Does foreign Director of Thai company need Work Permit?

[doublephil]

I have an important question which requires the correct answer according to the law please - I am not interested in anyone's personal opinions.

It has always been my understanding for several years that a foreigner, who is a Director of a Thai company, but who does not do any work, paid or unpaid - and whose only activity is to sign any necessary documents such as annual accounts - does not require a Work Permit.

Yes - I understand that signing a document can be considered technically as doing work - but from many years of experience and never once being asked to show my Work Permit (until today), from consulting various government officials and from questions and answers on this forum in previously - I have always understood that a Work Permit is not an essential and legal requirement for such minimal activity.

Is this correct - or not? and is there any specific rule or regulation that covers this situation?

Thank you

[Pib]

You might was to look over in the Ask a Lawyer forum. A ThaiVisa search shows several similar type questions have been answered by a Thai Lawyer.

For example:

http://www.thaivisa.com/forum/topic/754997-work-permit/?p=8300098

[Soutpeel]

My undrrstanding is the minute you sign a bit of paper in this capacity while physically in Thailand your working and require a WP BTW all your going to on here is opinions, as the only department who will answer this question definitively is the DOL whose jurusdiction your company falls under so go and ask them

Edited July 9, 2015 by Soutpeel

[samran]

Not directly answering your question but recent changes make attending your own company's meeting a work permit free activity

http://www.kpmg.com/global/en/issuesandinsights/articlespublications/taxnewsflash/pages/ies-flash-alerts-2014/flash-alert-2015-050.aspx#.VSdtgyqmwOg.twitter

In terms of your question I would agree with soutpeel.

[hereforgood]

I think you will find that signing of the papers constuites work and a WP is needed

[recycler]

Ask 5 lawyers and you'll get 5 answers.

There are thousands of companies holding real estate with foreign directors that don't have work permits. There are also (partly) foreign owned companies with directors not residing in Thailand that sign documents and initiate bank transactions etc. and don't have work permits.

I would guess that an important questions is if you get income directly related to actual work or labor.

As often with the law in first instance it's interpretation is in the hands of the official involved and if you push it further the outcome of court case can go anywhere depending on who your lawyer is en who the judge is etc....

[doublephil]

Thank you for the constructive replies

BTW - If we require specific information about the law in Thailand - <deleted>

Edited July 9, 2015 by ubonjoe
inflammatory comment removed

[blackcab]

This was posted on the forum not so long ago:

In response to this opinion of the Council of State, in March 2015 the Department of Employment issued the Notification Re Activities Not Considered Work under the Foreign Workers Act, B.E. 2551 (2008), under which the department explicitly clarifies that the following activities are not considered the work under the Act. This means a foreigner that is engaged in any of these activities is no longer required to obtain a work permit from the department or to notify the department for any work with a short period of time.

1. Attending a meeting or a seminar.

2. Attending a fair, an exhibition or a goods exhibition.

3. Making any visit to observe business or to meet and negotiate a business.

4. Attending special and academic lectures.

5. Attending technical training and seminars.

6. Purchasing goods in a good exhibition.

7. Attending a meeting of a board of director of ones company

http://www.thaivisa.com/forum/topic/827085-thailand-to-slightly-narrow-definition-of-work/

[khunPer]

To my understanding: Signing annual statements and the like, a non working director of a Thai limited company can do (only) without a Work Permit. Anything else (officially) requires a WP.
(Fyi. I am shareholder and non working director in Thai ltd. co.)

[oztaurus]

Another consideration, which i personally ran foul of recently, is that if the director does not yet have a work permit, then foreign staff cannot apply for a work permit.

If you are a one man band that may not be a problem, but if you employ foreign staff, even if you have the stated market capitalisation, they are stymied until you have your WP

[Maestro]

"...whose only activity is to sign any necessary documents such as annual accounts..."

Why would a non-executive director have to sign the company's accounts or any other document?

[dotpoom]

My undrrstanding is the minute you sign a bit of paper in this capacity while physically in Thailand your working and require a WP BTW all your going to on here is opinions, as the only department who will answer this question definitively is the DOL whose jurusdiction your company falls under so go and ask them

I wouldn't consider Pib's link to what the Lawyers say as just a "person's opinion".....I expect the Lawyers statement on this matter was given with full knowledge of the law.

[Soutpeel]

"...whose only activity is to sign any necessary documents such as annual accounts..."

Why would a non-executive director have to sign the company's accounts or any other document?

Exactly, seems to me the OP is playing an active role in running the business

As stated if he wants clarification go and ask the DOL under whose jurisdiction the company falls

[Soutpeel]

My undrrstanding is the minute you sign a bit of paper in this capacity while physically in Thailand your working and require a WP BTW all your going to on here is opinions, as the only department who will answer this question definitively is the DOL whose jurusdiction your company falls under so go and ask them

I wouldn't consider Pib's link to what the Lawyers say as just a "person's opinion".....I expect the Lawyers statement on this matter was given with full knowledge of the law.

