Update on Laws 2018

1. UPDATE ON LAWS 2018
Kowit Somwaiya and Team
LawPlus Ltd.
18th Legal Seminar
Korean-Thai Chamber of Commerce
13 September 2018
Pathumwan Princess Hotel, Bangkok

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The information provided in this document is general in nature and may not
apply to any specific situation. Specific advice should be sought before taking
any action based on the information provided. Under no circumstances shall
LawPlus Ltd. or any of its directors, partners and lawyers be liable for any
direct or indirect, incidental or consequential loss or damage that results from
the use of or the reliance upon the information contained in this document.
Copyright © 2018 LawPlus Ltd.

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Kowit Somwaiya
Managing Partner, LawPlus Ltd. and LawPlus Myanmar Ltd.
Vice President, IPAT
Director, INTA
• B.A. (Education – English), Ubon Ratchathani Rajbhat University
• LL.B., Thammasat University
• LL.M., University of Illinois
• Certificate of Instruction for Lawyers, Harvard Law School

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• Labour Protection Act Amendment No. 6
• Foreign Employment Administration
• Visa and Work Permit for Skilled Employee of BOI Company
• Visa and Work Permit for Unskilled Employee of BOI Company
• Smart Visa
• Eastern Economic Corridor Act B.E. 2561
• Residential Lease Agreement
Presentation Topics

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• Labour Protection Act B.E. 2541 (“LPA”) was enacted in 1998.
• Amendment No. 6 is effective from 1st September 2017.
• Work rule and its amendment are no longer required to be filed with DE.
• Its amendment must be
− published at workplace, or
− made available electronically to employees.
• Retirement severance pay is required.
Labour Protection Act Amendment No. 6 (1)

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Retirement Severance Pay
• Court used to grant retirement severance pays to retired employees in cases
where retirement age was contractually agreed or pre-determined by employer
(Supreme Court Judgments No. 1617/2547, No. 4732/2548 and No. 3196/2551).
• Retirement age is deemed termination of employment by employer if it is
− contractually agreed, or
− pre-determined by employer.
• If retirement age is not contractually agreed or not pre-determined by
employer or if it is agreed or pre-determined by employer beyond 60 years of
age,
− employee who turns 60 or older can give a 30-day retirement notice
− employer must pay severance pay if employee gives retirement notice.
Labour Protection Act Amendment No. 6 (2)

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Employment Service Agreement (Section 11/1 of the LPA).
• Made between a business operator and an employment service provider (“ESP”)
who is not a recruitment service company.
• Workers are hired by ESP but work at the business premises/factories of the
business operator.
• Salaries are paid to workers by the ESP or by the business operator.
• The business operator is deemed employer of the workers.
• The workers must be given the same treatment and benefits as those of the
employees of the business operator.
Labour Protection Act Amendment No. 6 (3)

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• Emergency Decree on Foreign Employment Administration B.E. 2560 (A.D.
2017)
− published on 22nd June 2017
− effective from 23rd June 2017
− imposed quota and stringent requirements for employment of foreigners
− complicated procedures and severe penalties
• Emergency Decree on Foreign Employment Administration (No. 2)
B.E. 2561 (A.D. 2018) published on 27th March 2018
− effective from 28th March 2018
− reduced requirements for employment of foreigners
− simplified employment procedures
− reduced penalties for offenders
− amended several other provisions of ED 2017
Foreign Employment Administration (1)

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Foreign Employment Administration (2)
• Foreigner can work in Thailand without a work permit if he/she
(1) enters Thailand occasionally to organize or attend meeting, conference,
seminar, art exhibition or other activities (to be prescribed by the Cabinet).
(2) is an investor or operator of business or expert or highly-skilled
professional who will create benefits to development of Thailand (to be
specified by the Cabinet).
(3) is a representative of a legal entity holding a foreign business license
under the FBA (Foreign Business Act).

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• Work Permit (“WP”) is issued within 15 working days from application filing
date. Each WP can be for a period of not exceeding 2 years (Section 59).
• Foreigner residing outside Thailand can submit application for WP by
electronic means (Section 60).
• Foreigner can enter Thailand and perform urgent and necessary work for 15
days after he gives a notice to DE official. An extension for another 15 days
is possible upon giving a second notice to DE official before the end of the first
15 days (Section 61). Failure to give such notice is subject to a fine up
THB50,000 (Section 119).
• If foreigner enters Thailand to work for BOI promoted company, the BOI
Office must notify DE official for WP and the DE official must issue WP within
7 days from BOI notice date. While waiting for WP, foreigner can work for the
company (Section 62).
Foreign Employment Administration (3)

