Monthly Archives: January 2011

Guaranteed Cheap, Easy & Absolutely Legal Ways to Get Work Permits & Immigration Visas

Just kidding.  The second biggest headache for most foreigners wanting to do business in Thailand is almost certainly work permits and visas.  There are numerous sources on the web that provide or purport to provide the latest work permit and immigration information and services at the lowest possible cost.  This isn’t one of them.

Instead, we’ll explain why we think this is such a major headache for foreigners in Thailand.  In large part we see two main reasons (there are others).

The first reason involves an extraordinarily broad definition of a legal term that provides officials with tremendous unfettered discretion, a recurring theme in Thai law.  Here, the problem lies in the broad definition of the term “work” under Thai work permit law.  The term work is defined as “engaging in work [seems rather circular at this point, but it goes on to provide the definition as] exerting energy or using knowledge whether or not in consideration of wages or any other benefits.”

Read that definition again.  It specifically says you are engaged in “work” even if you are not getting paid.  It’s hard to see what this definition doesn’t cover.

This definition is broad enough to even include attendance at business meetings, making pitches for products and services and short stays of only a few days to render services or inspect factory sites.   If you walk through the business centre of any major Bangkok hotel, most of the foreigners in that business centre are almost certainly engaged in activities that constitute “work” under Thailand’s work permit law.  And we suspect that few, if any, of those foreigners know they are supposed to have work permits, let alone have them.

Will they get arrested?  Unlikely.  We have never seen the authorities randomly raid the business centre of a five star hotel looking for illegal foreign workers.  Could they get arrested?  That’s a very different question.

It’s not just at hotel business centre that you’ll find foreigners violating Thailand’s work permit laws, but also at offices and factories across Thailand.  Thailand’s travel industry wants to increase business tourism by hosting conventions and seminars.  This makes sense: Thailand is a great place for business events and these sorts of events attract ‘quality’ tourists, the holy grail of the TAT.

But the vast percentage of foreign short-term business visitors to Thailand violate Thailand’s work permit laws.  And this is not a trivial offense.  The law, as it is written, says that foreigners violating work permit laws can be imprisoned for as long as five years.

Even if five year prison terms are not the norm (they aren’t), you would think that the combination of (a) a need for and desire to have foreigners visit Thailand for these short term business purposes, (b) the broad definition of the term “work” and (c) the draconian penalties for engaging in work without a work permit would lead to an easy, hassle free process to routinely grant approval to engage in such “work” upon arrival at the immigration counter with a simple visa stamp.  It’s a no brainer.

But you’d be wrong, and the reason lies in second major problem with Thailand’s legal infrastructure.  Immigration authorities simply cannot grant work permits.  A completely different agency in a separate ministry issues work permits: the Alien Occupations Division of the Ministry of Labour.

This means that a “B” class visa does not allow foreigners to engage in short term activities such as meetings and inspections because such activities constitute “work” under Thailand’s work permit law.  It’s almost seems deceptive, doesn’t it?

The law is so counter-intuitive that it creates an environment where you’d be surprised if any foreigners actually comply with the law.  And that creates opportunities for selective enforcement.

But it goes beyond short business visits.  It also helps explain why the process of getting long term visas and work permits can be so complicated.  This is often why foreigners seeking work permits and visas need to run around to different government offices getting different documents and approvals.  There are websites and forums that thrive because they provide foreigners with a place to vent their frustrations about the whole process.

Many foreigners don’t even bother.  They keep their heads down and hope they don’t get caught.  Enforcement in this area is selective and seems to really depend upon whether someone has an interest in having you arrested.  That someone could be a competitor, a disgruntled former employee, a difficult debtor or a jilted lover; the possibilities are endless. The laws in this area create perverse incentives for non-compliance, evasion and corruption.

This is bad in terms of achieving whatever policy objectives Thai work permit and immigration laws are intended to achieve.  (We can imagine some legitimate policy objectives.)  And it leaves many foreigners vulnerable to selective enforcement.  It’s a lose/lose policy.

