UPDATE ON LAWS 2018 Kowit Somwaiya and Team LawPlus Ltd. 18 th Legal Seminar Korean-Thai Chamber of Commerce 13 September 2018 Pathumwan Princess Hotel, Bangkok 0
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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 2
LawPlus Ltd. Established in 2003 Major practices Banking and finance Corporate and M&A FDI and investment promotion IP and ICT Dispute resolution and litigation Rankings: Visit www.lawplusltd.com for newsletters and articles 3
Presentation Topics 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 4
Labour Protection Act Amendment No. 6 (1) Labour Protection Act B.E. 2541 ( LPA ) was enacted in 1998. Amendment No. 6 is effective from 1 st 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. 5
Labour Protection Act Amendment No. 6 (2) 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. 6
Labour Protection Act Amendment No. 6 (3) 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. 7
Foreign Employment Administration (1) Emergency Decree on Foreign Employment Administration B.E. 2560 (A.D. 2017) published on 22 nd June 2017 effective from 23 rd 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 27 th March 2018 effective from 28 th March 2018 reduced requirements for employment of foreigners simplified employment procedures reduced penalties for offenders amended several other provisions of ED 2017 8
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). 9
Foreign Employment Administration (3) 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). 10
Foreign Employment Administration (4) 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). 11
Foreign Employment Administration (5) 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). 12
Visa and Work Permit for Skilled Employee of BOI Company (1) 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. 13
Visa and Work Permit for Skilled Employee of BOI Company (2) Steps for Obtaining Visa and WP for Skilled Employee No. Action By From Timeframe 1 Obtaining a Non-Immigrant B visa from abroad 2 Obtaining a username and a password for using the BOI e-expert System 3 Obtaining an approval from the BOI for positions of skilled employees Employee Employer Employer Thai Embassy outside Thailand One Stop Service Center for Visa and Work Permit (OSS) BOI e-expert System (online) (Working Day) Variable 2-5 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 Obtaining a visa and a work permit Employee OSS 1 5 14
Visa and Work Permit for Unskilled Employee of BOI Company (1) 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 31 st December 2018. From 1 st 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). 15
Visa and Work Permit for Unskilled Employee of BOI Company (2) Steps for Obtaining Visa and WP for Unskilled Employee No. Action By From Timeframe 1 Obtaining approval to bring unskilled employees into Thailand 2 Obtaining an approval to bring selected unskilled employees to work in Thailand 3 Obtaining an approval for selected unskilled employees to work in Thailand 4 Obtaining a Non-Immigrant L-A visa Employer BEO or PEO Bangkok Employment Office ( BEO ) or Provincial Employment Office ( PEO ) Relevant authorities in CLMV (Working Day) 1 Variable Employer BEO or PEO 1 Employee Thai embassy located in CLMV Variable 5 Attending a training workshop Employee Post-Arrival and Employment Termination Center 6 Health check-up Employee Hospital in Thailand 1 7 Obtaining a work permit Employee BEO or PEO 7 1 16
Smart Visa (1) Implementation Rules, effective from 1 st 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 30 th January 2018. BOI Notification No. Por. 4/2561 on Qualifications, Terms and Conditions for Smart Visa B.E. 2561 dated 1 st February 2018. BOI Notification No. Por. 5/2561 on Procedures for Requesting Qualification Certificate for Foreigners to Obtain Smart Visa B.E. 2561 dated 1 st 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. 17
Smart Visa (2) 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. 18
Smart Visa (3) Term and Renewal No. Visa Type Visa Term Renewal Term 1 Expert Per employment contract but not more than 4 years 2 Executive Per employment contract but not more than 4 years Same as visa term 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 Official fee for obtaining and renewing Smart Visa is THB10,000 per year for every type of visa. 19
Eastern Economic Corridor Act B.E. 2561 (1) Important Dates and Key Terms Publication Date: 14 th May 2018. Effective Date: 15 th 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. 20
Eastern Economic Corridor Act B.E. 2561 (2) 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. 21
Eastern Economic Corridor Act B.E. 2561 (3) 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). 22
Eastern Economic Corridor Act B.E. 2561 (4) 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). 23
Residential Lease Agreement (1) A Controlled Contract under the Notification dated 12 th 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). 24
Residential Lease Agreement (2) 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. 25
Residential Lease Agreement (3) 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. 26
Residential Lease Agreement (4) 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. 27
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