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• Employer must notify DE official of name, nationality and nature of work of
foreign employee within 15 days from his employment date and also notify DE
Official within 15 days after employee resigns or is terminated (Section 13),
otherwise, a fine up to THB20,000 (Section 103).
• Employee must notify DE official of information about his employer, place of
work and nature of work within 15 days from his employment date and notify DE
official every time he changes employer (Section 64/2), otherwise, a fine up to
THB20,000 (Section 119/1).
Foreign Employment Administration (4)

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• Working without WP, a fine from THB5,000 to THB50,000. After the fine is
paid, offender will be repatriated to home country (Sections 8 and 101).
• Employing foreigner without WP, a fine from THB10,000 to THB100,000 per
employee (Sections 9 and 102).
• Employer who repeats the offence of employing foreigner without WP can
be subject to:-
(1) imprisonment of not exceeding 1 year or a fine from THB50,000 to
THB200,000 per employee or both, and
(2) prohibition from employing foreign employee for 3 years from the judgment
date (Sections 9 and 102).
Foreign Employment Administration (5)

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• Skilled Employee = President, Managing Director, General Manager, Factory
Manager, CFO, Production Engineer, etc.
• Skilled Employee must have education and experience required by BOI for
business of employer.
• Term of visa and WP depends on type of promoted business, such as
− 4 years for IHQ and ITC
− 2 years for software development business
− 1 year for call-center service business.
Visa and Work Permit for Skilled Employee of BOI Company (1)

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Steps for Obtaining Visa and WP for Skilled Employee
No. Action By From Timeframe
(Working Day)
1 Obtaining a Non-Immigrant B visa
from abroad
Employee Thai Embassy
outside Thailand
Variable
2 Obtaining a username and a password
for using the BOI e-Expert System
Employer One Stop Service
Center for Visa
and Work Permit
(OSS)
2-5
3 Obtaining an approval from the BOI for
positions of skilled employees
Employer BOI e-Expert
System (online)
5-20
4 Obtaining an approval from the BOI for
appointment of each skilled employee
in the approved position
Employer BOI e-Expert
System (online)
5
5 Obtaining a visa and a work permit Employee OSS 1
Visa and Work Permit for Skilled Employee of BOI Company (2)

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• Unskilled Employee does not have skill or expertise (factory workers, fishery
labours and housemaids, etc.).
• Term of visa and WP is 2 years, renewable for another period of 2 years.
• BOI promoted company can employ unskilled employees up to only 31st
December 2018.
• From 1st January 2019, BOI promoted company can employ unskilled employees
only from countries having signed MOU on employment of labours with
Thailand.
• BOI promoted company located in Special Economic Zones (10 border
provinces) and Songkhla, Pattani, Yala and Narathiwas can employ unskilled
employees under Immigration Act B.E. 2522 (A.D. 1979).
Visa and Work Permit for Unskilled Employee of BOI Company (1)

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No. Action By From Timeframe
(Working Day)
1 Obtaining approval to bring
unskilled employees into
Thailand
Employer Bangkok Employment Office
(“BEO”) or Provincial Employment
Office (“PEO”)
1
2 Obtaining an approval to bring
selected unskilled employees to
work in Thailand
BEO or
PEO
Relevant authorities in CLMV Variable
3 Obtaining an approval for
selected unskilled employees to
work in Thailand
Employer BEO or PEO 1
4 Obtaining a Non-Immigrant L-A
visa
Employee Thai embassy located in CLMV Variable
5 Attending a training workshop Employee Post-Arrival and Employment
Termination Center
1
6 Health check-up Employee Hospital in Thailand 1
7 Obtaining a work permit Employee BEO or PEO 7
Visa and Work Permit for Unskilled Employee of BOI Company (2)
Steps for Obtaining Visa and WP for Unskilled Employee

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• Implementation Rules, effective from 1st February 2018.
− Ministry of Interior Notification on Special Permission for Foreign Experts, Investors,
Executives and Entrepreneurs to Reside in Thailand on Special Basis B.E. 2561 dated
30th January 2018.
− BOI Notification No. Por. 4/2561 on Qualifications, Terms and Conditions for Smart
Visa B.E. 2561 dated 1st February 2018.
− BOI Notification No. Por. 5/2561 on Procedures for Requesting Qualification
Certificate for Foreigners to Obtain Smart Visa B.E. 2561 dated 1st February 2018.
• Benefits: The holder can
− Work in Thailand without a work permit.
− Report to immigration office only once a year.
− Re-enter Thailand without re-entry permit.
Smart Visa (1)

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Eligible Foreigners and Application Procedures
• Qualified experts, executives, investors, entrepreneurs and their spouses and
children.
• Investing in one of the 10 targeted industries.
• Must first obtain a Qualification Certificate from the OSS of the BOI or the Thai
Embassy or Thai Consulate from home country.
• Must obtain a smart visa from the OSS of the BOI or Thai Embassy or Thai
Consulate from home country within 60 days from Qualification Certificate date.
Smart Visa (2)

