Tag Archive: required

  1. Short Term Villa Rentals – What is Legally Required?

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    With 38.27 million tourists visiting Thailand in 2018, generating a total income of 64.5 Billion USD, tourism is one of the major economic sectors in Thailand. Because of the high number of visitors, short term rentals for villas, condominiums or houses are highly requested. But lessors should take care to fulfill the requirements of the Thai government for this kind of rentals.

    For every property that is rented on a short term (less than monthly) basis, and which not considered as the hotel under the ministerial regulation, a report of such rental must be filed to the local district office.

    According to Article 1 of the Ministerial Regulation, prescribing the class and rule of hotel business B.E. 2551 (2008), a hotel license is needed for villas or any building with at least 4 rooms and capacity for more than 20 guests. Section 3(2) of the Hotel Act states that the definition of “hotel” does not include accommodation established for the purpose of accommodation for monthly (or longer) periods. This means the accommodation on a short basis or not required the hotel license, which is not a hotel under the regulation must still comply with the hotel act and is required to notify as a “non-hotel” at the district office. If the property qualifies as a hotel in terms of size and capacity, but the property is rented out on a monthly basis only, it is still not subject to the hotel act and does not require a hotel license or notification as a non-hotel.

    Every rental less than a month must be reported to the registrar at the district office for a non-hotel activity of the villa. The notification must be done using a specific form as stipulated by the office. The following documents are usually required for such notification of non-hotel activity:

    • Land Title Deed;
    • House registration book of the villa;
    • Building Permit of the villa;
    • Floor plan of the villa;
    • Map to the villa;
    • Company’s affidavit (in case the company is the villa owner);
    • Memorandum of Association for the company; and
    •  An ID card or passport of the authorized director.

    As a side note: This makes the notification a requirement when a property is rented out on Airbnb.

    As the illegal operation of a hotel is subject to a jail sentence for up to one year or a fine up to THB 20,000 and additional fine up to THB 10,000 a day throughout the period of violation, according to Section 59 of the Hotel Act. This also constitutes a risk of blacklisting for foreigners, lessors of villas should be aware of this regulation.

    Please contact us if you have any questions about this topic [email protected].

  2. How Many Thai Staff are Required for my Business

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    1. Requirements for Business Visa

    Business visas (“non-immigrant-B-visas”) are issued by Thai embassies and consulates abroad. They can be issued for a 90 days period or for one year.

     

    a) Non-B visa 90 days (from Thai embassy abroad)

    For a 90 days non-B-visa, some embassies/consulates (particularly in the neighboring countries may require the presentation of an approval letter (WT3 form) which is issued by the Labor Department in Thailand. As a requirement for this approval letter, the Thai employer who is supporting the visa application must employ four Thai employees for each foreigner, however in our experience it is possible to negotiate and the number may be reduced to 1-2 Thai employees. Such employees must be registered at the Social Security Office in Thailand.

    In our experience, not all embassies/consulates require this approval letter and it is worth contacting the embassy/consulate in advance to inquire about their policy (particularly in western countries).

     

    b) Non-B visa 1 year (from Thai embassy abroad)

    Business visas can also be issued by the Thai embassy/consulate for one year.

    It should, however, be noted that even for the 1 year visa, the permission to stay is only for 90 days. This visa is suitable for foreigners who travel and leave Thailand frequently. In other cases, foreigners holding this type of visa do so called “visa-runs”.

    A new application at the Thai embassy/consulate abroad required after the expiration of the visa (after 1 year).

    The same applies here regarding the requirement of a WT3 form and the requirement of 1-2 Thai employees.

     

    c) Non-B visa extension for 1 year (from Immigration Office in Thailand)

    The Immigration Office in Thailand issues visa extensions for one year without the need of visa-runs (‘Visa Extension”).

    For this kind of permission to stay, the employer must strictly comply with a ratio between foreign and Thai staff of one foreign national per four (4) permanent Thai staff. Based on our experience, there is no room to negotiate with the Immigration Office regarding the number of Thai employees.

    The employment of Thai staff must be evidenced by presenting detailed documentation, including

    • Evidence of social security payments;
    • Documentation related to withholding of personal income tax
    • Photographs of each Thai staff, working place, together with the foreigner;
    • Financial statements of the employer (the company) of the preceding year
    • Corporate income tax return of eth employer of preceding year

    The Thai staff must have been employed since at least since 3 calendar months before the date of application. It is notable that bank statements are not required to be presented.

     

     

    2. Requirements for Work Permit

    Also, the work permit in Thailand requires the employer to employ Thai staff.

     

    a) Regular work permit

    The employing company must employ four (4) Thai employees for each work permit. Also here, in the first year of business after the registration of a new company, the Labor Department may allow a ratio of only 1-2 Thai employees per work permit, i.e. per foreigner working in the company.

    Such employees must be registered at the Social Security Office in Thailand. There is no requirement of other documentation (such as for the Immigration Office).

    It should be noted that the Labour Department, if it accepts the initial application with employment of only two Thai staff, it will follow up in the following year at the time of the work permit renewal, and then strictly require that the employer employs 4 Thai staff.

     

    b) If married to Thai spouse

    If a foreign employee is married to a Thai citizen, he/she is then entitled to apply for a work permit under privileged conditions from the Department of Employment. For such work permit, only two (2) Thai staff need to be employed for this foreigner.

    There is no requirement for a non-immigrant-B-visa in connection with such work permit, the non-immigrant-O-visa is sufficient.

     

    3. Conclusion

    Many of our clients who seek to reduce the number of staff on the payroll to the lowest amount possible, in particular newly set up companies. In this case, we recommend the following:

     

    a) Applying for a 1 year non-b visa at a Thai embassy/consulate abroad. For this type of visa, depending on the policy of the embassy/consulate, Thai staff may not be required;

    b) For the work permit application, at least in the first year of business it may be possible to negotiate a reduction of the required Thai staff from 4 to only 1-2 employees.

     

    Once the business operation is well established, the amount of 4 Thai staff are then often feasible from an operational perspective and the issue becomes less pressing.