Integrity Legal

In Thailand, a major concern for expatriates, tourists, and permanent residents is banking. Many people need to set up Thai bank accounts in order to transact personal business in the Kingdom or for international financial purposes. Unfortunately, like many things in Thailand, setting up a Thai bank account can be somewhat difficult, especially for a new arrival trying to establish themselves. In Thailand, each financial institution has its own unique set of rules and regulations imposed upon those who wish to set up an account. Compounding this byzantine situation is the fact that rules and requirements depend upon the type of account one wishes to set up. Business accounts, Foreign Currency accounts, personal savings accounts, and checking accounts all have differing documentation requirements.

For those entering the Kingdom on a Thai visa exemption, opening a bank account in Thailand may prove difficult as many banks are now requiring that an applicant have at least a long term non-immigrant Thailand visa. Some banks take their due diligence efforts one step further and require that a prospective account holder provide a Thai work permit. The practice of requiring a Thai work permit seems to have become a common requirement for nearly all Thai banks in recent months.

There are others who wish to set up Thai corporate bank accounts in the Kingdom, these people are often either the Managing Director of a Thai company or they are thinking of setting up a Thai company. In either case, a great deal of documentation must be submitted in order to obtain a Thai bank account for a Thai corporation. Even where a corporate account can be established, a personal savings account may be necessary if one wishes to have a debit card. As a general rule in Thailand, banks will not issue debit cards for corporate checking accounts. Credit Cards are also notoriously difficult to obtain for corporations as well as individuals who are not Thai Citizens. It is possible to obtain a Thai Credit card, but in many cases the requirements are extremely stringent.

An issue ancillary to Thai banking is Thai mortgages. Obtaining a Thai mortgage can be very difficult for a foreigner. For those wishing to buy a Thai condo it must be remembered that funds for purchase must be brought into the Kingdom from abroad. How this requirement interacts with issues surrounding the Thai mortgage likely is dependent upon the unique facts of the situation.

Tags: Thai Bank Account, Thai Banking, Thai Company, Thai Condo, Thai Credit Card, Thai Mortgage, Thai Visa, Thai Work Permit, Thailand Bank Account, Thailand Banking, Thailand company, Thailand Credit Card, Thailand Visa
Posted in General Legal Information, Legal Opinion, Miscellaneous, Thailand Business, Thailand Property, Thailand Real Estate | No Comments »

There are many expatriates living in the Kingdom of Thailand who opt to run their own business(es). In cases where the expat is not married to a Thai national, then it is highly likely that a Thai business visa will be used in order to remain in the Kingdom long term. A somewhat tongue-in-cheek question that often arises in the context of Thai business is: why do I need to pay my taxes? Although no one actually expects to be granted some sort of tax amnesty, the fact remains that no one really relishes paying taxes. It can be even more difficult when one takes into account the fact that Thailand is predominantly a cash based economy. However, for expats basing their visa status upon small business ownership in the Kingdom, visas and taxes are inexorably linked.

Each year, each and every limited company in Thailand must submit an up-to-date balance sheet reflecting the profits and losses for the previous fiscal year. The managing director of a Thai limited company can do themselves a great disservice by failing to submit a yearly balance sheet as this can be punishable by strict sanctions and fines. Thailand, like many nations, imposes a corporate tax upon nearly all legal entities operating within the jurisdiction of the Kingdom of Thailand.  Further a corporate witholding tax is required for certain transactions.

In Thailand, the most well known method of taxation is the Value Added Tax (aka VAT). The government places a value added tax of seven percent upon most goods and services. The consequences for a business that fails to pay these taxes can be severe.

