Integrity Legal

In prior postings on this blog the issues of Thai immigration law and immigration enforcement have been discussed. In a rather recent posting it was noted that Thai immigration is placing increased scrutiny upon those seeking marriage visas (officially referred to as Thai O visas) in the Kingdom. It appears that after discovery of a spate of sham marriages perpetuated in order to obtain Thai immigration benefits, Thai immigration authorities began to subject Thai marriage visa applications to more intense scrutiny. This matter apparently remains a top priority of immigration officials in Thailand as a recent article in the Bangkok Post points out that high ranking officials with the Royal Thai Immigration Police have issued new directives with respect to this issue:

Pol Lt Gen Nathathorn warned officers against dishonest acts as he listed the bureau’s action plans to screen foreigners in the country illegally…He ordered immigration officers to investigate if authorities colluded with foreigners to help enable sham marriages.

This news comes amidst the recent revelation that the so-called “border run” method of maintaining lawful immigration status in Thailand is coming to an end. In a recent posting on the Love Pattaya Thailand website it has been noted that as of August 13th 2016 the days of visa running to obtain a 15, 30, or even 60 day stamp is coming to an end. To quote directly from the aforementioned website:

The Immigration Bureau have already told the officials to refuse entry to foreigners on visa runs as a measure to stop the exploitation of tourist visas and visa exemptions to live or work here. Tourists wishing to extend their stay in Thailand must now need to exit the country and apply for a proper tourist visa

In the past, one could hope to obtain a new thirty day stamp at the airport in Thailand so long one was willing to fly out of the country and immediately get on a plane and fly back in. It appears that this is no longer feasible as so-called “fly-out/fly-in” visa runs will be discouraged following August 13th to the point where presumably such travelers will be turned away and not permitted to reenter the country without a duly issued visa from a Royal Thai Embassy or Consulate abroad.

Meanwhile, Japan just recently solidified her position as the number one tourist destination of people from Southeast Asia. Japan tops the list of most favored tourist destinations among Thai nationals. It appears that Thai tourism numbers in Japan has been on the upswing since the easing of visa rules for Thai nationals including 15 day visa free travel.

This news comes at the same time as news that Taiwan is allowing Thai tourists to travel visa free to that country starting August 1st. It will be interesting to see if this move has a positive impact upon the tourism sector in Taiwan.

In a previous posting on this blog the issue of single person incorporation of Thai companies was discussed. Back in September of 2015 it was revealed that the officials with government offices such as the Ministry of Commerce and the Department of Business Development were reviewing the possibility of amending the existing corporate laws in Thailand so as to allow an incorporated entity such as a limited company to be owned by one individual person. This would be similar to legislation in countries such as the United States which allows individuals, acting alone, to set up structures such as limited liability companies on their own.

It recently came to this blogger’s attention that some new developments have taken place with regard to this topic. To quote directly from the website of The Nation Newspaper:

THE Business Development Department has reviewed a new draft law and added in the document that a foreign individual cannot register a business in the Kingdom. The move aims to prevent |foreign enterprises from competing against Thais in many businesses that should be preserved for Thais. The original draft, known as “one person, one company,” states only that a single person can register a business in Thailand.

As readers of this blog and website may be aware there are many provisions enshrined in Thai law designed to protect Thai enterprises from foreign competition in Thailand. Most notable is the Foreign Business Act which specifically designates the type of business activities which are restricted to foreign nationals. As the website of Coconuts Bangkok noted:

This addition to the draft is designed to keep foreign businesses from competing against Thai companies in the long list of industries that the government has deemed reserved for Thai nationals only.

The aforementioned list of industries is detailed in the provisions of the Foreign Business Act. Currently, Thai law requires that a limited company have at least 3 shareholders in order to be registered pursuant to Thai law. This proposed law would change those provisions. It appears that Thailand would be the third country in the Association of Southeast Asian Nations (ASEAN) to adopt this type of change while Malaysia is apparently reviewing similar legislation.

