How to hire employees in Thailand.

To hire local and foreign employees in Thailand, companies must follow certain employment and recruitment guidelines to ensure their recruits are hired legally and in compliance with employment laws.

We have put together a guide on hiring employees in Thailand so that you can make well-informed personnel decisions. Learn more about the different ways of hiring your staff and additional requirements for recruiting foreign workforce in the country.

Two ways of hiring employees in Thailand

Setting up a local entity to hire staff

The obvious way is setting up a local entity, which could be a limited company, representative office or other available entities in the country. Businesses choosing this route must be aware of the Foreign Business Act, which restricts international operations and frequently necessitates specific approvals before international firms can start a business in Thailand.

Using a PEO to be the employer of record

Using the services of a PEO becomes exceedingly helpful when you are not yet ready to make a commitment to establishing within Thailand but do need to have employees on the ground. A PEO can make sure your employee is fully registered on your behalf.

A PEO is a third-party company equipped to hire, manage and pay employees within global markets on your behalf, that is, they offer the service of Employee of Record (EoR). An EoR service streamlines the process by managing all payroll, benefits and mitigation associated with your workforce, ensuring you stay compliant with local regulations and labour laws. And thus, sharing all hiring-related risks and obligations without the client company having to establish a local separate entity.

Once you decide that you wish to formalise your expansion in Thailand and are ready to make the investment, you can begin your process of incorporation and easily transfer employees from the PEO contractor to your registered entity.

What foreign businesses should know before hiring employees in Thailand

Employment contracts

Thailand’s employment legislation permits both fixed-term and permanent written and verbal contracts. Even though it is not compulsory, preparing a thorough employment contract for any new recruits in Thailand is always advised.

Contracts protect both the employee and employer from any potential legal disputes. However, the Thai legal system often rules in favour of an employee if a clearly defined contract is not in place. Avoid using generic online generated templates, as these can be riskier when hiring internationally if they do not include specific in-country requirements.

Employment contracts must include such basic parameters as:

• The role and responsibilities of an employee
• Benefit packages
• Compensation expectations
• Termination requirements

Additional requirements for hiring foreign employees

There are certain requirements that companies must meet before being able to recruit foreign employees.

These requirements are:

• To be officially registered in Thailand
• Must have a ratio of four local employees to one foreign employee
• Have applied for a tax ID and VAT registration
• A company with foreign majority ownership must have a minimum paid-up capital of THB 3 million per foreign employee
• A company with Thai majority ownership must have a minimum paid-up capital of THB 2 million per foreign employee
• Foreign employees will receive at least the minimum salary according to the Order of Royal Thai Police No.327/2557

What do foreigners need to be able to work in Thailand legally?

To be able to work in Thailand legally, foreigners must have a valid visa (Non-Immigrant ‘B’ or Business Visa) and a work permit.

Securing a non-immigrant B visa

You must obtain a non-immigrant B visa from the Thai Embassy or consulate in your home country.

The required documents include:

• An invitation letter from the employing company in Thailand signed by the company directors
• A request from the company that the applicant shall be given a non-immigrant B visa so that the company can apply for a work permit for the applicant
• Company attestation stating that the applicant is upstanding, law-abiding and guarantees that the employee will respect Thai culture and laws

The non-immigrant B visa should be applied at least 30 days before travelling to Thailand. Upon issuance of the non-immigrant B visa, you will be given a temporary stay in Thailand for 90 days.

Obtaining the work permit

The following documents need to be provided to apply for a work permit:

• Work permit application form
• Six photographs
• Signed copies of every page of the passport and:
  • Non-permanent residents – non-immigrant visa
  • Permanent residents – a certificate of permanent residence and certificate of alien
• Copy of education certificate and CV
• Recent medical certificate from a recognised hospital in Thailand showing that the applicant does not suffer from:
  • Mental illnesses
  • Leprosy
  • Tuberculosis
  • Drug addiction
  • Alcoholism
  • Elephantiasis
  • Syphilis

The employer must provide the following documents:

• Commercial Registration Department certificate stating the name of the managing director and/or director, its objectives and registered capital
• Shareholder’s list certified by the Commercial Registration Department
• Factory license issued by the Factory Department (if required)
• VAT certificate
• Social security payment filing

After submitting the documents, the work permit will be issued in approximately seven working days.

Restricted occupations for foreigners

Certain occupations are prohibited to foreigners and reserved for Thai citizens only. There are also certain requirements that foreigners must meet to apply for a particular employment opportunity.

Four lists of prohibited jobs fall within the Prescription of the Prohibited Occupations for Foreigners. They are as follows:

• Occupations that are strictly prohibited for foreigners
• Prohibited occupations for foreigners with the condition that foreigners are allowed to work under international agreements or obligations to which Thailand is bound under the provisions of law
• Prohibited occupations for foreigners with the condition that foreign workers are allowed to do skilled or semi-skilled work when working for an employer
• Prohibited occupations which foreign workers are permitted to perform under the condition of having employers and permitted to enter Thailand by Immigration Law under MoUs or agreements between the Thai government and foreign government

To learn more, see our Restricted Jobs for Foreigners guide.

Are foreign employees entitled to social security in Thailand?

Employers are required to register foreign employees who are legally employed in Thailand with the social security office. Foreigners are entitled to the same benefits as local employees.

Minimum salary for foreign employees

Tips on hiring in Thailand

Recruiting employees in Thailand can be a challenging and time-consuming process, especially for those businesses that decide to establish their own entity within the country. In that instance, companies must decide their organisational structure, set up a budget, and follow local legal requirements.

Leverage well-known employment websites

If your company doesn’t have a large budget allocated for recruitment, you can use popular job boards like JobsDB.com, LinkedIn, JobThai.com, and JotTopGun.com. However, it’s important to remember that this approach could take longer to find the right talent due to the low unemployment rate. Furthermore, your listing descriptions should clearly mention all the advantages, salary and benefits of a potential candidate working for your firm.

Use the local currency and language

Doing so is particularly important when it comes to dealing with documentation like offer letters or employment contracts. With such documents, businesses must utilise the Thai baht for all monetary amounts. Also, use Thai with your employees whenever possible, even if they know English. This way, your new employees will feel comfortable and welcome as they commence their new responsibilities.

Develop established and structured processes

Making a professional and positive impression is essential for the recruitment process. Your company must have a very clear structure for new hires, from recruitment through onboarding. Establishing a well-developed onboarding plan will aid your new global employees learn the ropes and integrate with the team.

How Acclime can help with your HR needs

To hire employees in Thailand, foreign businesses must either set up a local entity or use the services of an employer or record provider.

Acclime is a premier provider of professional formation, accounting, HR & advisory, legal and tax services in Thailand. With the help of our EoR services, you can hire employees without setting up a legal entity while saving time, reducing costs, and getting localised support with payroll, HR, and more. We will keep your business compliant with Thailand’s labour laws and regulations, giving you peace of mind and relieving you of the burden of ensuring compliance for your employees.

Once you have decided to incorporate in Thailand, our company registration team can help you with the set up process and take care of the transfer of employees to your new company.

We have explained that a company wishing to expand to Thailand by employing staff here has two options: incorporation or EoR. We have outlined that both can be good solutions depending on the immediate needs of the foreign company. We have also listed some of the compliance requirements and given an idea of what additional costs you can expect. For the next step we recommend talking to an advisor.

Acclime is your premier advisor by being the provider of incorporation services and by being a PEO in Thailand. We can provide all the information you need to make the right decisions. Contact us today to learn how Acclime can support your business expansion.