Integrity Legal

For a foreign small business owner in Thailand in order to obtain a Thai visa extension the foreigner must hold a valid Thai work permit, the business must employ 4 Thais per foreign employee, and must get those Thai employees social security benefits. All of this is  fairly straightforward, but a question arises when the non-Thai foreigner is the Managing Director of the company: is the Managing Director entitled to sign up for and receive social security benefits?

Many issues are left to the discretion of the Thai government officers so one of the frustrating aspects of doing business in Thailand is the fact that different offices interpret the Thai laws and internal administrative regulations differently. Case in point, some social security offices view the Managing Director of a Thai company as ineligible to receive social security benefits because he is not “labor,” and therefore is not someone who should be accorded labor protections under Thai law.

This is an odd stance to take particularly when looking at the issue from a common-law perspective because under the jurisprudence of most common law jurisdictions an incorporated entity is viewed as a legal person, separate and distinct from natural persons (even where a natural person is the sole owner or director of a company, or juristic person). Therefore, under the common law, the stance would probably be that the Managing Director works for the company and therefore is entitled to employment benefits like social security.

A counterargument to this position could be that although working on behalf of the company, this role is different than actually working “for” the company. As the Managing Director is, in a sense, the living embodiment of the company. It is a very semantic argument, but not one without at least some merit.

All of this begs the question: How does one  obtain social security benefits for the managing director of a company in Thailand? Where the person seeking the benefit has already enrolled for social security, the benefit can be rolled over when the person becomes managing director. However, the person seeking to roll over the benefit must have left their previous employment no more than 6 month prior to roll over (and this time frame may be left to the discretion of the Social Security legal officer). Another method for obtaining the benefits in this situation is by delineating and distinguishing between Managing Director functions and functions as an employee. In order to do this, one must also show separate pay for the separate endeavors. At the end of the day, it is up to the officer’s discretion and it is always wise to consult a Thai lawyer before making any major business decisions in Thailand.

For more information, please see:

Thailand Visa

Thai Company Incorporation

Note: None of the above should be construed nor used as a substitute for individualized advice from a duly licensed attorney in good standing. No attorney client relationship should be inferred from reading this post

An oddity of Thailand’s Social Security benefits scheme

Tags: Managing Director, Thai Company, Thai Visa Extension, Thai Work Permit, Thailand Business, Thailand Social Security, Thailand Visa
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