But nonetheless it's still an opinion the relevant government department charged with looking after WP and related is the DOL

so how hard is it to go and ask them ? They are one of the better government departments to deal with

[bigt3116]

Ask 5 lawyers and you'll get 5 answers.

There are thousands of companies holding real estate with foreign directors that don't have work permits. There are also (partly) foreign owned companies with directors not residing in Thailand that sign documents and initiate bank transactions etc. and don't have work permits.

I would guess that an important questions is if you get income directly related to actual work or labor.

As often with the law in first instance it's interpretation is in the hands of the official involved and if you push it further the outcome of court case can go anywhere depending on who your lawyer is en who the judge is etc....

Income or not has no bearing on the requirement for a work permit.

[FritsSikkink]

To my understanding: Signing annual statements and the like, a non working director of a Thai limited company can do (only) without a Work Permit. Anything else (officially) requires a WP.

(Fyi. I am shareholder and non working director in Thai ltd. co.)

Owning a company (shareholder), no work permit needed

Signing statements means you are doing somethin operational (not much but it is work), work permit needed

Look here for more info:

http://legacy.phuketgazette.net/issuesanswers/details.asp?id=1329

Edited July 10, 2015 by FritsSikkink

[FritsSikkink]

Ask 5 lawyers and you'll get 5 answers.

There are thousands of companies holding real estate with foreign directors that don't have work permits. There are also (partly) foreign owned companies with directors not residing in Thailand that sign documents and initiate bank transactions etc. and don't have work permits.

I would guess that an important questions is if you get income directly related to actual work or labor.

As often with the law in first instance it's interpretation is in the hands of the official involved and if you push it further the outcome of court case can go anywhere depending on who your lawyer is en who the judge is etc....

Your guess is wrong. Ask the chief of the work permit division and you get 1 answer, you need a work permit:

http://legacy.phuketgazette.net/issuesanswers/details.asp?id=1329

[recycler]

To my understanding: Signing annual statements and the like, a non working director of a Thai limited company can do (only) without a Work Permit. Anything else (officially) requires a WP.

(Fyi. I am shareholder and non working director in Thai ltd. co.)

Owning a company (shareholder), no work permit needed

Signing statements means you are doing somethin operational (not much but it is work), work permit needed

Look here for more info:

http://legacy.phuketgazette.net/issuesanswers/details.asp?id=1329

This would mean that every foreigner controlling ownership of a house with a company Ltd would need a work permit.....

Than again, controlling ownership of a house with a Co. Ltd is already circumventing the law. So it has to do a lot with selective and/or random enforcement and interpretation of laws.

[flyingdoc]

Blackcab's summary covers most of the points!

[khunPer]

To my understanding: Signing annual statements and the like, a non working director of a Thai limited company can do (only) without a Work Permit. Anything else (officially) requires a WP.

(Fyi. I am shareholder and non working director in Thai ltd. co.)

Owning a company (shareholder), no work permit needed

Signing statements means you are doing somethin operational (not much but it is work), work permit needed

Look here for more info:

http://legacy.phuketgazette.net/issuesanswers/details.asp?id=1329

Thanks for the link (answer date is 2012), but I think this forum's sponsor-lawyer reply quite clear (2014): »...non working directors are limited in general business functions example you can sign and certify company documents only but you can't sign any banking documents eg. Salary etc. as that would count as working.«

Also the link (in a post above) to the article from Narit & Associates law firm from May 2015 seems to clearify a lot of WP questions, when not "really" working; re. as above post says, "Blackcab's summary".

[Arkady]

I can just pass on my own experiences and those of friends. My secretary checked with various parties, including Immigration, when I became a non-exec director of a company in Thailand in which my parent co. overseas acquired a minority stake. The conclusion was that attending meetings as a non-exec director would 'probably' be OK but signing documents on behalf of the company would require a WP.

Later I set up a small company and was warned by the lawyer that set it up that I might need a WP for docs I signed as authorised director might not be accepted by govt departments, e.g. the Revenue Dept. I was in this situation without a WP for several years and never had a problem signing docs with the Rev Dept or anyone else. Bangkok Bank refused to open a company account without WP but KBANK had no problem.

Two friends were both rejected for permanent residence on the grounds by Immigration that they were directors of Thai companies that were not recorded in their WPs. One of them was just an unpaid non-exec director without signing power and other was an exec director, actually receiving and paying tax on income from the company. Both were told that if they didn't withdraw their applications, the Labour Ministry would prosecute them working without WP.