Why?  We don’t think, as some suggest, it’s a conspiracy against foreigners, although we appreciate why it often seems like one.  Rather, a large part of this problem exists because two different ministries and departments with different bureaucracies that are often controlled by different political parties with competing agendas make and implement the rules and regulations for work permits and immigration.

But what about the BOI’s “one-stop-shop”?  It does streamline the process of getting visas and work permits, but that is not because one agency is handling the process.  Instead, it is more streamlined because officials from two different agencies are present at the same place to process work permits and visas.  And regulations have been promulgated so that, ideally, they work together and don’t try to trip each other up.  It generally works (a pleasant surprise), but it’s only available to some foreigners.  More important, the mere fact that a one-stop shop is needed to solve this problem also serves to demonstrate the fundamental nature of this problem.

Thai ministries and departments are generally fiefdoms unto themselves.  They often compete with each as if they were fierce business rivals.  Often they are fierce business rivals.  We’re not criticizing the BOI’s one stop shop.  Indeed, it’s a wonder that there is a BOI one-stop shop.

But the BOI’s one-stop shop doesn’t solve all of the headaches created by these two fundamental problems with Thailand’s system of regulating foreigner workers and granting visas so that foreigners can be in Thailand when performing such work.  It helps some, but it doesn’t cover everyone, and it doesn’t solve the underlying problem.  If it did, you wouldn’t see advertisements for work permit and immigration service providers, many of them obviously dodgy, virtually every time you do Google search with word “Thailand” or take a stroll along Sukhumvit.

Crystal Ball Grazing – 2011

What can we expect 2011 to bring to Thailand in terms of policy reform that makes Thailand an easier place for foreigners to do business, reduces corruption and unnecessary regulation (two things that tend to go together here) and generally improves the Thai legal environment for foreign investors?  We’ll hazard a guess, but before doing that a few preliminary comments.

This blog is still young and there are many Thai laws and regulations we have not yet had an opportunity to discuss.  This makes it difficult for us to list out all of the laws where we think reform is necessary and then say if we expect to see that reform (or the opposite) in 2011.  We can only discuss matters generally, but when you see our conclusion, you will probably conclude that such generality doesn’t change the substance of our prediction, or rather, hunch, for 2011.

Although we prefer to stay clear of Thai politics, any predictions about 2011 must at least touch on the Thai political situation.  But we don’t think it matters whether the Democrat party remains in power or the PPP comes to power.  What really matters is whether a non-elected government takes power.  Elected governments in Thailand have enacted legislation that we consider foolish and irrational, but the most irrational and destructive legislation and regulation almost always comes from unelected governments.

For example, take a look at the Foreign Business Act (FBA), one law we have discussed and dissected over several posts (but without doing anything more than just scrapping the surface).  It was the unelected National Legislative Assembly (NLA) that pressed for serious changes to the FBA that would have, in substance, amounted to a taking of businesses from foreigners.  When the NLA was replaced by an elected legislature, the efforts to press for a more restrictive FBA simply dropped from the headlines.  The press to make the FBA more restrictive simply stopped.

None of the parties with serious popular support have pressed for a more restrictive FBA.  When the Democrats were out of power, their leaders made overtures to the foreign business community about serious reform of this law, but that never occurred.  Indeed, efforts to enforce the existing law have increased in recent years.

But we certainly don’t fault any political party or group for that.  It appears as though the bureaucracy proceeded with its own agenda independent of which party or coalition of parties was in power.

And that is our prediction (“guess” would be a better word) for 2011.  Provided we don’t see an unelected government take power, we don’t expect to see any material change in regulation or law in most areas.  Although we’d love to be proven wrong, we certainly do not expect to see any real reform.  Instead, we expect to see a slow bureaucratic drift towards more restrictive and unnecessary policies and regulations at the margins.  All of this, of course, assumes that the current political stalemate continues.  If that changes, all bets are off.