then you need a work permit even if you register a company outside of Thailand and get a Thai company to invoice your foreign company.

Thanks, that was my question whether it is a question of where the work physically is carried out or if a Thai company generally cannot purchase anything from a foreign company.

So I will ask the company again if it is possible to get a work-permit. I already know that I would neet a non-immigrant visa. Can you recommend a best way to get one? The type B visa is not possible for me a a student as I just do not have the 3,000,000 THB. For an ED visa I would have to register at an university or language school here again which would cost me another 20,000-30,000 THB fees again.

Being a sales/marketing representative is different from being a 'worker'. For working visits the Thai company can obtain a temporary 15 day work permit for the foreign from local labour office.

So if a Thai company would like to hire The Boston Consulting Group they would not be able to do so (supposed BCG does not have a Thai office) or would need to get Work-Permit for all of their consultants coming here for the project?

You ask a question and you are given an answer. You don't like the answer so you ask another non nonsensical question

Goods are not people working and are covered by a whole set of completely different laws

The question makes sense. At least as far as my understanding goes it makes sense: For me "consultancy" is a good same as an "iPod" is one. My good is knowledge; Apples good is MP3 players. And how would you classify a customized IT system which consists of the physical piece of software and the immaterial work of customizing it using specific know-how? Would it be a "good" or not?

Edited January 30, 2010 by welovesundaysatspace

[Jimbo]

You can ask the company to help you with the Non Imm B visa. They will need to give you various documents (details about the specific documents can be found on Thaivisa) and then you go abroad to one of the Thai embassies or consulates and request a Non Imm B visa.

[welovesundaysatspace]

Thanks. So that way I wouldn't need to have 3,000,000 THB or similar?

[Jimbo]

Thanks. So that way I wouldn't need to have 3,000,000 THB or similar?

Correct but if you go to a consulate or embassy in the region then you will only get a single entry 3 month Non B visa. They will only issue the multiple entry one once you have a work permit. If you would fly back to Europe for example then you could apply for a multiple entry Non B visa with the company documents etc.

By the way, having a non immigrant visa B still does not solve your issue with working here legally as you would still need to obtain a work permit somehow.

Edited January 30, 2010 by Jimbo

[welovesundaysatspace]

Okay, to get it clear: The company would need to issue certain documents for me, which I would take to e.g. Vientiane to get a non-imm B visa. With that visa I am allowed to hold a work-permit, so once back the company can apply for a work-permit for me, right? Once I got the work-permit I can go abroad again to apply for a multiple-entry 1 year type B visa (otherwise I would have my 3 months single-entry B visa).

//edit: Which documents are needed so I can get a 3-months B visa in Vientiane or Phnom Penh?

Edited January 30, 2010 by welovesundaysatspace

[Jimbo]

Yep, you got it right. If you are on a single non B and the work permit is obtained fast enough then you could in theory get that visa extended by a year at the immigration office which means you would not have to go abroad to get the multiple entry Non B visa.

Edited January 30, 2010 by Jimbo

[welovesundaysatspace]

Sorry, forgot to add this question to my posting before:

Which documents are needed so I can get a 3-months B visa in Vientiane or Phnom Penh?

[thaiphoon]

Any foreigner working here needs a work permit. It is as simple as that. Do not know where you come up with needing 3M baht from.

The process for obtaining WP is not complicated, and would suggest you are put on the books of your boss’ company who can act as your ‘sponsor’. They will apply for WP for you at local labour office. They will receive Form WP3 receipt on application. You take that receipt with you plus company documents to consulate abroad when applying for Non-B visa. Once your Non-B visa is issued, the local labour office will need to see your passport showing the Non-Immigrant visa before they will issue the work permit. Will be single entry visa first time around, but can obtain multiple entry visa later when work permit is available (or alternatively obtain extension of stay based on employment from Thai immigration if you meet the requirements). KL would be a good place to go.

This link provides details of the papers required to obtain Non-B visa in the region.

[welovesundaysatspace]

Do not know where you come up with needing 3M baht from.

It says you need a Non-B visa, while a Non-B visa needs a 3,000,000 THB on your bank account. // edit: Sorry, I missed an "or" here: So either the 3,000,000 THB investment OR being in the work-permit process allows for a Non-B visa, ((URL removed))

You take that receipt with you plus company documents to consulate abroad when applying for Non-B visa.

What additional company documents should I bring?

