Employing in Thailand

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Expanding into
Thailand

Expanding to countries such as Thailand – which is characterized by a highly trained and educated workforce, multifaceted employment and tax laws, a robust infrastructure network, and leading sectors in agriculture, industry, automotives, services, electronics, and tourism – can bring both excitement to the possibilities, but also significant stress to ensuring the entity with the country’s rigorous legal structures and laws.

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Global Expansion is a step to make for any business, regardless of your goal. But the opportunities that can come with an expansion can be stimulating as well as intimidating and confusing, especially when you consider all of the registration procedures that need to be done and the documentation required.

Going at it without the proper support can increase the costs, time and risks involved.

The legwork and potential red tape can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, primarily through our Employer of Record (EOR) framework.

It can be best utilised when businesses are just beginning their expansion process and require more information before incorporating an entity and fully establishing themselves in that market.

Country EOR Guide - Bradford Jacobs

Download our Guide to Thailand

Learn all about expanding into Thailand and see what we can do to make your expansion easier.

Download our Guide to Thailand

Learn all about expanding into Thailand and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs

Hiring Staff
in Thailand

Hiring Staff
in Thailand

The Main Sectors of the Thai Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

A significant part of Thailand’s economy is the services sector, which contributes nearly half of the total national GDP (44.7%). The sector can be divided into a number of specialized industries, including finance, health, tourism and hospitality, retail, communications, and banking. These services provides jobs for 37% of the formal labor force and are considered the key to future economic growth in Thailand.

Tourism is one of the strongest industries within the services sector, producing approximately 17.7% of the total GDP, and has demonstrated steady growth over the last few years.

The industry sector (the majority of which is managed by the SMEs described above) is one of the largest contributors to Thailand’s total GDPO, with a value of 43.9%. Within the industrial sector, manufacturing is the most productive, contributing 34.5% of the GDP. Additionally, the industry sector is responsible for providing approximately 14% of formal jobs in Thailand.

On average, Thailand produces roughly two million vehicles every year, making it the largest automotive industry in Southeast Asia. The majority of cars and trucks manufactured in Thailand are international brands, like Ford, Volkswagen, Mercedes, and BMW. In addition to cars and trucks, Thailand also produces and exports automotive parts. The combined export value of these three types of goods was reported at $23.74 billion. Taken individually, trucks comprise 4.7% of total exports, cars make up 3.7%, and automotive parts make up 2.7% of the total exports leaving Thailand.

The electronics manufacturing industry in Thailand produces the largest percentage of exported goods, and accounts for 15% of total exports leaving the country. These exports are worth approximately $55 billion. Additionally, this specialized industry provides 12.2% of manufacturing jobs in Thailand. Within this category, computers and integrated circuits are the two most widely exported goods.

Computers make up 7.9% of all exports, at a value of $18.3 billion, while integrated circuits make up 4.2% of all exports, at a value of $9.8 billion. Thailand is also the world’s second largest producer of hard disk drives.

Banking in Thailand officially started in 1906 and has expanded together with the rise of trade. The continuous growth has led to an established and modernized banking sector, with the Bank of Thailand founded as the country’s central bank.

The expansion of Thailand’s banking sector has brought about greater access to financial systems as seen from the number of automated teller machines along with being one of the leading countries in the Asia Pacific with a high banking population.

Thailand’s banking sector now provides a variety of financial services, depending on the types and demands of clientele.

The Main Sectors of the Thai Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

A significant part of Thailand’s economy is the services sector, which contributes nearly half of the total national GDP (44.7%). The sector can be divided into a number of specialized industries, including finance, health, tourism and hospitality, retail, communications, and banking. These services provides jobs for 37% of the formal labor force and are considered the key to future economic growth in Thailand.

Tourism is one of the strongest industries within the services sector, producing approximately 17.7% of the total GDP, and has demonstrated steady growth over the last few years.

The industry sector (the majority of which is managed by the SMEs described above) is one of the largest contributors to Thailand’s total GDPO, with a value of 43.9%. Within the industrial sector, manufacturing is the most productive, contributing 34.5% of the GDP. Additionally, the industry sector is responsible for providing approximately 14% of formal jobs in Thailand.

On average, Thailand produces roughly two million vehicles every year, making it the largest automotive industry in Southeast Asia. The majority of cars and trucks manufactured in Thailand are international brands, like Ford, Volkswagen, Mercedes, and BMW. In addition to cars and trucks, Thailand also produces and exports automotive parts. The combined export value of these three types of goods was reported at $23.74 billion. Taken individually, trucks comprise 4.7% of total exports, cars make up 3.7%, and automotive parts make up 2.7% of the total exports leaving Thailand.

The electronics manufacturing industry in Thailand produces the largest percentage of exported goods, and accounts for 15% of total exports leaving the country. These exports are worth approximately $55 billion. Additionally, this specialized industry provides 12.2% of manufacturing jobs in Thailand. Within this category, computers and integrated circuits are the two most widely exported goods.

Computers make up 7.9% of all exports, at a value of $18.3 billion, while integrated circuits make up 4.2% of all exports, at a value of $9.8 billion. Thailand is also the world’s second largest producer of hard disk drives.

Banking in Thailand officially started in 1906 and has expanded together with the rise of trade. The continuous growth has led to an established and modernized banking sector, with the Bank of Thailand founded as the country’s central bank.