The reader is likely asking themselves: “Ok, I understand, Thailand has taxes, but how does this effect my Thai visa?” One of the major concerns of Thai Immigration officers is that those present in the Kingdom of Thailand on a business visa will use a “shell company,” in order to maintain Business visa status. In order to forestall such chicanery, Thai Immigration routinely looks at the tax records of companies that employ foreigners. This mostly occurs when the foreign national attempts to obtain a visa extension or a visa extension renewal. This type of scrutiny can also occur at the Ministry of Labour when a foreigner submits an application for an extension of his or her Thai work permit. In cases such as this, it is always better to have a good record of tax payment as this can greatly facilitate the quick issuance of a Thai visa or work permit.

Tags: Thai VAT, Thai Visa, Thai Visa Extension, Thailand Immigration, Thailand taxes, Thailand VAT, Thailand Visa, Thailand Work Permit, VAT
Posted in General Legal Information, Legal Opinion, Miscellaneous, Thailand Business, Thailand Visa | No Comments »

It is interesting to discuss recent changes in Thai Immigration rules with the so-called “old timers” or “old Thailand hands” because they can remember far simpler times when Thai Immigration rules were far less byzantine and self-contradictory. That being said, Thailand was also a far less hospitable place in the past and a by-product of Thailand’s overall economic expansion has been a tightening of Thai Immigration regulations.

At one time, immediately following the second world war any entrant into the Kingdom was immediately accorded immigrant status which today would be known as Thai Permanent Residence. Although not Thai Citizens, Immigrant in the Kingdom were accorded a great many legal rights and privileges.

As time passed, a new immigration category was added: Non-immigrant. This category was initially intended for obvious tourists and other persons present in the Kingdom with non-immigrant intent. At this point it was still relatively easy to acquire permanent resident status in the Kingdom of Thailand. A visa holder classified as non-immigrant could generally convert their visa to the immigrant visa category within a few weeks and legally take up permanent residence (a process called adjustment of status in present USA visa parlance).

In the early to middle nineteen seventies, the sub-stratification of the non-immigrant visa category began. Within the non-immigrant visa category, the entrant was deemed to be in the Kingdom for a certain purpose. As a result there were Thai tourist visas, Thai business visas, Thai O visas, etc. Also, at this time, Thai Permanent Residence became extremely difficult to obtain when compared to the ease with which it could have been acquired in the past. Quotas were set regarding the number of applications that would be accepted for applicants of differing nationality.  An applicant was also required to remain in the Kingdom for at least three consecutive legally unbroken years before an application for residence would be accepted.

It is also interesting to hear about times past because the Thai work permit was originally not an issue. For a long time, it was not necessary for a foreign national in Thailand to obtain a work permit in order to be employed in the Kingdom. In the nineteen seventies, this situation changed and any non-Thai national was compelled to acquire a work permit to be employed in Thailand. Originally, many people were granted lifetime work permits. In other cases, the work permit itself had to be renewed but the particulars of the permit were not reviewable. This meant that although one had to maintain the necessary fees, the Ministry of Labour could not cancel the permit for any reason other than failure to pay the administrative fee. All of this is very different than the system today where Thai work permits are constantly renewable and visa regulations seem to change with the wind.

Tags: Thai Business Visa, Thai O Visa, Thai permanent residence, Thai Work Permit, Thailand Business Visa, Thailand Permanent Residence, Thailand Visa, Thailand Work Permit
Posted in Legal Opinion, Miscellaneous, Thailand Business, Thailand Visa, Weird Law | No Comments »

For those present in Thailand on a Thai business visa, or another type of Thai visa (except for the F visa), it is incumbent upon the foreigner to obtain a Thai work permit if he or she wishes to take up employment in the Kingdom of Thailand. That being said, Thai work permits are generally only granted with a one year validity. There are exceptional instances where this is not the case. For example, BOI companies can get work permits for their employees that have a validity of two years. In any case, if a foreign national has a work permit in Thailand and wishes to work past the permit’s initial validity, he or she will need to obtain a Thai work permit extension.

A Thai work permit extension is somewhat similar to a Thai visa extension. In both cases, the original document is issued with a short term validity (usually one year, although work permits can be issued for three, six, nine, or twelve months at the individual officer’s discretion). After the permit expires the foreigner will no longer be legally entitled to work in the Kingdom.

