Logic behind 4 Thai employees VS 1 Foriegner

[ajcnx]

What is your opinion on for Rules like hiring 4 Thai Employees VS 1 foriegner . Most of the small and medium scale business does not require that kind of employee force and above all it is very hard to hire Thais as you hardly find ones who are ready to work. If they start work in a week or so they dont show up. Personally i know many businesses who have the names of thai employees only in there paperwork for visa issues. Cant the laws like paying a bit higher tax for foreigner be helpfull other than going through all this hassle of showing Thai workers. 

[blackcab]

Thailand has enough small businesses. The country doesn't really need single person entities competing with Thai citizens. Could you imagine how many people from neighbouring countries would go down this route?

 

The rule isn't designed to make life difficult for digital nomads or people with a niche business with no local competition; it is designed to stop mass inwards migration from neighbouring countries.

 

If, on the other hand, you are going to genuinely employ Thai citizens and benefit more people than just yourself then the criteria of four employees is not that high.

 

If what you want is a visa you pay for then the solution is an Elite visa.

[ThaiBunny]

The same logic lies behind the long-standing Malaysian policy of having Malays forming a proportion of a company's employees https://www.economist.com/briefing/2013/04/27/a-never-ending-policy

[ajcnx]

7 minutes ago, blackcab said:

Thailand has enough small businesses. The country doesn't really need single person entities competing with Thai citizens. Could you imagine how many people from neighbouring countries would go down this route?

 

The rule isn't designed to make life difficult for digital nomads or people with a niche business with no local competition; it is designed to stop mass inwards migration from neighbouring countries.

 

If, on the other hand, you are going to genuinely employ Thai citizens and benefit more people than just yourself then the criteria of four employees is not that high.

 

If what you want is a visa you pay for then the solution is an Elite visa.

what my understanding is most of the people end up paying social securities for these ghost employees when genuinely there is no one actually working for them . There must be some genius in there system to lay good guidelines while not making it pain in the business 

[VocalNeal]

Hmm. I still think one has to show sufficient company income. 

[blackcab]

32 minutes ago, ajcnx said:

what my understanding is most of the people end up paying social securities for these ghost employees when genuinely there is no one actually working for them . 

 

My understanding is different to yours. I work in Thailand and I don't know anyone that does this. I'm sure it happens, but the cost of incorporating and running a company plus paying income tax each year makes it unnatractive.

 

Accountant and auditors fees (in Bangkok) would be 40,000 per year. Income tax on minimum 50,000 a month salary for the foreigner is 21,500 per year. Social fund for 4 workers on minimum salary and the foreigner would be about 14,500 per year. Work permit is 3,100 per year and immigration 1,900 per year, assuming you don't use an agent and do the entire application yourself, which is unlikely.

 

We are at 81,000 baht a year already, and you have only covered income tax for the foreigner, social fund, accountants fees, labour office and immigration fees. At this point you don't even have a functioning business, you have paid zero in salaries and you haven't even bought a pen to write with in order to make the business look realistic.

 

Or you can spend 100,000 a year for a 5 year Elite visa (but it's all payable in advance).

[VocalNeal]

^ So if we add in the 20,000-ish for the agent. Been there, done that.

Oh and you still have to show enough income to justify

[eyecatcher]

Yes those ridiculous costs and fees and the arbitary accountant just make it a no goer.

i started down that route with a legal partnership and found the accountants quarterly accounts were a mile apart from mine, the tax was painful and so was the 6k a quarter for uni students to sabotage my figures.

Having kicked all that crap into touch, we are still paying income tax, well the wife is on my share.

Very much doubt any of our freelance employees have ever paid income tax

[jonwilly]

I doubt that Thai and Frang logic will ever be the same.

Their country, Their rules to suit themselves, why should the care what frangs feel ?

 

john

[Pungdo]

In a word Protectionism

[DLock]

It's a good way to keep people employed, even if you don't really need them...

 

Most "small" businesses at the beginning at exactly that - small. The Founder does everything until he needs and can afford help with accounts or reception or cleaning, but he probably doesn't need these people on Day 1. 

 

And thats the problem, the system forces unnecessary expense and headcount that a new business doesn't need...yet. I'm sure a lot of potential businesses don't even start because of this. It stifles entrepreneurship.

 

...combine this with the 51% Thai ownership of said business, and they really try stack the deck against you from Day 1.

[lkn]

4 hours ago, jonwilly said:

I doubt that Thai and Frang logic will ever be the same.

Right, no “farang” would ever resort to legislation (or executive orders) in an attempt of protecting domestic businesses… ????