The expansion of Thailand’s banking sector has brought about greater access to financial systems as seen from the number of automated teller machines along with being one of the leading countries in the Asia Pacific with a high banking population.

Thailand’s banking sector now provides a variety of financial services, depending on the types and demands of clientele.

Commercial Laws in
Thailand

Internationally minded companies hiring employees in Thailand must operate within a strict framework of legislation.

Most aspects of employment regulations in Thailand are based on the Employment Protection Act, the Employment Relations Act and the Civil and Commercial Code, with some aspects set by provinces

  • The Revenue Department – The Revenue Department collects, administers, and develops six types of taxes: personal income tax; corporate income tax; value added tax; specific business tax; stamp duties; and petroleum income tax. These taxes combined account for more than 80 percent of total government revenue. The department operates 12 regional revenue offices, 119 area revenue offices, and 850 area revenue branch offices throughout the country as well as 14 bureaus at its headquarters. The department collaborates with international organisations including the International Monetary Fund, the World Bank, and the International Bureau of Fiscal Documentation [fr] to ensure international best practices for tax administration and policies
  • The Department of Labour Protection and Welfare (DLPW) – monitors compliance with the law and provides support towards the improvement of working conditions and the working environment. The DLPW has several functions including:
    • to establish and develop labour standards
    • encourage and supervise workplace compliance with national laws and international labour standards
    • to ensure worker protection, rights, and benefits in the formal and informal economy
    • to promote and develop a system on occupational safety, health, and the working environment
    • to promote, develop and disseminate knowledge and understanding of labour standards, labour protection, occupational safety, labour relations, state enterprise labour relations and labour welfare
    • to prevent and resolve labour disputes and industrial unrest

General requirements applying to all contracts include:

  • The Employment Protection Act and the Civil and Commercial Code do not specify that a contract must be written, but it is advisable to put the key terms in writing as they form the working conditions
  • If the contract is in English, for example, there should be a Thai translation if the employee is local. The Thai-language contract will be used in any legal disputes
  • The Employment Protection Act says blue- and white-collar workers have the same protection under the law
  • Employment contracts are generally either open-ended and indefinite, or fixed term
  • Fixed-term contracts cannot include a probationary period and must specify an end date. If the end date is exceeded, it can be deemed to have become open-ended. Fixed-term contracts do not require an ‘advance notice’ of termination
  • Probation periods are permitted but usually do not exceed 119 days, as employees are entitled to severance pay once they have worked for 120 days
  • Employers are recommended to put contracts in writing as they include the working conditions, but this is not legally required by the Civil and Commercial Code or the Employment Protection Act.
  • Employers and employees are free to agree terms for their contract, but the Civil Code does not allow contracts that are disproportionately advantageous to the employer.

Commercial Laws in
Thailand

Internationally minded companies hiring employees in Thailand must operate within a strict framework of legislation.

Most aspects of employment regulations in Thailand are based on the Employment Protection Act, the Employment Relations Act and the Civil and Commercial Code, with some aspects set by provinces.

  • The Revenue Department – The Revenue Department collects, administers, and develops six types of taxes: personal income tax; corporate income tax; value added tax; specific business tax; stamp duties; and petroleum income tax. These taxes combined account for more than 80 percent of total government revenue. The department operates 12 regional revenue offices, 119 area revenue offices, and 850 area revenue branch offices throughout the country as well as 14 bureaus at its headquarters. The department collaborates with international organisations including the International Monetary Fund, the World Bank, and the International Bureau of Fiscal Documentation [fr] to ensure international best practices for tax administration and policies
  • The Department of Labour Protection and Welfare (DLPW) – monitors compliance with the law and provides support towards the improvement of working conditions and the working environment. The DLPW has several functions including:
    • to establish and develop labour standards
    • encourage and supervise workplace compliance with national laws and international labour standards
    • to ensure worker protection, rights, and benefits in the formal and informal economy
    • to promote and develop a system on occupational safety, health, and the working environment
    • to promote, develop and disseminate knowledge and understanding of labour standards, labour protection, occupational safety, labour relations, state enterprise labour relations and labour welfare
    • to prevent and resolve labor disputes and industrial unrest

General requirements applying to all contracts include:

  • The Employment Protection Act and the Civil and Commercial Code do not specify that a contract must be written, but it is advisable to put the key terms in writing as they form the working conditions
  • If the contract is in English, for example, there should be a Thai translation if the employee is local. The Thai-language contract will be used in any legal disputes
  • The Employment Protection Act says blue- and white-collar workers have the same protection under the law
  • Employment contracts are generally either open-ended and indefinite, or fixed term
  • Fixed-term contracts cannot include a probationary period and must specify an end date. If the end date is exceeded, it can be deemed to have become open-ended. Fixed-term contracts do not require an ‘advance notice’ of termination
  • Probation periods are permitted but usually do not exceed 119 days, as employees are entitled to severance pay once they have worked for 120 days
  • Employers are recommended to put contracts in writing as they include the working conditions, but this is not legally required by the Civil and Commercial Code or the Employment Protection Act.
  • Employers and employees are free to agree terms for their contract, but the Civil Code does not allow contracts that are disproportionately advantageous to the employer.

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