In order to obtain a work permit extension, the foreign national must submit an extension application to the Thai Ministry of Labour. Depending upon the makeup and details of the Thai company, it may be possible to submit a work permit extension application to the One Stop Service Center. Upon application approval the work permit will be extended according to the duration approved by the officer.

At each application for extension, the underlying employment will be reexamined to ensure the employment falls in line with the relevant provisions of the Thai foreign business act, the US-Thai Treaty of Amity, and the Thai Civil and Commercial code. There are many protective measures in Thailand which restrict foreigners from certain occupations. Accordingly, non-Thais are not allowed to conduct certain types of activity. Therefore, one must be careful when deciding upon the duties to be undertaken in any type of employment in order to make sure that none of the activities in the work permit are restricted under Thai law. Since work permits must constantly be extended, there is always a possibility that one officer will consider a foreigner’s occupation to be in accordance with Thai law, while another officer will consider the same activity to be in contravention of applicable employment regulations.

Working in Thailand is a daunting proposition for some as the bureaucracy can seem overwhelming. However, it is always a good idea to make sure that one is legally employed in the Kingdom as unlawful employment could lead to civil, criminal, and immigration sanctions. It should also be noted that the Ministry of Labour has proposed an increase in work permit fees. When the fee increase will take effect is still unknown at the time of this writing.

Tags: BOI Company, Thai Business Visa, Thai Visa, Thai Work Permit, Thailand Business Visa, Thailand Visa, Thailand Work Permit, Treaty of Amity
Posted in General Legal Information, Legal Opinion, Miscellaneous, Thailand Business, Thailand Visa | No Comments »

The Bangkok Post is reporting that the World Bank has released a new report regarding the ease of doing business throughout the world. According to the report, Thailand achieved an overall rank of 12 when compared against other countries.

The Bangkok Post was quoted as saying:

“Thailand ranked relatively well in terms of property registration, trade, investor protection and ease in dealing with construction permits… Kirida Bhaopichitr, senior country economist for the World Bank in Bangkok, said Thailand benefited from improvements in the time and procedures needed to register a business and reduced bureaucracy in customs clearance.”

One of the major benefits to those doing business in the Kingdom of Thailand is the improved registration process for setting up a Thai company. At one time, the process of registering a Thai company was extremely time consuming and also required the seven shareholders.

Recently, the corporate laws have been changed to allow companies to have a minimum of three shareholders. If correctly executed, the company registration process can now be completed in as little as one day.

One slightly misleading aspect of this article concerns Thai property registration. Although it is true that Thai property can be registered relatively easily, the article does not go on to mention the fact that foreign nationals are virtually barred from owning land in the Kingdom of Thailand. In theory, it is possible for foreign nationals to own land in Thailand, but they must have the transaction signed off by the Minister of the Interior. Obtaining this signature is considered nearly impossible in some cases.

The Bangkok Post article also said, “Penelope Brook, acting vice-president for financial and private sector development at the World Bank, said Thailand could do more to improve areas such as transparency and investor protection.” There is some truth to this criticism as regulation of Thai investments is enforced less strenuously than in other countries. However, the Thai economy is often more transparent than many countries. That being said, one of the main reasons many people consider it non-transparent is due to the fact that the Thai method of doing business is very different from that of the West. Therefore, a result of these differences is that the economy is viewed as less transparent when the real issue is probably one of culture clash.

This article only dealt with the economic sphere and did not really deal with the political front. That being said, business and politics will always have an impact upon each other.

Tags: Thai Company, Thailand Business, Thailand Property Registration
Posted in Thailand Business, Thailand Property, Thailand Real Estate | 2 Comments »

Apparently the Thai government officials in Phuket are actively investigating companies that might be using Thai nominees in order to conduct otherwise restricted activities in Thailand.  To quote the Nation via Thaivisa.com:

“A fact-finding effort is underway in Phuket to compile information about local businesses in which Thai people are hired by foreigners as their nominees – a practice considered suspicious and possibly illegal.”