So, as often with Thai law, it is not clear cut and the definition of 'work' in the Working of Aliens Act is so broad as to include going to the toilet, if some official decides it does. In most situations being a non-exec director, unpaid without signing power is unlikely to get you into trouble but this is not guaranteed, as the interpretation of Thai law can vary. Certainly don't apply for PR, if you are a director without WP anyway.

[blackcab]

I can just pass on my own experiences and those of friends. My secretary checked with various parties, including Immigration, when I became a non-exec director of a company in Thailand in which my parent co. overseas acquired a minority stake. The conclusion was that attending meetings as a non-exec director would 'probably' be OK but signing documents on behalf of the company would require a WP.

Later I set up a small company and was warned by the lawyer that set it up that I might need a WP for docs I signed as authorised director might not be accepted by govt departments, e.g. the Revenue Dept. I was in this situation without a WP for several years and never had a problem signing docs with the Rev Dept or anyone else. Bangkok Bank refused to open a company account without WP but KBANK had no problem.

Two friends were both rejected for permanent residence on the grounds by Immigration that they were directors of Thai companies that were not recorded in their WPs. One of them was just an unpaid non-exec director without signing power and other was an exec director, actually receiving and paying tax on income from the company. Both were told that if they didn't withdraw their applications, the Labour Ministry would prosecute them working without WP.

So, as often with Thai law, it is not clear cut and the definition of 'work' in the Working of Aliens Act is so broad as to include going to the toilet, if some official decides it does. In most situations being a non-exec director, unpaid without signing power is unlikely to get you into trouble but this is not guaranteed, as the interpretation of Thai law can vary. Certainly don't apply for PR, if you are a director without WP anyway.

Was being a director something they declared in their application or is a check for company directors part of the vetting process?

[Arkady]

I can just pass on my own experiences and those of friends. My secretary checked with various parties, including Immigration, when I became a non-exec director of a company in Thailand in which my parent co. overseas acquired a minority stake. The conclusion was that attending meetings as a non-exec director would 'probably' be OK but signing documents on behalf of the company would require a WP.

Later I set up a small company and was warned by the lawyer that set it up that I might need a WP for docs I signed as authorised director might not be accepted by govt departments, e.g. the Revenue Dept. I was in this situation without a WP for several years and never had a problem signing docs with the Rev Dept or anyone else. Bangkok Bank refused to open a company account without WP but KBANK had no problem.

Two friends were both rejected for permanent residence on the grounds by Immigration that they were directors of Thai companies that were not recorded in their WPs. One of them was just an unpaid non-exec director without signing power and other was an exec director, actually receiving and paying tax on income from the company. Both were told that if they didn't withdraw their applications, the Labour Ministry would prosecute them working without WP.

So, as often with Thai law, it is not clear cut and the definition of 'work' in the Working of Aliens Act is so broad as to include going to the toilet, if some official decides it does. In most situations being a non-exec director, unpaid without signing power is unlikely to get you into trouble but this is not guaranteed, as the interpretation of Thai law can vary. Certainly don't apply for PR, if you are a director without WP anyway.

Was being a director something they declared in their application or is a check for company directors part of the vetting process?

One of them was caught out because he had taxed income from the company, so his tax receipts didn't match the income from his main job. I am not sure if the other guy was caught because of something he disclosed in his application or if they actually did some digging. I recommend applicants not to mention things like doing charity wot in their applications, unless they have a WP. They ask you to demonstrate your contributions to Thailand but it's better to use examples to do with your main job and show receipts from registered Thai charities.

[simon43]

...non working directors are limited in general business functions example you can sign and certify company documents only but you can't sign any banking documents eg. Salary etc. as that would count as working.

What about the scenario where you do sign banking documents, but only do so when you are physically outside of Thailand?

For example, suppose that I am a non-working director. I am not allowed to sign the banking documents to eg open the company bank account, because that is construed as work in Thailand. So I take the documents out of Thailand, (which can be very easy for those of us living near borders), sign the documents and then return to Thailand.

If challenged, the out/in stamps in my passport will demonstrate that I was not in Thailand when the documents were signed. (Could even take a photo of the document next to a recognisable, overseas building etc.

[thedemon]

...non working directors are limited in general business functions example you can sign and certify company documents only but you can't sign any banking documents eg. Salary etc. as that would count as working.

What about the scenario where you do sign banking documents, but only do so when you are physically outside of Thailand?

For example, suppose that I am a non-working director. I am not allowed to sign the banking documents to eg open the company bank account, because that is construed as work in Thailand. So I take the documents out of Thailand, (which can be very easy for those of us living near borders), sign the documents and then return to Thailand.