The final draft of this proposed law remains to be seen, but it seems logical to assume that easing of corporate regulation of Thai company structures will result in increased business activity.

It should be noted that pursuant to the terms of the US-Thai Treaty of Amity, it is possible for American citizens to own virtually 100% of their companies in Thailand notwithstanding the provisions of the Foreign Business Act. It remains to be seen how these changes to the law will impact the registration of so called Amity Treaty Companies.

In recent weeks the Bangkok Post has reported on a great many changes that are currently being undertaken by officials in the Thai government. In fact, it appears that the judicial system in Thailand has been the subject of rather drastic reform in recent years. To quote directly from an article posted on the Bangkok Post official website on May 18th:

Up to 35 laws concerning judicial affairs have been amended over the past two years…Of the 35 laws amended in the past two years, 11 have come into effect, he said. They are the land transport act; the bankruptcy act, the act on prevention and suppression of terrorism financing; the the anti-money laundering act; the justice fund act; the ministerial, departmental, and divisional improvement act; the act on amendments of the Civil Procedure Code. Also on the list are the act on the procedure of suspect detentions under the 1963 and the 2016 versions of the Criminal Code…

The reforms noted above have only been implemented relatively recently so it may take some time before the effects of these measures can be readily ascertained. At the same time, measures have been put in place in an attempt to thwart transnational criminals in the form of protocol changes regarding the sharing of information regarding criminal matters arising in Thailand. It also appears that new measures have been promulgated in an effort to curb corruption. Apparently, the Public Sector Anti-Corruption Commission is poised to begin more assiduous corruption suppression initiatives.

The judiciary is not the only sector seeing reform initiatives recently. The tax authorities appear to be taking measures to make the Thai tax system more equitable, especially for those employed by Thai companies operating outside of Thailand. To quote from an article from the aforementioned website from May 23rd:

The Finance Ministry is poised to adjust the personal income tax system for Thais working abroad and foreigners who work here to create fairness and attract foreign direct investment…According to the Revenue Code, employees working for companies incorporated in Thailand are subject to personal income tax regardless of where they work…The way Thailand charges personal income tax is based on where employers have been set up rather than the source of income as in other countries…Thailand’s taxation of personal income is not fair and needs to be adjusted…

It appears that the Permanent Secretary plans to propose an amendment to the Revenue code to address the currently perceived unfairness in the Revenue Code. How such a proposed amendment will ultimately fare remains to be seen, but should the amendment be adopted it would be beneficial for some employees of corporations incorporated in Thailand.

In light of these stories it is interesting that the Deputy Prime Minister of Thailand has noted Thailand’s readiness to join the Trans-Pacific Partnership (also known as the TPP). For those unaware, the TPP is a trade agreement composed of 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam). Other nations have expressed interest in joining the TPP in recent years. To quote the Bangkok Post article on this issue from June 1st:

Mr Somkid said Prime Minister Prayut Chan-o-cha has confirmed the country’s readiness to join the TPP, and a committee chaired by Commerce Minister Apiradi Tantraporn has been set up to prepare for the move…”Thailand cannot afford to be complacent. We can take lessons from other member countries. At this point, we are ready to join the TPP. It depends on when they will accept us…”

Clearly, officials in the Thai government seem enthusiastic about the prospect of joining the TPP. However, the article goes on to note that measures are being taken to assess the ramifications of Thailand becoming a TPP member. It was also noted that Thailand would monitor the effect the TPP has had on other countries prior to making firm commitments to join the TPP. It seems likely that analysis of the experiences of Vietnam, Malaysia, and Singapore within the TPP framework will be utilized in order to better determine Thailand’s official petition to join the trade bloc and the timing thereof.

Thailand is clearly taking steps on many fronts to bring governance and regulations into line with global standards. When and how these efforts will bear fruit remains to be seen, but it is definitely an interesting time for students of Thai legal and regulatory matters.