The major concern seems centered around use of Thai nominees to own Thai property. Thailand has imposed many legal restrictions on foreign ownership of Thai property. Many are under the mistaken idea that foreigners are completely barred from owning land in the Kingdom of Thailand. This is in fact not true as foreigners can own land, but they need Ministry of Interior approval and this approval is virtually impossible to obtain except in limited cases involving inheritance.

The above quoted article doesn’t really mention anything new regarding the attitude of Thai authorities, but instead seems to mark a change in attitude regarding the use of nominee shareholders. Although nominee shareholders are expressly prohibited under Thai law, it is difficult to ascertain exactly what constitutes a “nominee.” Basically, a passive shareholder could be considered a nominee, but the term would be inaccurate because the supposed nominee has a vested interest in the company and is not holding shares for anyone else. The real poison pill comes down to land. Where a company is being used to own Thai real estate the issue of nominee shareholders is a major one that will likely be heavily scrutinized by Thai authorities. That being said, a Thai company that owns property is not illegal as a Thai company is not barred from owning land in Thailand. This being said, the Thai land department is taking a very tough stand regarding the use of nominees:

“The provincial land office said legal action would be taken against any businesses found to have been operated illegally with a majority of foreign ownership, because Thai land laws imposed strict sanctions on foreigners owning land plots in Thailand.”

For those who wish to own property in Thailand, it may be best to obtain a Foreign Freehold Title to a Thai Condo rather than attempting to circumvent land department regulations. At the present time, it would appear that Thai authorities are stringently enforcing the land laws and foreigners in Thailand should be prepared to deal with increased scrutiny. Strict observance of the law may be the best method of ensuring the least amount of difficulty.

Tags: Thailand Business, Thailand Legal News, Thailand Property Law, Thailand Real Estate Law
Posted in General Legal Information, Legal Opinion, Miscellaneous, Thailand Business, Thailand Property, Thailand Real Estate | No Comments »

Speculation abounds as rumors circulate about possible price increases for Thai work permits. A common misunderstanding regarding Thai law is that the right to work is built into a foreigner’s Thai visa. This misconception is particularly acute with regard to the Thailand Business Visa. It is easy to believe that a business visa would entitle the holder to work in the country, but in Thailand, as in the United States on a B1 visa, foreign nationals are only allowed to work after obtaining Thai Ministry of Labour approval in the form of a Thai work permit.

The Nation, in conjunction with Thaivisa.com is reporting on the matter, to quote their report:

“The Phuket Gazette has learned that recent rumors of substantial increases in work permit fees may be well-founded. Discussions are underway in the Department of Employment that could once again lead to massive hikes in these annual fees.”

This situation appears quite alarming to expats in Thailand because within recent memory another dramatic fee increase caused consternation due to the enormity of the difference in cost before and after the fee increase took effect. To quote further from the Thaivisa.com website:

“The last hike in work permit fees occurred in September 2002, delivering an impressive 200% hike, an event that triggered lively and colorful comments on ThaiVisa.Com, host to Thailand’s largest English-language Web forum. Some recent comments in that forum, albeit from sources undisclosed and/or unofficial, foreshadow this month’s hike as likely to be something well over 100%.”

Six thousand Thai baht is only roughly equivalent to approximately two hundred United States dollars and compared to the Immigration system in the United States, United Kingdom, or many countries in the European Union the fees are relatively low when one takes into account the fact that the bearer of a work permit is given the right to work in a foreign country. Even keeping these factors in mind, an increase of one hundred percent is still considerable and substantial, particularly for the small Thai business employing foreigners or for the expat living in Thailand and running a small business.