Edited January 31, 2010 by lopburi3
URL with incorrect information removed - lopburi3

[Jimbo]

I think the 3 million THB he is referring to is about the amount of registered capital a company would need to be able to get a work permit for a foreign employee. So I guess he thought about setting up his own company and getting a work permit that way.

[Jimbo]

What additional company documents should I bring?

Have a look on the website of the ministry of foreign affairs:

http://www.mfa.go.th/web/2482.php?id=2492

[thaiphoon]

The requirements are registered share capital of 2 million baht for each work permit issued by the 'sponsor' company. If setting up own company will need to employ 4 Thais.

[welovesundaysatspace]

I read this website:((URL removed))

"Requirement for Non-Imm B (Business Visa)

The foreigner who wish to apply for the Non-Immigration Visa under type B (Business), need to have one of the following requirements:

# Being employed by the Company Limited, as in case, such foreigner need to be during the process of Work Permit approval from Department of Labour or;

# Investing a minimum of 3 million Baht in the Kingdom of Thailand by ... "

Obviously, I missed the "one of he following" and "or" - so either being in the work-permit process OR investing a minimum of 3MTHB allows for a Non-B visa.

[Jimbo]

The requirements are registered share capital of 2 million baht for each work permit issued by the 'sponsor' company.

I am aware of that but that was the only thing I could think of which he might be referring to.

[thaiphoon]

I read this website:((url removed))

"Requirement for Non-Imm B (Business Visa)

The foreigner who wish to apply for the Non-Immigration Visa under type B (Business), need to have one of the following requirements:

# Being employed by the Company Limited, as in case, such foreigner need to be during the process of Work Permit approval from Department of Labour or;

# Investing a minimum of 3 million Baht in the Kingdom of Thailand by ... "

Obviously, I missed the "one of he following" and "or" - so either being in the work-permit process OR investing a minimum of 3MTHB allows for a Non-B visa.

That website seems to have last been updated in 2005 and is out of date. The 3M baht figure relates to an investment visa. That figure was increased to 10M baht in November 2008.

[welovesundaysatspace]

Thanks for all your answers. Good help as always! :-)

[thaiphoon]

No problem. Just ask if you have any further questions along the way.

[Marvo]

Pardon me for hopping onto the thread, but could one of you learn-ed fellows explain to me in as much detail as you can how the witholding tax system works for a Thai company invoicing an overseas company (for say 100,000 baht). Say the overseas company sends the 100,000 baht to the Thai company - what happens next?

Thanks.

[WarpSpeed]

So the issue here is that I am currently in Thailand, i.e. the work I am doing - even though it is work for my own Ltd. back home - is physically done in the Kingdom, but not back home?

You can get a WP for a subsidiary company if you had a registered legal company off shore.. Just register here as an off shore subsidiary of your home firm.

Also online stores for example as home work is not considered working in that sense as it is not a business based on Thai soil and if you have your own product and are say selling via the internet that likewise is not in that category either as it is a specialty product exclusive to you..

Edited January 30, 2010 by WarpSpeed

[thaiphoon]

Pardon me for hopping onto the thread, but could one of you learn-ed fellows explain to me in as much detail as you can how the witholding tax system works for a Thai company invoicing an overseas company (for say 100,000 baht). Say the overseas company sends the 100,000 baht to the Thai company - what happens next?

Thanks.

It is not so much about the funds coming in, but what tax paperwork the Thai company issued on the supporting invoice requesting payment. And that will depend upon the tax status on the Thai company. If the Thai company is registered with Revenue Department as a provider of 'export services', it will be zero rated for VAT. In that case the Thai company would issue an invoice for 100k of services and add VAT at 0% with total invoice amount showing 100k, and would keep the full amount when received. Otherwise, the invoice would be issued for 100k for services plus 7% VAT totaling 107k, and the VAT amount would need to be paid across to the Revenue Department by the 7th day of the month following issue of invoice via monthly withholding tax return.

[thaiphoon]

So the issue here is that I am currently in Thailand, i.e. the work I am doing - even though it is work for my own Ltd. back home - is physically done in the Kingdom, but not back home?

You can get a WP for a subsidiary company if you had a registered legal company off shore.. Just register here as an off shore subsidiary of your home firm.

Also online stores for example as home work is not considered working in that sense as it is not a business based on Thai soil and if you have your own product and are say selling via the internet that likewise is not in that category either as it is a specialty product exclusive to you..

Sorry but not correct. If working in Thailand, even from home or on the internet, you need a work permit to operate legally. The fact that you may not get caught is a different matter. And the penalties if caught are severe. More information on the issue of work permits can be found at the Ministry of Labour's website here.