It recently came to this blogger’s attention that those attempting to travel to the United States on the Visa Waiver Program may find themselves being denied  admission to the USA due to the fact they do not have a biometric passport (also known as an electronic passport or an e-passport). A recent posting on the official website of the United States Customs and Border Protection service notes that as of April 1, 2016 those traveling to the USA without a biometrically encoded electronic passport will be denied entry to the United States.

In most countries, electronic passports have been in wide use for some time, but some older travel documents and those issued by certain countries may not have the biometric chip. Therefore, one should look at one’s passport and use the link above to decipher whether or not one’s passport has biometric encoding and therefore complies with recently issued rules and regulations.

It should be noted that the visa waiver program requires that most travelers traveling to the USA on a waiver utilize the Electronic System for Travel Authorization (or ESTA) before they travel to the USA. In a way ESTA is a sort of pre-travel authorization although not a visa per se.

In a recently published article on CNN’s official website it was noted that based upon published data from 2015 the number of renunciations of United States Citizenship appears to be rising:

The number of citizens and long-term residents cutting their official ties to Uncle Sam jumped more than 20% last year to 4,279, according to a CNNMoney analysis of the latest government data.

First, let’s take note of a nuanced facet of this issue that the article quoted above does not delve into: Lawful Permanent Residence. The article used figures which showed the number of those renouncing U.S. Citizenship along with those surrendering their green card. These are two very different legal issues. The renunciation of one’s citizenship results in an inability to obtain a United States passport, enjoy all of the legal benefits of U.S. law, and the an inability to obtain various services at United States Embassies and Consulates abroad, to name just a few things. Lawful Permanent Residents of the USA, aka Green Card holders, presumably have an underlying nationality. Many of those who surrender their green card do so in connection with a return to their native country. The motivations behind citizenship renunciation and green card surrender are often very different.

To some, this renunciation trend is rather alarming. For those Americans who have lived abroad for a significant period of time the information above is unlikely to be a surprise. With recent changes to the laws regarding the reporting of financial information pertaining to Americans residing abroad and the fact that American citizens are supposed to pay taxes on their world wide income the recent increase in renunciations of United States Citizenship does not seem as bizarre as it may seem at first glance as the aforementioned article goes on to elucidate:

Many of those severing links are Americans living overseas who are tired of dealing with complicated tax paperwork, a headache that has worsened since new regulations came into effect…Unlike most other countries, the U.S. taxes its citizens on all income, no matter where it’s earned or where they live. For Americans living abroad, that results in a mountain of paperwork so complex that they are often forced to seek professional help…

To be clear, renunciation of United States citizenship is a very serious matter. In this blogger’s personal opinion one should not renounce one’s citizenship unless one has taken a significant period of time to seriously contemplate such an endeavor. In many cases, renunciation of US citizenship could result in new unforeseen tax liability. Meanwhile there are those who are under the impression that they must renounce their citizenship when in fact a renunciation is not required.

If one is thinking of giving up their US citizenship simply for reasons related to taxation, then prior consultation with a tax expert would be wise. Those thinking generally about renouncing their United States Citizenship should consult with a legal professional prior to making any irrevocable decisions as renunciation of one’s citizenship could have dire consequences.

In previous postings on this blog the recent policies of the Royal Thai Immigration Police regarding visa overstayers in Thailand have been noted. In follow up to those articles, it should be noted that Thai immigration officials have recorded a sharp decline in the number of people physically present in Thailand beyond the expiration date of their visa. In a recent Bangkok Post article, the drop in overstay was noted:

The more than 39% decline, from 810,522 in October last year to 486,947 in March, shows “our new measure is effective”, Immigration Bureau chief Nathathorn Prousoontorn said on Friday.

While immigration officers chalk up a victory in the campaign to thwart overstaying foreigners it appears that a new issue has come to the forefront. In another article in a more recent edition of the Bangkok Post suspicious trends in Thai Marriage registration numbers were reported:

Bureau chief Nathathorn Prousoontorn said several foreign nationals are believed to have resorted to sham marriages as a loophole to stay in the country…The [Royal Thai Immigration Police] received a tip-off from the Public Anti-Corruption Commission (PACC) that at least 150 Thai women in one district of a northeastern province had married foreigners in the past few months.

