New documentation required for non-BOI employers
2 Nov 18
IMPACT – MEDIUM
What is the change? Thailand’s One Stop Service Center is imposing additional documentation requirements on non-Board of Investment companies applying for work visa renewals.
What does the change mean? According to an unwritten policy, non-BOI companies renewing work visas for foreign employees must present tax documents and social security contributions for the previous three months if immigration officers are suspicious of the business operation of the employer. The following are examples of when the companies may need to present the documents:
- When the net value of assets (total current assets minus total current liability) is not significantly more than 30 million baht (about US$910,000), e.g., 30-50 million baht.
- When the company’s Thai or foreign employees are paid the minimum required salary or slightly more, e.g., if Thai employees are paid around 9,750 baht per month and foreign employees are paid 35,000 Baht per month.
- When the ratio of Thai employees to foreign employees is just enough to cover the required four-to-one ratio, e.g., if a company has 20 Thai employees and five foreigners.
Immigration officers may exercise discretion in considering many factors and the overall circumstances; therefore, it is difficult to predict who will be affected.
What is the purpose of this change? The employer must be the real employer and have real business operations. Immigration officers are vetting the qualifications of the company rather than the employees or particular nationalities. Therefore, if Indian nationals or other “watch list” nationals are employed by large companies where immigration officers do not have reason to suspect the employer, additional documents will not be requested. Watch list countries are: Argentina, Bangladesh, Bolivia, Chile, Colombia, Gambia, Ghana, Guinea, Iran, Indian, Liberia, Mali, Nepal, Nigeria, Pakistan, Peru, Senegal, Sierra Leone, Sri Lanka, Togo and Uganda.
- Implementation time frame: Nov. 1.
- Visas/permits affected: Work visa renewals for non-BOI employers whose business operations raise suspicion.
- Business impact: The stricter rules are in response to an increase in forged documents and false statements on applications in the past year.
- Next steps: Employers should factor in the additional time needed to gather tax and social security documents for the previous three months, as well as time to obtain the necessary certifications if they are asked to do so.
Background: Generally, only the previous month’s tax, VAT (value added tax) return and social security contributions are required by the OSSC. The new rule requires the following for any suspected employer:
- Copy and receipt of monthly salary withholding tax for all Thai and foreign employees for the previous three months that are officially certified by the Thai Revenue Department.
- Copy and receipt of monthly VAT returns for the previous three months that are officially certified by the Thai Revenue Department.
- Copy and original receipt of the monthly social security contribution for the previous three months of all Thai and foreign employees.
Analysis & Comments: Employers should be aware that additional company qualifications and documentation may be requested of them, such as financial statements, total assets and liabilities, and number and salaries of Thai and foreign employees.
Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.