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Term and Renewal
Official fee for obtaining and renewing Smart Visa is THB10,000 per year for every
type of visa.
Smart Visa (3)
No. Visa Type Visa Term Renewal Term
1 Expert Per employment contract
but not more than 4 years
Same as visa term
2 Executive Per employment contract
but not more than 4 years
Same as visa term
3 Investor Not more than 4 years Same as visa term
4 Entrepreneur 1 year 2 years
5 Spouse and Children Same as related smart
visa holder
Same as visa term

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Important Dates and Key Terms
• Publication Date: 14th May 2018.
• Effective Date: 15th May 2018.
• EEC Area: Chonburi, Rayong, Chacheongsao Provinces, and other provinces to
be announced later by the Government.
• EECPC: EEC Policy Committee, chaired by the Prime Minister with powers to
grant licenses and permits in place of other government authorities.
• EECO: EEC Office acts as Secretary of EECPC in implementing EEC Act.
• SEPZ: Special Economic Promotion Zones in the EEC Area announced by
EECPC.
Eastern Economic Corridor Act B.E. 2561 (1)

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Ten Special Targeted Industries
(1) Next-Generation Automotive (6) Robotics
(2) Smart Electronics (7) Aviation and Logistics
(3) Affluent, Medical and Wellness Tourism (8) Biofuels and Bio-chemicals
(4) Agriculture and Biotechnology (9) Digital Technology
(5) Food for the Future (10) Medical Hub
ECCPC has power to designate additional industries as special target industries.
Eastern Economic Corridor Act B.E. 2561 (2)

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Benefits Available in SEPZ
• Foreigner investing in SEPZ can own land for business operation and own
condominium for residential purpose (Section 49).
• Lease and sublease of land and other immovable properties in SEPZ can have
a term of 50 years plus one-time renewal for not more than 49 years (Section
52).
• Non-Thai executives, specialists and skilled employees can work for
businesses in SEPZ without a work permit (Section 55).
• Their spouses and dependents are exempted from immigration law
requirements (Section 54).
Eastern Economic Corridor Act B.E. 2561 (3)

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More Benefits to Investors
• Payment of goods and services in the EEC area can be made by foreign
currencies (Section 58).
• Import and export in EEC area are exempted from all or part of customs
duties under the customs law (Section 57).
• Other privileges under the BOI law are available on a case-by-case basis
(Section 59).
• EECPC has power to grant licenses and permits under laws on building
control, factory, etc. in place of officials in charge of such laws (Section 33).
Eastern Economic Corridor Act B.E. 2561 (4)

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• A “Controlled Contract” under the Notification dated 12th February 2018 on
Designating Residential Property Lease Agreement as Controlled Contract
issued by the Contract Committee under the Consumer Protection Act B.E. 2522.
• Applicable to business operators, landlords, lessors who lease or sublease at
least 5 units of residential property in the same building or different buildings
(house, condominium, apartment or other residential property used for residential
purpose).
Residential Lease Agreement (1)

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• Must be made in the Thai language.
• Must contain details of:
− the lessor, the lessee and the leased property
− the lease term
− the rental fees, the public utility fees, the service fees and other expenses and their
calculations formula
− a description of the physical condition of the leased property as inspected and
acknowledged by the lessee.
• The lessor must return the security deposit immediately to the lessee at the end of the lease
term if the lessee has not caused any damage to the leased property.
• The lessee can terminate the lease agreement before the end of the lease term by providing
a prior written notice of at least 30 days to the lessor.
• The lessor can terminate the agreement only if the lessee breaches the agreement and fails
to rectify it within 30 days from receiving a written notice from the lessor.
Residential Lease Agreement (2)

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• Cannot
− waive or limit the liability of the lessor for a wrongful act or a breach of
agreement;
− require an advance payment of more than a one-month rental fees;
− require a security deposit for more than a one-month rental fee
• Cannot allow the lessor to:
− charge electricity and water supply charges exceeding the rates charged by
the relevant authorities;
− change rates of the rental fees, the public utilities fees, the service fees, or any
other expenses before the end of the lease term;
− forfeit the security deposit or the advance payment of the rental fee;
− inspect the leased property without prior notice to the lessee.
Residential Lease Agreement (3)

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• Cannot allow the lessor to:
− block the lessee from using the leased property;
− confiscate or remove the property of the lessee if and when the lessee fails to pay the
rental fees and other expenses in relation to the leased property;
− demand a renewal fee from the lessee;
− early terminate the agreement on a ground other than a material breach by the lessee;
• Cannot impose liabilities on the lessee for:
− damage arising from the general usage of the leased property and the equipment of the
building in which the leased property is located;
− damage to the building, property and equipment which is not caused by the lessee;
− damage which is caused by force majeure;
− defect of the building, property and equipment due to the general usage or its normal
wear and tear.
Residential Lease Agreement (4)

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