.

A Work Permit allows a foreigner to ‘work’ in and operate a business in Thailand as a skilled professional or as an employer. The Work Permit is required to work legally in the Kingdom of Thailand and, working without a Work Permit may result in serious consequences. Any foreigner, who is deemed to be working without a Work Permit, may be punished with either; a fine, or imprisonment, or both.

• • Thai Business Entities who employ a foreigner must have at least two (2) million baht in fully paid-up registered capital. However, where the foreign employee has a Thai spouse, the registered capitalization may be one (1) million baht instead.
  • Foreign Business Entities who operate their business in Thailand can apply for work permits for their employees providing they bring at least three (3) million baht [per employee] into the country.

The entities above may be granted a maximum ten (10) work permits each however, the BOI-promoted company is an exception from this restriction. Thailand Board of Investment is authorized to grant the promoted companies special right concerning the issuance of both Work Permit and Visa to the foreign employee working on those projects as ‘technical experts’.

Before you can apply for a Work Permit, you must hold a Non Immigrant B [Single Entry] 3 Month Visa first. Ideally, this visa would be acquired prior to your arrival in Thailand. We can assist with obtaining the visa in your home country or in another country nearby to Thailand [where possible].

Minimum Salary

Each country and/or region has a specified minimum monthly salary for foreigners holding a Work Permit in Thailand. They are as follows:

1. 1. Australia, Canada, Europe [except Russia], Japan, USA = 50,000 THB Salary [per month] and 1,792 THB Withholding [Income] Tax payable [per month] or,
   2. Hong Kong, Singapore, South Korea, Taiwan = 45,000 THB Salary [per month] and 1,292 THB Withholding [Income] Tax payable [per month] or,
   3. Other Asian Countries, Central and South America, eastern Europe, Mexico, Turkey, Russia, South Africa = 35,000 THB Salary [per month] and 460 THB Withholding [Income] Tax payable [per month] or,
   4. Africa [except South Africa], Burma, Cambodia, Laos, Vietnam = 25,000 THB Salary [per month] and 0 THB Withholding [Income] Tax payable [per month]

Note: the above calculations for Withholding [Income] Tax are based on the Work Permit holder a) being a/the director of the company and b) applying standard deductions only.

Building Permits are regulated by the Building Control Act and issued under the Town and City Planning Act. Providing the land has clear and legal title, a Building Permit may be obtained for construction of a compliant building [adheres with the submitted and approved plans, zoning, purpose, usage, slope and elevation regulations], via the local municipality – Tessaban [the Building Department]. The builder normally applies for a Building Permit on behalf of the owner/buyer [of the soon to be constructed building(s)].

According to the rulings of some Thai courts and administrative practice, building ownership can also be established merely pursuant to Section 146 sentence 2 CCC which distinguishes and separates the land from a building constructed thereon where the building is built “in the exercise of a right over [the land owner’s] land” and without a superficies. Thai courts consider leasehold to be a “right to another person’s land” and current administrative practice in Thailand takes the same position.

However, current administrative practice may also require additional documentation that it deems to be evidence of house ownership. For the first owner of a building [house], i.e. the builder, this is the Building Permit for the building. Administrative practice considers the permit relevant indicia of house ownership [for the first owner of the house only] purportedly because the land owner must consent in writing to the issuance of the permit and because the permit form calls the grantee the ‘owner’ of the building to be constructed.

Prelude

Short term rental properties can be a lucrative investment opportunity and, in a technologically advanced world, many people are turning to platforms and apps that provide access to short-term opportunities rather than long-term, for better returns, obviously.

The legality surrounding short-term rentals in Thailand is mired in confusion and grey area, current laws are somewhat liquid and difficult to lock down. To help you stay aware, and make informed decisions, let’s explore this in further detail.

Thousands of people have listed their properties for short-term rental on AirBnB in Thailand and, upon searching AirBnB’s website for rentals in Bangkok, just as one example, you’ll discover hundreds, even thousands of listings, that might make one automatically assume that short-term rentals must be legal in Thailand?

Nothing could actually be further from the truth! Short term rentals are illegal in Thailand unless you have a Hotel License. A court ruling in May 2018 reiterated this to the surprise of many. In the Prachuap Khiri Khan province, the Wan Vayla Condo was found to be acting illegally, and the court ruled that as the condo had not obtained a Hotel License, they could only [legally] advertise and rent for 30 days or more [per guest]. As a result, the Wan Vayla Condo was issued with penalties and fines and, the final decision on further action is still pending.