If challenged, the out/in stamps in my passport will demonstrate that I was not in Thailand when the documents were signed. (Could even take a photo of the document next to a recognisable, overseas building etc.

That scenario is perfectly legal, as you would logically think it would be. How can you be accused of working in Thailand if you're not in Thailand, right?

Several years ago, I was involved with a joint venture where one of the investing partners was not resident in Thailand, had no immigration status other than as a visitor and obviously no work permit. He was a director of the company and understandably wanted to retain some control of major banking transactions.

As is often the case regarding work permits, you will only have a problem when you either piss someone off or they see a chance to shaft you. That can and does happen.

The advice we got from our lawyers was to make sure any document signed by the non-resident director was dated when they were not in Thailand.

[digitalchromakey]

The Thai Company Registration Document from the Commerce Department (DBD) explicitly defines who the signing directors are - if you are named on this document then you would be expected to be for example the signatory against a bank account and the signatory for tax returns, social insurance payments, etc.

In this case, certainly in my area, Labour would insist on a WP and sometimes even that a description is entered into the WP that one is able to sign company documents.

Other, occasional signatures should be ok as these can be legally made when you are out of country.

As has been pointed out, if you are a signing director who is actively involved in the day to day running of a company, then one's holding a WP is expected by Labour.

[thedemon]

The Thai Company Registration Document from the Commerce Department (DBD) explicitly defines who the signing directors are - if you are named on this document then you would be expected to be for example the signatory against a bank account and the signatory for tax returns, social insurance payments, etc.

In this case, certainly in my area, Labour would insist on a WP and sometimes even that a description is entered into the WP that one is able to sign company documents.

Other, occasional signatures should be ok as these can be legally made when you are out of country.

As has been pointed out, if you are a signing director who is actively involved in the day to day running of a company, then one's holding a WP is expected by Labour.

Sorry, not correct.

Any director that can bind the company can do so whether they are Thai, foreign or Martian and whether they have a work permit, a non-immigrant visa or they're an overstayer. That they may or may not be deemed to be working illegally has no bearing on that. And where that director is physically located when they sign has no bearing on that either.

By whom are you "expected to be for example the signatory against a bank account and the signatory for tax returns, social insurance payments, etc."? Not the DBD and not the Labour Department anyway.

If you are not working in Thailand, how can the Labour department insist you have a WP? How would they even know you exist?

[digitalchromakey]

The Thai Company Registration Document from the Commerce Department (DBD) explicitly defines who the signing directors are - if you are named on this document then you would be expected to be for example the signatory against a bank account and the signatory for tax returns, social insurance payments, etc.

In this case, certainly in my area, Labour would insist on a WP and sometimes even that a description is entered into the WP that one is able to sign company documents.

Other, occasional signatures should be ok as these can be legally made when you are out of country.

As has been pointed out, if you are a signing director who is actively involved in the day to day running of a company, then one's holding a WP is expected by Labour.

Sorry, not correct.

Any director that can bind the company can do so whether they are Thai, foreign or Martian and whether they have a work permit, a non-immigrant visa or they're an overstayer. That they may or may not be deemed to be working illegally has no bearing on that. And where that director is physically located when they sign has no bearing on that either.

By whom are you "expected to be for example the signatory against a bank account and the signatory for tax returns, social insurance payments, etc."? Not the DBD and not the Labour Department anyway.

If you are not working in Thailand, how can the Labour department insist you have a WP? How would they even know you exist?

This thread is about whether a WP is required to be a signing director of Thai Company, not as to who can be the signatory (any juristic person) - two completely different things.

If you are named on the Company Papers as a signing director, you might be surprised as to how many times government and other commercial organisations will insist that you are the one who actually signs.

If you are signing company documents like, for example, PND1 Salary Tax Returns, Labour can deem that to be working in Thailand, that is only, of course, if you are in Thailand; but if you weren't it would be a bit of a strange thing to do wouldn't it?

[Time Traveller]

I suspect the answer comes down to, are they living in thailand year round or not. ....There is a case for not needing a work permit in certain circumstances. For example, I once worked at a thai company that had a couple of foreign directors. They spent virtually the whole year outside of thailand and only visited thailand for a couple of days when important board meetings were held. These guys didn't have work permits and I have no idea if they did sign anything or not.

But if they were physically outside of Thailand whenever document signing took place, then there is no reason that they would need work permits.

[flyingdoc]

I agree with Time Traveller! In my case, the Thai company was formed explicitly to manufacture new and innovative medical supplements used in Anti-aging Medicine (AAM) and certain cancer and terminal cancer treatments, but only in the U.K. which are then exported all over the world from the U.K. Although

monies received are then remitted to BKK, no actual work takes place in Thailand, therefore I would contend that no WP is needed?