Clearly, the recent spike in marriages and the recent change in immigration overstay policy cannot be assumed to be coincidental. However, the upshot of these developments is the very strong probability that all upcoming Thai marriage visa applications (otherwise referred to as O visa applications) will be more heavily scrutinized when compared to similar applications lodged in the past. This blogger can personally attest to the fact that since policy changes at Thai immigration in late 2015 the process of obtaining or renewing a Thai business visa has been a more intensive endeavor as Immigration officials scrutinize all business visa applications and supporting documentation extremely thoroughly. Therefore, this recent news regarding marriage scrutiny could easily lead one to infer that future marriage visa extension applications and renewal applications could require more documentation and the backlog for issuing such documents could become exacerbated as a result of the increased scrutiny and documentation requirements.

As a general rule, this blogger has advised those interested in remaining in Thailand to understand that the process of obtaining a long term Thai visa and/or a Thai work permit is becoming increasingly complex. As a result of this increased complexity, the notion that the Thai immigration process is something that is quick and easy is simply a fallacy. Thai immigration matters are arguably as complicated and time consuming as immigration issues arising in countries such as the USA or the UK. Those undertaking Thai immigration matters for the first time are strongly encouraged to retain the assistance of a competent professional.

In a recent posting on the website of the National News Bureau of Thailand the possibility of issuing Thai work permits with a validity of two years was discussed. To see the announcement please read this quotation from the aforementioned website:

The Cabinet has approved the extension of the work permit for foreign nationals to two years while giving employers four months to bring their workers to apply for the document. Director-General of the Department of Employment Arak Prommanee revealed that Cabinet approval has been granted to the proposal of the committee in charge of foreign labor management policies to have the life of foreign workers’ temporary work permit, or the pink card, extended from one year to two years. As a result, workers whose permits will expire on March 31, 2016 will be allowed to stay in the Kingdom for two more years, pending the nationality verification process. To apply for the new permit, employers will be required to take their foreign employees to report themselves at registration spots designated by the Department of Employment within 120 days from April 1. The Cabinet also assigned the Department of Employment to adopt regulations in support of the permit extension within 120 days, with consideration to be given to the prevention of foreign labor shortage, national security, prevention of permanent residency, assurance of workers’ protection and establishment of an efficient management system.

It should be noted that the announcement above seems unclear regarding the type of work permit discussed. Some foreign nationals, such as Burmese, Cambodian, and Lao nationals, have a different work permit regime compared to other foreign nationals and from the above information it is difficult to ascertain whether the proposed 2 year Thai work permit scheme is meant for all foreign work permits or a specified subset. Further information will be provided for clarification should a further announcement be made.

Meanwhile, while it appears from the above announcement that Thai officials may be poised to implement more favorable conditions regarding foreign labor regulations, Thai immigration rules are poised to become much more stringently applied. New immigration rules have been on the horizon for some time now as evidenced by a January 2016 articlein the Bangkok Post discussing the proposed rule changes:

In just under two months, the Immigration Bureau will officially begin arrests and tough new penalties against foreign law-breakers. The programme is in the hands of Pol Lt Gen Nathathorn Prousoontorn, one of the most experienced immigration officers. He has spent some time drawing up new laws, rules and regulations, as part of the first major overhaul of immigration enforcement in decades.

Those overstaying a visa in Thailand will soon face strict fines and penalties. Moreover, those caught committing a crime while overstaying could see themselves barred from entering Thailand for as long as ten years. There are some who would argue that these changes are long overdue. For decades, Thailand’s immigration rules have been quite lax when compared with the rules and regulations of other countries (notably the United States which has, since the mid 1950s, had severe bars for overstaying enshrined in the provisions of the United States Immigration and Nationality Act), but that era appears to be coming to an end. In the future, those overstaying more than 90 days could see themselves barred from reentering Thailand for varying periods of time depending upon the amount of time they have overstayed.

