EMPLOYER OF RECORD & PAYROLL SOLUTIONS
YOUR ULTIMATE GUIDE TO:
EMPLOYER OF RECORD & PAYROLL SOLUTIONS
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Your Ultimate Guide to Employer of Record & Payroll Solutions in Thailand.
Looking for a great economic market to expand into?
Thailand is a vibrant country with an emerging economy and very low unemployment.
The industrial and service sectors are both popular, with the former playing a large role in Thailand’s burgeoning exports, while the latter revolves around tourism and finance. Around half of the country’s population works in agriculture.
As a whole, Thailand’s economy has been growing steadily since the mid-1990s, and this pattern looks to continue over the coming decades.
Are you looking to expand into new markets? If Thailand is a consideration, it is important to understand the various options that are available for you.
Take a look at your complete guide to Employer of Record and Payroll solutions in Thailand.
How to Register Your Business in Thailand
Before you start recruiting staff in Thailand, it’s necessary to register your business properly with the government.
- Choose your company structure, either a Thai Partnership or a Thai Limited Company. A Private Thai Limited Company is the most popular choice, and it’s a company with three or more owners whose day-to-day duties are limited because directors run the company.
- Reserve your company name with the Department of Business Development (DBD) website within the Ministry of Commerce.
- File a Memorandum of Association with the Ministry of Commerce, which includes names of the shareholders, name of the company, company objectives, and the shares that each owner holds.
- Hold a statutory meeting. This meeting outlines the by-laws of the company, notes who receives shares and at what amount, and the appointment of directors and auditors of the company.
- Register your company with the Ministry of Commerce within 90 days of holding the statutory meeting.
- Register for a value-added tax and income tax to obtain a company tax ID card within 60 days of incorporating.
If you aren’t a lawyer or international business attorney, it’s important to hire a firm that understands Thai law when it comes to business registration and incorporation. This is one of the many steps that Aster Lion can assist with to ensure you are able to set up and be fully compliant.
Work Visas for Foreign Employees Working in Thailand
If you’re an SME or multinational company looking to have a base of operations in Thailand, you’ll need to set up the proper work permits and visas.
You’ll need advice on the type of visa required, how to deal with immigration services when workers come to Thailand, including work permit applications, employment passes and dependent passes. Your foreign workers must have the right entry, renewal, and exit paperwork filed with government agencies.
The ratio of Thai to foreign workers must be at least 4-to-1 or greater. So for every five employees at your company, just one can be a non-Thai citizen. Keep this in mind when your company applies for work visas for staff.
Further, you can only hire a non-Thai citizen when you prove that a Thai citizen cannot do the work you require.
Finding a job in Thailand as a foreigner faces other challenges. First, each prospective employee needs a non-resident visa before they can even begin looking for work. Then, once they’ve found a job, the employer has to apply for a work permit for that person.
This takes time and money. Hiring a business that specializes in Employer of Record (EOR) services for foreign companies looking to do business in Thailand gives you leverage to shorten timeframes and know exactly what costs you’ll incur for hiring foreign workers.
Applying for Work Visas in Thailand
Potential workers and business owners must begin applying for visas through the Thai consulate or embassy in their home country. Thailand has five different visas, depending on the type of work an employee will be performing in the country.
Most workers require a Non-Immigrant Category B visa to work in Thailand.
Before you apply for a work visa, gather these documents:
- A passport valid for at least another 6 months. It must have a minimum of two blank pages. One-year work visa applications require you to have another 18 months’ validity on a passport.
- A signed and dated Thai work visa application form.
- A passport-sized picture taken in the last six months with a white background, your face entirely visible, and a neutral facial expression.
- Proof of sufficient financial means to pay for your entire stay, which means 20,000 baht for solo travelers ($650) and 40,000 ($1,300) for a family for three months.
- Official police clearance certificate.
- A Letter of Approval from the Thailand Ministry of Labor. A Thai employer must apply for this at the Office of Foreign Workers Administration in the Department of Employment.
The process of getting a work visa is as follows:
- Make an appointment with the Thailand embassy or consulate in your country. Ask about how you must pay for the visa fee and whether you can apply in-person or online.
- Prepare your visa documents as outlined above.
- Submit your visa application and documents through the consulate. If you’re mailing forms to the consulate, include a self-addressed stamped envelope.
- Pay for the visa fees, which may vary slightly from country to country.
- Processing times are anywhere from 2 to 10 days.
Non-immigrant work visas last up to three months in Thailand. You’ll need to enter Thailand before it expires to apply for your work permit.
Once you have secured the proper Thai visa, you can apply for a work permit (different from a work visa) in Thailand through the Department of Employment.
Applying for Work Permits in Thailand
Both the company and its employees must apply for work permits in Thailand. Workers need to arrive in the country first before applying for a work permit.