 

In Thailand though I sort of understand the logic behind why they resort to protectionism (both when it comes to labour market and land ownership), but protectionism is rarely a good solution, what they need is better education for their citizens so that they are not being threatened by foreign labour.

 

Unfortunately this is expensive and those in power are more interested in improving conditions for themselves and those on which they rely on (to remain in power).

 

You need a proper democracy with transparency and little to no corruption before those in power start to care about what is actually good for the broader population (because if they do not, someone else will replace them).

[ThaiBunny]

1 minute ago, lkn said:

You need a proper democracy with transparency and little to no corruption before those in power start to care about what is actually good for the broader population (because if they do not, someone else will replace them).

Unfortunately even in a democracy the default position for a business is to attempt to be a rent-seeker - https://www.investopedia.com/terms/r/rentseeking.asp

[gunderhill]

23 hours ago, blackcab said:

Thailand has enough small businesses. The country doesn't really need single person entities competing with Thai citizens. Could you imagine how many people from neighbouring countries would go down this route?

And be way  more competitive, showing the Thais right up.

[lkn]

4 minutes ago, ThaiBunny said:

Unfortunately even in a democracy the default position for a business is to attempt to be a rent-seeker

But it should only be successful if those in power are more dependent on money from lobby groups than the vote of the people, in which cause I would hesitate to call it a true democracy free from corruption.

 

[taninthai]

I’m just going down this route now,yes it’s a pain but probably worth it to stay right side of law.

my quote below.ignore the bottom figure that 77,000 that’s for other stuff ,the middle part is the monthly fees☹️

[manhood]

As I experience every shop, restaurant, hotel as more employees than ever are needed to keep the work/business running. I would dismiss the first couple of days 50%, within the next weeks 30% of the employees.

But I also understand, what kind of problem would start with millions unemployed young people. Chaos, more crimes.....

 

As there is no unemployment system in Thailand the only way.

Just I hate if the statistic of unemployment rate is the lowest in the world. Just another faked statistic.

 

And not more workers would come to Thailand for work if there wouldn't be any but as thais often NOT work, sure you need some who do the job!!! The consumers pay much more for everything the buy.... but lucky most don't realize, hehehe and yes don't even want to realize!

 

 

[scorecard]

On 5/4/2019 at 1:15 PM, blackcab said:

Thailand has enough small businesses. The country doesn't really need single person entities competing with Thai citizens. Could you imagine how many people from neighbouring countries would go down this route?

 

The rule isn't designed to make life difficult for digital nomads or people with a niche business with no local competition; it is designed to stop mass inwards migration from neighbouring countries.

 

If, on the other hand, you are going to genuinely employ Thai citizens and benefit more people than just yourself then the criteria of four employees is not that high.

 

If what you want is a visa you pay for then the solution is an Elite visa.

Been mentioned many times before here on TV and in other places about 'Thais don't want to work' etc., etc.

 

In my experience it's not that bad, I've worked with many Thai folks, professional and low-skilled folks who are genuine and reliable. Thailand is no different to many other countries. 

 

Plus there are plenty of farang who are lazy and unreliable, both working here in Thailand and in their own original countries. 

[Sydebolle]

Logic and Thailand cannot go in the same sentence. This explains, why the regional offices are in Singapore, Kuala Lumpur or Hong Kong. 

A German forwarder wanted to post five aliens (regional managers air, sea, combined,  business development and accounting) into Bangkok with three supporting staff (two secretaries at THB 90K/monthly each and one CPA-accountant for THB 120K/monthly). 

Did not take off, despite all five expats being in the 37% income tax bracket, apart from renting apartments, international schools for the kids etc. - they are happy in Singapore, albeit at even higher costs. No issues with registration, employment passes or stay visas. Thailand had lost out on this something like THB 10 million tax income easily. 

In the "alien" section of the labour department there were precisely two staff speaking something like English (another one was doing her nails while chatting on a speaker through Line); the Ministry of Commerce's list of registration requirement was another thing.

In all practicality, this country is sooooooooo behind the rest meanwhile - how sad!

[roquefort]

You are looking for logic in Thailand? How long have you been in the country?

[EricTh]

On 5/4/2019 at 1:20 PM, ThaiBunny said:

The same logic lies behind the long-standing Malaysian policy of having Malays forming a proportion of a company's employees https://www.economist.com/briefing/2013/04/27/a-never-ending-policy

No, they are not the same.

 

Thai policies is for foreigner who is not Thai citizen but  do not  discriminate between Thai citizens of different ethnics.

 

In Malaysia, the policy discriminate against Malaysian citizens of different ethnic groups and these people are not foreigners.