In a more recent article in the Bangkok Post further clarification was provided regarding how far immigration officials are seemingly willing to go in enforcing the soon-to-be enacted rules for overstayers:

Overstaying just got serious. After decades of treating visa-overstay less seriously than jaywalking, there now will be real and lasting consequences…the computerised blacklist operators at every airport and border crossing are going to kick out those who have overstayed, and not let them back. This is the really new part of the plan – exile.

Finally, notwithstanding the previously noted implementation of stricter overstay rules, it appears that those in Thailand as journalists may face increased scrutiny from immigration. In the aforementioned article, new rules for M visa holders (“M” standing for Media) was discussed:

The Foreign Ministry announced tweaked rules for the M-class non-immigrant visa and extension. Minister Don Pramudwinai himself helped to write, signed off, defended and will oversee the new rules for journalists.

Although presently there are no clear guidelines yet set regarding the new regime for administering M visas the consensus seems to be that M visa issuance may become more selective. Some have surmised that fewer freelance journalists will be granted M visas moving forward. This blog will continue to provide updates on the situation as the rules come into effect and the methods of enforcing new rule changes become clearer. Readers are strongly encouraged to follow the links above and conduct their own research on these matters as failure to adequately understand these policies could lead to problems in the future. New rules for overstay in Thailand are set to be implemented in mid-March 2016.

In a recent article in the Bangkok Post it was noted that the Prime Minister of Thailand is poised to travel to the United States to attend a summit between the United States of America and the Association of Southeast Asian Nations (ASEAN):

[H]e will join Asean leaders attending the first stand-alone US-Asean summit in the United States on Feb 15-16 in response to US President Barack Obama’s invitation… The meeting was called when Asean and the US upgraded their level of cooperation from dialogue partner to strategic partner in November last year…

This news comes upon the heels of a recent study which found that Thailand has major issues with skilled labor when compared to other jurisdictions in the region. To quote directly from The Nation newspaper:

According to the World Bank (WB), Thailand will face the biggest shortage of skilled labour in the Asean region…Yongyud Wongpiromsarn, director of the committee on education reform, said area-based education was key to redesigning the education system so it meets local demands…

Although it would appear that education reform remains key to creating more appropriately skilled labor in the Thai market, Thai officials also seem to be implementing legislation in order to improve the overall competitiveness of the Thai business sector. To quote from another article in the Bangkok Post:

The cabinet yesterday approved the draft amendments to the Trade Competition Act aimed at enhancing competition and reducing business monopolies and political meddling…

Notwithstanding the fact that Thailand has competitiveness issues it seems to this blogger that the current moment may be an auspicious time to invest or start a new business venture in the Kingdom. Although many news outlets have covered the fact that Thailand has been dealing with political and economic hurdles in recent years, this blogger’s opinion is that Thailand remains one of the best places to conduct business in Southeast Asia. While other countries may have more room for growth, Thailand has the advantage of substantial infrastructure and  can act as a corporate headquarters for a regional operation which could encompass places like: Laos, Myanmar, Cambodia, and even Malaysia or Vietnam. Meanwhile, Bangkok may soon be the entrepot for overland trade between China and the other ASEAN nations. This seems especially likely in light of the fact that a high speed rail system will be put in place linking China, Laos, and Thailand by rail. Bangkok appears set to act as the focal point for the exchange of goods and services between all of ASEAN and Southern China.

Clearly, Thailand has obstacles to overcome economically, but it would be unwise to discount Thailand as a place to do business, especially as getting into this market presently could compound later economic benefits.

In a recent article in the Pattaya Mail it was noted that those who overstay their visa in Thailand will soon be facing harsh consequences. To quote directly from the aforementioned article:

For those who surrender, foreigners overstaying up to one year will be banned for a year from coming back to Thailand. Three-year bans await overstayers of 1-3 years while those who have lived here without a visa for 3-5 years will be banned for five years. Overstayers of more than five years will be banned for 10 years.

