Rental Income - Seeking A Definative Answer

[JohnSkliros]

I have spent the better part of several hours trawling Thaivisa as well as the Internet in general for an definitive answer to the direct question posed above and I've found threads on Thaivisa, as well as other sites, that claim

No you don't require a work permit.

And I have found some that claim

Yes you do.

I have also read the Foreign Employment Act and am unable to determine an answer.

I'm sure I can't be the only one seeking this information and I would appreciate all and any factual input.

To be explicit, here is the scenario:

A ferang, living here on a Retirement Visa, has a 30-year lease on a piece of land which is duly recorded against the chanote at the Land Office.

He has a Lease Agreement as well as an Agreement bestowing a Right of Superficies with the land owner (Lessor) which entitles him to erect and be the owner of structures on the land.

He is not married and his relationship with the owner of the land is purely that of Lessee/Lessor.

He builds a structure using his own money brought into the country.

He wishes to rent out the property (land and structure) and directly receive the rental income (the Agreements with the owner provide for such an eventuality).

He already has a customer so he doesn't need to advertise or otherwise tout for business and there isn't any agent involved.

His customer will be responsible for all the upkeep and maintenance of the property.

He will happily register for income tax purposes and pay all and any taxes as required.

He doesn't want to bend the rules or run foul of the law in Thailand.

Does he require a Work Permit?

If so, what are the chances of actually obtaining such a Work Permit?

(I understand that answers to this last question may be subjective)

[saakura]

Intersesting topic. I do not recollect seeing any definitive answer to such a question on TV and will watch this space for replies from more informed members.

[opalhort]

No Workpermit is required for income from rent.

But you have to register with the revenue department for a Tax ID and file every year the form Por Ngor Dor 90!

Yes, form 90, the regular form 91 is only for income derived from employment.

What I don't know is if the income from rent inside Thailand would count as part of the financial requirement for extension of stay based on retirement.

[JohnSkliros]

No Workpermit is required for income from rent.

But you have to register with the revenue department for a Tax ID and file every year the form Por Ngor Dor 90!

Yes, form 90, the regular form 91 is only for income derived from employment.

What I don't know is if the income from rent inside Thailand would count as part of the financial requirement for extension of stay based on retirement.

Thanks for the response opalhort.

Do you perhaps have an official source for "No Work Permit Required" - like is there some specific legislation or ruling?

[gamini]

No Workpermit is required for income from rent.

But you have to register with the revenue department for a Tax ID and file every year the form Por Ngor Dor 90!

Yes, form 90, the regular form 91 is only for income derived from employment.

What I don't know is if the income from rent inside Thailand would count as part of the financial requirement for extension of stay based on retirement.

Thanks for the response opalhort.

Do you perhaps have an official source for "No Work Permit Required" - like is there some specific legislation or ruling?

The rental income is something you would have to clear with immigration who may not allow it.

But you do not need a work permit. But if you bought money into Thailand you can send it out.

So if you set up a fund with an investment company abroad that paid you an income of bt65,000 a month whilst remitting your rental to them each month it should be OK as long as the rental is more than Bt 65,000

[Maestro]

...Do you perhaps have an official source for "No Work Permit Required" - like is there some specific legislation or ruling?

The laws and regulations say for what you need a work permit, not for what you don't need it.

[JohnSkliros]

To the three people who have responded so far, many thanks. And judging from those responses, this matter isn't cut and dried.

@ opalhort - The issue isn't about generating income to satisfy Retirement Visa requirements - only the Work Permit aspect.

@ gamini - Whilst I certainly will approach Immigration, the Foreign Employment Act / Working of Aliens Act makes no mention of that department.

@ maestro - The problem is that the wording of the applicable law is very broad and subject to interpretation. For example the law states:

"work" means engaging in work by exerting energy or using knowledge whether or not in consideration of wages or other benefit;

It's obvious to anyone reading it that the word WORK isn't itself defined. The OED has this to say about the word:

n noun

1 activity involving mental or physical effort done in order to achieve a result.

2 such activity as a means of earning income

Which seems to imply that .........

Then again, could there be a definitive answer if one was to read the Thai wording of the law?

