Integrity Legal

Work Permits are always an important issue for foreign nationals living in Thailand. Under Thai law, the right to work is bifurcated from the right to remain in the Kingdom. Therefore, many find that it can be easy to be lawfully admitted to Thailand on a validly issued Thai visa and remain for relatively long periods of time, but it can be difficult to obtain work authorization in the form of a Thai work permit. One of the reasons for this difficulty is that the Thai Foreign Business Act restricts the types of activities that foreign nationals are allowed to engage in while present in Thailand. In many ways, Thailand has maintained protectionist measures in order to insulate the Thai labor force from some of the detrimental side effects of globalization.

Recently, it was announced that the government would be easing some of the restrictions in the Thai Foreign Business Act. At the same time, the Thai government has also announced that the rules still on the books would become the subject of more stringent enforcement. This leads us back to the issue of work permits. It would appear that the government is preparing to allow foreign companies to engage in certain previously restricted activities, but the upshot of this is that the rules and regulations regarding activities that are still restricted will be enforced more diligently than before.  To quote a recent posting on Thaivisa.com from the British Chamber of Commerce in Thailand Magazine:

“Unfortunately, the Labour Department has revised Work Permit regulations and a new list of the types of work foreigners are allowed to conduct will be issued by February 2010 at the latest. According to the current draft of the Ministerial Regulation, the new rules and practice will impact on current work permits (when they are extended) and also new work permits. [...] Despite the position of all foreign Chambers that liberalisation and streamlining of visa and work permit regulations would be advantageous for attracting and retaining much needed foreign investment, certain ministries appear to have taken the opposite view.”

It would appear that the Thai Ministry of Labour is taking a rather tough stance with regard to the enforcement of work permit regulations.

Although it is quite common to see such attitudes in difficult economic times, this author cannot help but wonder if this is the best course of action for the overall Thai economy. Small and medium sized businesses owned or managed by foreign nationals will likely be the most adversely impacted by this new policy and there is strong evidence that such enterprises act as the driving force for the economy-at-large. In these tough economic times, attracting foreign skilled labour and investment may be better than promulgating rules that make working in Thailand more difficult.

Tags: employment authorization Thailand, Thai Foreign Business Act, Thai Visa, Thai Work Permit, Thailand Foreign Business Act, Thailand Visa, Thailand Work Permit, work in Thailand, work permit in Thailand, work permit Thailand
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Thailand can be a difficult business market for some foreign firms to enter due to the many restrictions placed upon foreigners who operate in the Kingdom.The Foreign Business Act precludes foreigners from engaging in many business activities. However, over the past decade there have been repeated attempts to amend the Foreign Business Act. These attempts have been made for a variety of reasons. Some have hoped to liberalize the Thai market while others have tried to make the regulations more restrictive. In either case, these attempts have been just that because very few have been able to push through legislation to modify the law.

Recently the website Thaivisa.com in conjunction with The Nation Newspaper are reporting that changes may be coming for the Thai Foreign Business Act. To quote from Thaivisa.com:

“The planned liberalisation of certain business sectors currently limited to Thai firms will be accompanied by the imposition of more stringent restrictions on foreign-owned businesses operating in the Kingdom if a series of proposals by the Commerce Ministry are accepted by economic ministers. Under the ministry’s proposed amendments to the Foreign Business Act (FBA), voting rights of foreign shareholders will be more tightly controlled…In an effort to boost foreign investment, the government is considering removing some industries from the FBA’s Annex III, which lists industries that are off-limits to non-Thais. Annex III businesses that might be opened up include tour guide operators; trading in agricultural futures; stock trading; derivatives trading; commercial banking; insurance and assurance; pawnshop operators; warehousing; schools; and credit fonciers [sic]. ‘The amendments should create clear regulations for controlling each type of business. It should make the environment friendlier for foreign investors and streamline business regulations. However, it may affect some Thai businesses that are not competitive with foreign firms,” said a senior Commerce Industry source.’”

Although all of the implications of these proposed changes have not yet been deciphered it is clear that these changes will have a dramatic impact upon the foreign business community in Thailand.

This amendment may also come with new restrictions for some types of companies in Thailand:

“The proposed removal of some businesses from Annex III has prompted a concurrent proposal to impose stringent controls on the voting rights of foreign shareholder, which must not be higher than 50 per cent. The amended regulations would only apply to new foreign-owned companies.”

Some corporate structures in Thailand provide disproportionate voting rights for certain shareholders. If approved, this amendment would likely mean the end of disproportionate corporate voting rights. This section of the proposed amendment will probably not be warmly greeted by the foreign business community in Thailand. As it states above, in its current form, this legislation should not affect the operation of a Thai Company that is currently in existence, but the final draft of this legislation could be very different from what is being debated at this time.

Tags: Foreign Business Act Thailand, Foreign Business Thailand, Foreign Company Thailand, Thai Business, Thai Company, Thailand Business, Thailand Business Law, Thailand company, Thailand Foreign Business Act
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