It appears from reading the original notice from immigration that even those who overstay for a period of 90 days will be blacklisted for a 90 day period following their last departure. It would also appear that in conjunction with the recently announced blacklisting rules the Royal Thai Immigration Police have measures in place which will greatly improve that organization’s ability to monitor travelers arriving in Thailand. To quote directly from a recent article in the Bangkok Post:

Immigration police announced Monday the opening of a centralised mechanism to oversee and control the entry and exit of foreigners. The newly established Thai Immigration 24/7 Centre, located at Immigration Bureau headquarters, is divided into three working rooms where officers can monitor real-time CCTV footage at airports, ports and border checkpoints. An advance passenger processing system installed at the centre will allow officers to know personal details of visitors before they arrive, with more than 50 airlines cooperating.

Clearly, Immigration authorities in Thailand are committed to more thorough enforcement of Thailand’s immigration laws. The practical impact of these measures remains to be seen as the new rules regarding overstay are not to come into wide effect until March 20, 2016.

What do these developments mean for foreigner nationals traveling, living, and working in Thailand? First, it is clear that foreigners who once used Thailand’s somewhat lax overstay policy to remain in the Kingdom long term will no longer be able to remain in Thailand this way without some serious repercussions. Also, as Thailand recently announced changes in tourist visa and visa exemption stamp policies it seems clear that although true long term tourists will be able to remain longer in the Kingdom, those who simply use tourist visas as a means of living in Thailand will see this avenue closed in the future.

The Thai business visa remains a viable option for some who wish to remain in Thailand long term while those with a Thai spouse can avail themselves of the O visa to remain in Thailand with their family. Meanwhile, for those who qualify, the Thai retirement visa and the Thai Education visa are also methods of maintaining long term status in the Kingdom.

The Association of Southeast Asian Nations (ASEAN) was initially formed in 1967 and now includes the jurisdictions of Thailand, Vietnam, Laos, Cambodia, Indonesia, the Philippines, Malaysia, Singapore, Brunei, and Myanmar. Initially, ASEAN was a sort of loose coalition which generally acted in cooperation on matters of trade facilitation and various forms of international law and regulatory enforcement. The ASEAN Community which came into being on January 1, 2016 is a different type of entity. The AC is more akin to the European Union. Although, in many respects the AC and the EU are markedly different, most notably in the fact that the AC is unlikely to see anything resembling a unified currency any time soon. However, this blogger would posit that it is not an impossibility that a coordinated currency policy could come to exist in the AC region in the future.

One of the interesting aspects of the AC is the so-called ASEAN Economic Community or AEC. This is the economic infrastructure of the new community. At present completely free movement of people and labor is not being implemented by the community, but there are signs that such a scenario could come to pass in later phases of the AC. For example, there are 8 occupations which will be allowed freer movement within the AEC framework and they are: accounting, dental services, architecture, surveying, nursing, tourism, engineering and medical services. Those who hail from one of the ASEAN jurisdictions and engage in the aforementioned endeavors could see their career prospects improved as a result of new markets opening for their specific skill set. In Thailand it appears AC passport holders will still be required to obtain a Thai work permit, notwithstanding the creation of the AEC .

As can be seen from the various ceremonies marking the creation of the AC it is clear that many of the respective ASEAN governments welcome the establishment of the AC with open arms. In Thailand, the establishment of the AC coupled with the plans to make Bangkok the rail hub for trade between Eastern Southeast Asia, Western Southeast Asia, and Southern China could mean that Bangkok will become a central entrepot for trade and travel. Meanwhile, Thai officials are still studying the provisions of the Trans Pacific Partnership.

How the AC will ultimately function remains to be seen as the union brings together disparate political systems and jurisdictions with radically differing economies, but one thing is clear: the AC is poised to be the most dynamic economy worldwide as the region is a crossroads for trade and the economies throughout the region appear ready to significantly expand in the future.  As of the time of this writing there does not appear to be a coordinated plan to create unified ASEAN visa structure akin to the Schengen system, but in time such a development may come to fruition