[fcgprg]

To the three people who have responded so far, many thanks. And judging from those responses, this matter isn't cut and dried.

@ opalhort - The issue isn't about generating income to satisfy Retirement Visa requirements - only the Work Permit aspect.

@ gamini - Whilst I certainly will approach Immigration, the Foreign Employment Act / Working of Aliens Act makes no mention of that department.

@ maestro - The problem is that the wording of the applicable law is very broad and subject to interpretation. For example the law states:

"work" means engaging in work by exerting energy or using knowledge whether or not in consideration of wages or other benefit;

It's obvious to anyone reading it that the word WORK isn't itself defined. The OED has this to say about the word:

n noun

1 activity involving mental or physical effort done in order to achieve a result.

2 such activity as a means of earning income

Which seems to imply that .........

Then again, could there be a definitive answer if one was to read the Thai wording of the law?

I would say that by having a property and being paid rent from someone who is living in that property you are exerting energy and knowledge by owning it and renting it out .

[Maestro]

I would say that by having a property and being paid rent from someone who is living in that property you are exerting energy and knowledge by owning it and renting it out .

And I would say that opening a bank account, depositing money in it, and earning interest on the deposit you are exerting energy and knowledge by owning it and earning the interest.

[lopburi3]

Luckily the Thai do not normally get that paranoid about laws and take a much less strict road. But it makes it impossible to provide "A Definative Answer". There is none.

[Maestro]

...The problem is that the wording of the applicable law is very broad and subject to interpretation...

Exactly. The Department of Employment implements the law. If they have any written guidelines for this, these guidelines are for internal use and are not published and unavailable to you. If a case goes to court, the judges make a decision based on their interpretation of the law and the evidence placed before them. A decision in one particular case may not be used to assume that a court decision would be the same in another similar or identical case.

Question: Has any ThaiVisa member ever posted that he was arrested and/or fined for renting out his real estate property without a valid work permit?

Answer: I have not seen any such post.

[opalhort]

Thanks for the response opalhort.

Do you perhaps have an official source for "No Work Permit Required" - like is there some specific legislation or ruling?

No, I don't have any confirmed info, but about 10 or so years ago we had an elderly (I think over 70) foreigner living in our area who had exact the same question.

My wife called the labor department (BKK) at the time and was told that no WP is required but he had to register with the revenue department for tax purposes.

In any case, if you are on an extension of stay based on retirement then you won't be able to obtain a WP in the first place.

[JohnSkliros]

Okay, I agree that a definitive answer is unlikely to be forthcoming here (just because there probably isn't one).

I will write to the relevant departments and seek clarification and post a follow up in due course.

Thanks to all ......

[Jingthing]

My take, it isn't specifically legal or illegal to do this without a work permit. You can do it and most probably not have any problem not having a work permit. However, because it is one of the many grey areas in Thailand, you may open yourself up to future "crackdown" of one kind or another. So don't think there is no risk. A similar situation when people "own" properties here with various loophole shell company schemes, though that I would rate riskier than legally owning condos and renting them.

[Maestro]

...I will write to the relevant departments and seek clarification and post a follow up in due course...

Good idea. I believe, though, that you won't get an answer to your written inquiry. Phone (in Thai) or go there personally and you will receive a verbal answer.

[Jingthing]

Just a thought about this, but wouldn't the acid test for this issue be if a foreigner was arrested for this, and the issue went to trial and the judge ruled the arrest wasn't valid? Probably a naive thought, but I agree it will be very unlikely to get any written opinion about this from a real authority. You could pay for opinions from various lawyers though, but I doubt those would be worth a heck of a lot. Bottom line, accept legal ambiguity here or don't do it.

[Maestro]

...You could pay for opinions from various lawyers...

Ask three different lawyers and you will get four different opinions.

[Jingthing]

...You could pay for opinions from various lawyers...

Ask three different lawyers and you will get four different opinions.

My sentiment precisely.

The OP is wise to seek information about this so he can make his own informed decision on his risk tolerance in carrying out his plan. But guarantees that this can't possibly burn him in the future are beyond the realm of the possible.