One explanation for this fee increase could be economic. Although not as hard hit by the worldwide economic crisis, Thailand still has had flat numbers in tourism and the economy is sagging. Further compounding the problem is the prospect of another less-than-optimal high season and the specter of new demonstrations causing foreign investment to flee in search of economies with more stable government. These factors could explain why this fee increase is being brought forward at this time as protectionist attitudes and the need for government revenues increases. It is uncertain if or when the fee increase will occur, but one thing is certain: some foreigners will always want to work in Thailand and they will probably always have to pay some sort of government fee for the privilege.

Tags: B1 visa, Thai Visa, Thai Work Permit, Thailand Business Visa, Thailand Immigration, Thailand Work Permit, Thailand Work Permit fee
Posted in Legal Opinion, Miscellaneous, Thailand Business, Thailand Visa, Upcoming Legislation | No Comments »

The popular Website Thaivisa.com and the Nation Newspaper are reporting on the news that There is a planned expansion of Thailand’s current international airport. To quote the article:

“Airports of Thailand plans to build a domestic passenger terminal at Suvarnabhumi Airport while inviting the private sector to invest in six projects at the old Don Mueang Airport. Construction of the new terminal will start in 2012 for completion in 2015, to accommodate an additional 20 million passengers a year.”

A question upon the lips of many who read this blog is likely: “What about Getting a Reentry Permit at the airport?” Although these two subjects seem only tenuously related, they may in fact be more related than it appears at first glance.

Up until January 1, 2009 it was possible for long term residents of Thailand to obtain a Reentry Permit at the airport. This is an important stamp to obtain for those present in the Kingdom on a Thai visa extension. When one enters the country on a Thai visa, the visa has a set validity. However, it is possible to have one’s visa extended past the visa’s initial validity. Once obtained this instrument is known as a visa extension. However, the extension does not explicitly permit the bearer to leave the country and return while simultaneously remaining in status. Therefore, it may be necessary to acquire a Reentry permit so that one may leave the Kingdom and return while maintaining the same visa status.

There used to be a Royal Thai Immigration Office at Suvarnabhumi Airport that issued Reentry permits to travelers immediately before they left the country. As could be reasonably assumed, this office was very convenient for those leaving Thailand and wishing to return in status. However, for some unknown reason, this office was closed and currently it is not possible to get a Royal Thai Immigration extension issued at the airport. Those wishing to get a reentry permit must do so at another Thai Immigration office.

Hopefully, with the addition of a new terminal, the increased space at the airport may make it possible to reopen an Immigration office in order to facilitate the issuance of reentry permits. This being said, there appears to be no plan in place for opening any new Immigration offices at the airport.

It should be reiterated that anyone staying in Thailand on a visa extension should obtain a reentry permit before they depart from the Kingdom in order to forestall falling out of lawful visa status upon departure. Those present in the Kingdom on a multiple entry visa can depart and return to the Kingdom until the end of their visa’s validity.

For related information please see Thailand business visa

Tags: Reentry Permit, Thai Visa, Thai Visa Extension, Thailand Business Visa, Thailand Immigration, Thailand Visa
Posted in Thailand Business | No Comments »

In recent news the Thailand property market has been placed under increased scrutiny for fear that foreigners are using Thai companies as a way of owning land and thereby circumventing the de facto prohibition placed upon non-Thai citizens seeking to buy Thai real estate. In some cases, the Thai government authorities are forcing companies which are not in compliance to sell their Thai property.

In a recent edition of the Bangkok Post, the aforementioned phenomenon was reported on at length:

“If the investigation [by the land department] reveals that the firm holding the land have an illegal shareholding structure, the Lands Department will ask it to transfer the plots within 180 to 365 days.Recently, the Lands Department found a company in Phuket whose foreign ownership exceeded the legal limit. The firm had formerly registered with a legal ownership – with foreigners holding a 49% stake and Thais the balance. However, it later increased its capital, with foreign nationals taking up all new shares, making it ineligible to own land. After the department learned about this case, it took action to have the firm transfer the land it owned.”