Requirements and Documentation for Companies
- Registered to trade in Thailand
- Cannot exceed 10 work permits
- 2 million Baht in capital or 1 million if the employee is married to a Thai national
Employers must provide the Thai embassy with these documents in Thai or English:
- Employment agreement
- Letter of employment with position, salary, job requirements, and contract duration
- Current financial statement
- Company Registration Department Certificate
- VAT certificate and proof of VAT filings
- Company withholding tax
- Physical address of the main office
- List of company shareholders
- Signed copy of the company director’s passport and work permit
Worker Requirements and Documentation Needed
Employees also must meet certain standards when applying for work permits in Thailand.
- Bachelor’s degree
- Work experience in the job you intend to work in.
- Job offer from a Thai-based company
- One job per permit
- Must be a job a foreigner can do legally in Thailand
Documents needed include:
- Six 2-inch by 2-inch passport photos
- A valid medical certificate current within the last 30 days
- Original passport
- Signed copy of a non-Thai immigrant work visa
- Departure card TM.6
- Signed letter of employment
- Signed copy of your certificate of education
- Proof of current address in Thailand
Workers must submit these documents with the Ministry of Labor in Bangkok or the Department of Employment in the area where they work.
The process takes about seven days to complete.
EOR Services in Thailand Can Help
A company that specializes in Employment of Record services in Thailand can help with this entire process.
Benefits of an Employer of Record include:
- Familiarity with Thai law
- Knowing what forms companies and employees must complete
- Understanding the process of obtaining work visas and permits
- Drafting of employment contracts in accordance with local labor laws
- Ensuring the process is fully compliant with Thai labor law
Basic Thai Labor Laws to Understand
While incorporating your business, it’s important to understand some basic Thai labor laws.
There is no unemployment insurance in Thailand, which is part of the reason why the unemployment rate is amazingly low. Employment law in Thailand does have some marked differences from other countries.
You must pay for 45 days of maternity leave for pregnant mothers. Mothers are entitled to take up 98 days of maternity leave.
There are 13 paid public holidays each year. Thai New Year, every April, is a three-day holiday, meaning you must pay each employee for 15 paid holidays annually.
Every employee has the right to severance pay if you terminate their employment. Exceptions include if the employee neglects their job duties, fails to show up for work, or disobeys work rules, among others. Employees who have worked 4 to 12 months receive 30 days’ severance pay. After a year, that amount goes up.
After working for your company for a year, employees get six days of paid leave.
These are just the basics. Thai labor law has many complexities, nuances, and eccentricities you must follow. If you are unfamiliar with Thai labor law and you don’t understand it, your company may face challenges. This is why many companies rely on Employer of Record experts to help them navigate through the processes and ensure they are up and running in a fully compliant manner.
Payroll in Thailand
Much like labor laws, when it comes to Thailand payroll, company payroll and taxes in Thailand come with certain stipulations and regulations you must follow.
Employers in Thailand must withhold income tax, employee payroll tax, and social security contributions from their pay before submitting it to the Thailand Revenue Department.
Income tax rates in Thailand range from 0% for lowest-earning employees up to 35% for workers earning more than earning more than 4 million Thailand baht
Social security contributions for employer and employee amount to 5% of salaries, topping out at 750 Thailand baht per month.
You must issue pay slips for each pay period, either online or on paper, for every employee so they know how much was deducted from their gross pay.
Your company is under obligation to maintain payroll records for at least 7 years.
Payroll outsourcing in Thailand is legal, and it’s a great way to save your company money by handling mundane payroll services and ensuring that you fully comply with Thai law.
Benefits of payroll services in Thailand include:
- Thailand payroll calculation
- Submitting regular payroll tax forms every month
- Payroll for temporary and contract staff for local and foreign employees
- Payroll set-up and administration
- Covering all administrative and statutory requirements
- Regulatory compliance with local labor laws
How Hiring a Professional Employer of Record Partner Can Help
A professional Employer of Record (EOR provider) can help your firm fulfill your Thailand staffing requirements and you can save money, paperwork, labor costs, and legal troubles by working with a firm that specializes in Thailand EOR & payroll solutions.
These specialized firms already know and comply with Thai employment law, whether you need a local labor force supplemented by in-person or remote workers, or you just need assistance paying your employees properly.
How Aster Lion Can Help
Reach out to our team for a free consultation to understand the requirements and steps involved in getting you set up and running a business in Thailand.
We’ll help you navigate through the entire process to ensure you’re up and running with the least amount of steps. You can reach us directly on email@example.com or enter your details below and someone from our team will reach out.
Aster Lion is an Employer of Record based in Thailand providing the following services:
- Corporate Secretary
- Visa & Work Permits
- HR & Payroll Solutions
Let us know how we can help you!