Now, if this fills you with concern and worry, and perhaps it should, there’s an alternative though, as mentioned above. A long-term Rental Accommodation License for thirty (30) or more days [per guest] is both easily obtained and still more lucrative than other countries when comparing apples-for-apples. Land prices, especially in tourist areas, continues to climb and Thailand’s’ economy is growing so, we still see people achieving five (5) to ten (10) percent returns which, remains right at the top-end for like-for-like returns most western countries.

Hotel License

Depending on the size of the hotel’s facilities and services provided, Hotel Licenses can be categorized as follows:

• • Hotel business only [50 rooms or less]
  • Hotel and restaurant business
  • Hotel, restaurant and seminar rooms
  • Hotel, restaurant, seminar rooms and entertainment business

If you are concerned about potential legal issues arising from the rental of your property short-term in Thailand [without the appropriate Hotel License] then, perhaps there’s an alternative. Long-term property rentals and investment continue to be a lucrative option to any investor in Thailand. Land prices, especially in tourist hot-spots, continue to attract buyers and those economies [notwithstanding COVID-19 of course] have been growing steadily.

There are many condominiums, apartments and villas in popular locations such as Bangkok, Phuket, Chiang Mai or Koh Samui where you can sign a long-term rental agreement with your Lessee/Tenant and apply for a Long Term Rental License instead. If you invest with this in mind, you can still rent it to locals, local expats or even foreign visitors who stay in the Kingdom for longer durations of time – 30 days or more [per guest], as is required for the Long Term Rental License.

This can provide stable and solid rental income return between five (5) and ten (10) percent as well as long-term capital gain. As the Thailand property market continues to experience steady growth; the value of your long-term investment should increase along with it. This means that in addition to the rental income, you might also on-sell the property for a healthy profit in the future. In comparison to short-term rentals, the long-term alternative is clearly legal and the process is relatively straightforward.

Some developers will even offer guaranteed rental deals or buyback guarantees although, such offers should be approached with the same diligence as one might undertake elsewhere as Thailand has more than its fair share of opportunists ready to take your hard earned savings.

For the immediate future, we’d suggest short-term rentals as a generally an unwise investment and/or practice in Thailand unless purchased through authorized channels whereby a short-term management facility is in place along with the appropriate Hotel License. There is simply no guarantee that your business will be allowed to operate unhindered and part of any investment strategy should include medium-long term security.

If the laws were to change in years to come or the government relaxes their position to allow certain criteria for Hotel Exemption Licenses, it would be worth revisiting this on a case-by-case basis.

The application for the license to sell food in a restaurant is to be submitted at the district office responsible for the area in which the restaurant is located, and the process consists of the following steps:

1. 1. Samui Law Firm prepares the government forms and supporting documents necessary for submission at the responsible district office for the application. It is important to note that the Building Permit in which the restaurant is located is key in allowing such business operations.
   2. After the application has been accepted by the officials, an appointment will need to be made for the officials to inspect the restaurant. Further to the inspection, additional documents might be requested at the official’s discretion.
   3. Although not currently enforced on Koh Samui, all Thai employees working in the restaurant could be required to go to the district office to take a test which consists of fifty (50) multiple choice questions, of which at least forty (40) questions must be answered correctly. The questions mainly concern maintenance of standards and hygiene in the restaurant. The district office provides a booklet which the employees may study prior to the test. Prior to issuance of the license, the staff will also be required to provide a medical certificate.
   4. Once the officials determine that the documents, inspection of the restaurant, and employees test results meet their requirements, a license will be issued. The issuance of the food license may take up to or slightly longer than a month depending on several factors including the availability of the officials for an inspection and the state of the restaurant etc.

• Note: The government fee is calculated based on the square meters of the restaurant.

Should you decide to sell alcohol in your restaurant or bar, Samui Law Firm can also assist you in applying for the retail license to sell alcoholic beverages. This license application requires some government forms, company registration documents, documents from the legal owner of the property and the authorized director’s passport or Thai ID copy. It can be obtained from the Excise office located in the district where you are located within a few business days normally, providing all documents are in order.

However, it should be noted that the location of the restaurant/bar [selling alcohol] should not be in close proximity [within 500 meters] from a school, temple and/or hospital, and the officials may visit the premises for an inspection before issuing the Alcohol License.