The situation described above is the classic case of a scenario in which those operating the Thai company opted for the expedient route without making certain that the legalities were respected. There are ways in which Thai companies can own land, but they must be carefully structured in order to comport to the laws of the Kingdom of Thailand. That being said, one should not try to set up any type of corporate device purely for the purpose of getting around the laws of the Kingdom of Thailand.

It remains to be seen whether this increased scrutiny will continue, but those wishing to acquire property in Thailand ought to be aware that there are other perfectly legal methods of acquiring interest in Thai real estate. Long term Thailand leases can be a benefit to those wishing to acquire a leasehold. For those who insist upon obtaining a freehold title to a piece of Thai property, foreigners are entitled to take freehold title to a Thai condo. However, there have been regulations passed recently which place more restrictive legal definitions upon what is considered a “condo.”

There is also a very specialized property instrument known as a usufruct, which allows the usufructuary to hold a lifetime usage right in the structures located upon a designated piece of property. Some people opt to split the title to a house from the title to the land. This can be very difficult, but has been done when executed by professionals.

Tags: Thai Condo, Thai Lease, Thai Nominee Shareholders, Thai usufruct, Thailand Property, Thailand Real Estate
Posted in General Legal Information, Legal Opinion, Miscellaneous, Thailand Business, Thailand Property, Thailand Real Estate | No Comments »

For those who opt to take up an expatriate lifestyle the issue of Thai visa status can be a crucial one. One’s Thai visa status is determined by the category of visa that is initially issued. Therefore, if a Thai consulate outside of the Kingdom of Thailand issues an applicant a Thailand Business visa, then that entrant’s visa category, and therefore status, is “B.”

In cases where a foreigner wishes to remain in Thailand in order to pursue legitimate educational objectives, then a Thai ED Visa is the category used to remain present in the Kingdom. For “miscellaneous” purposes and for reasons related to filial kinship, the O visa category is the proper Thai visa to acquire. Depending upon the reason for Thailand O Visa issuance, a Thai work permit may or may not be easily obtainable.

The ability to file for a Thai work permit depends heavily upon one’s status in the Kingdom. For instance, the holder of a Thai Education visa generally cannot obtain a Thai work permit. A situation such as this is one where change of status comes into play. A foreigner in possession of a Thai education visa will need to switch to another category in order to apply for a Thai work permit. An interesting corollary to this notion is the Thai F visa category which is a visa for official or quasi-official purposes (this is different from the US F visa, which is an education visa). Those who hold an “F” category Thai visa do not need to obtain a Thai work permit in order to work in the Kingdom because the right to work is inherent in the visa itself.

Visa status conversion can be a somewhat difficult process within the Kingdom. There is always the option of going abroad, obtaining a new visa, and reentering under a different immigration classification, but for those who do not wish to leave the country, this option may be unacceptable.

When changing categories in the Kingdom, the general rule is that the applicant for change of status must have at least 21 days of validity left on their current Thai immigration stamp. Changing status from one category to another can be more difficult depending upon the original category. Generally, the Royal Thai Immigration Police do not prefer to change an applicant’s status from visa exemption to a proper category. In these situations, they prefer that the applicant depart the country, obtain a proper visa, and return for a Thai visa extension at a later date. That being said, conversion from an exemption to a visa category can be achieved, but conversion is done at the discretion of the Royal Thai immigration officer.

It should be noted that change of status is different from obtaining a Thailand visa extension. For those who enter the Kingdom on a 60 day Thai tourist visa, it may be possible to obtain an extension of the visa for thirty days at the Immigration office. However, this does not mean that the applicant has changed visa category, only that they have increased the valid period of their Tourist visa. This is the same for those who enter the Kingdom upon a business visa and opt to extend the visa to have a year’s validity. The applicant remains in “B” visa status, but the validity period is extended.

Tags: Thai Immigration, Thai Visa, Thai Work Permit, Thailand Business Visa, Thailand ED Visa, Thailand Immigration, Thailand o visa, Thailand Visa, Thailand Work Permit
Posted in Miscellaneous, Thailand Business, Thailand Visa | No Comments »