Employer Of Record in Thailand

Thailand Country Facts

The Kingdom of Thailand is situated in southeast Asia and it is the second largest economy in the area, after Indonesia. The country is made up of 11th century Chinese migrants and is the only country in the region to avoid colonization.

In the recent past, the country has shifted from military rule to democracy like its strong ally the United States of America and plays a middle power role in global affairs. The standard of living has risen sharply in the recent past and the country has become a development success story.

The public transportation system is based on a bus system. For shorter distances, people often use “Tuk- tuks” which are three-wheeled vehicles used as taxis. The major cities are Bangkok, Nonthaburi, Nakhon Ratchasima, and Chiang Ma, and the nation’s currency is the Baht.

The Economy

The Kingdom of Thailand has one of the lowest unemployment rates and many citizens happily live off the land. Right now, the people are experiencing a technology boom, but the largest industries they work in are automotive and tourism.

The country relies on exports, which make up 2/3 of their GDP; the main exports are electronics, textiles, automobiles, and rubber. Before this, it relied on its production of rice, teak, and tin. There is currently a strong industrialization movement. Despite the technology boom and industrialization, the country is still the largest exporter of rice in the world and is a strong exporter of fish and shrimp.

Small and Medium Businesses

Small and medium businesses make up about 99.7% of all enterprises, making it one of the most interesting places to start a business. Those businesses make up the large portion of Thailand’s economic growth and account for 44% of its GDP and 29% of total exports. There are more than 3 million companies classified as small and medium businesses and they account for 86% of total employment. As a SME you are contributing to the business landscape as a whole.

Starting a Business

The Foreign Business Act of 1999 explains the opportunities and restrictions placed on foreign investors. Some of the restrictions prohibit foreigners from getting involved in broadcasting, forestry, fishery, trading antiques, and trading land.

Foreigners can establish three types of legal entities: a limited partnership, a representative office, and a limited company. The current investment capital requirement is 2 million Baht, and the government set up fee is 7,000 Baht.

You want to check if your business can apply for a Foreign Business License at all before you begin as this license will allow you to own 100% of your business. As a further resource to get started, the Thailand Board of Investment (BOI) helps business start-ups that are useful to the country.

Payroll

The Social Security Fund requires a contribution of 5%, but will not exceed the amount of 750 Bhat per month. The Workers Compensation fund is 0.2% to 1% for each employee. Payroll transactions must be stored for 7 years and each employee must be given a pay slip for each pay period.

Tax advantages

In 2021, the Thai Cabinet extended a 200% deduction from expenses used to purchase digital technologies to run a business; there are certain requirements for this benefit. A business can also make a 10% deductible donation to charity and life insurance can be tax deductible up to 15% of the total income.

Renewable Energy

Renewable energies make up 10% of Thailand’s domestic power generation. It uses solar, wind, hydropower plants, biomass, biogas, biofuels, and geothermal power. The Thai government has instituted The Alternative Energy Development Plan with the goal of increasing renewable energy to 30%. The Ministry of Energy encourages smart grids to reduce carbon emissions.

Business Culture

The Thai people value relationships and will do business with people they like.

• Slower Pace
  They tend to do business at a slower pace than the United States of America. The Thai business person
  6 is highly influenced by Buddhism which means they value harmony and avoid conflict.
• Deliberate
  They will spend a lot of time developing a business relationship by deliberating the issues.
• Remember the Chinese
  Many companies in Thailand are owned by Chinese corporations, so it may be important to be connected to both countries.

Food Culture

Rice is the staple food in Thailand and it is typically served with local vegetables and spices. Thailand is also famous for vegetable carving.
Lemon grass, ginger, and cilantro are often used to flavor dishes. Thai dishes tend to be light and aromatic. They eat a lot of fish and other seafood and they mix them with sauces and pastes.

Different regions of Thailand will favor different foods, but some of the more popular dishes are spicy shrimp soup, chicken in coconut soup, fried noodles and fried basil with pork.

Population

The population of Thailand is 69 million with 50.69% living in Urban areas. The Thai people are made up of several ethnic groups, including Chinese, Malaysian, Vietnamese, and Laotians. There are over 1 million ethnic Burmese, and many of them are refugees.

The official language is Central Thai, this language is used in business and in schools. Highly educated people typically speak English and many also speak Chinese or Malay. The adult literacy rate is 94%.

Geography

Thailand maintains a strategic position because it is a small country about the size of France/Texas and stands at the crossroads of Southeast Asia. The climate is mostly tropical, but the north of the country experiences colder temperatures between November and February. In the south of the country, you can find rainforests as well as coconut and rubber plantations. The rainy season can create some flooding concerns.

The capital, Bangkok, is situated at the center and is surrounded by agricultural lands. The country is mostly made up of a central plain with the famous Khorat Plateau in the east and the rest of the region is mountainous, with fertile rivers and sandy beaches with 2000 miles of coastline.

• Bangkok
  This is a bustling city that is at the heart of Thailand. There is a lot of demand for property here as well as shopping malls and fantastic transportation.
• Pattaya
  This is a beachside resort with tons of tourism and retirees. You can visit major cities with a quick hop on a train, but the city itself is rather laid back and calm.
• Phuket
  Foreign investors are popular in this city, and lots of tourists help to bolster the economy.
• Chiang Mai
  This city is the fifth largest in Thailand, so less populated than Bangkok. However, it is currently experiencing a lot of growth, with some sectors experiencing the fastest growth in the entirety of the country.

General Highlights

What you need to know about employing personal in Thailand:

Laws and Agencies that regulate labor relationships

Most labor laws in Thailand are for both foreigners and nationals, however there is one law the Working of Foreigners Act BE 2551 that relates to foreigners only.

Key Tax and Labor Authorities

Labor Contracts

Annual Taxable Income 

Residents and non-residents

Corporate Tax Rates 

The Corporate tax rate in this country is 20%. A foreign company not carrying on business in Thailand is sub- ject to a final withholding tax on certain types income

Public Holidays

Termination

Other forms of compensation upon termination include:

All employees who have worked at a company for more than 120 days receive a severance pay. This pay does not need to be made if there is dishonesty in performance of job and duties, or intentional criminal acts towards the employer, or one that causes financial harm. Or an employee is given warning when not following rules in the workplace and continues to break said rules. Or an employee does not show up for work for more than 3 work days without cause. Or imprisonment, unless this arises from negligence or petty offenses.