Establishing your company in Thailand does not have to be challenging. By choosing a local partner to help you get set up and attend to all your HR needs, your company can focus on growth and stability without the administrative costs and challenges accompanying expansion.
A PEO in Thailand is a safe and simple way to offer compliance assured HR functions for employees in an overseas target market and gives companies a way to hire and manage employees in less than 48h.
An Employer of Record in Thailand offers employment outsourcing solutions to take care of HR and administrative responsibilities and streamline the global expansion process. INS Global is a provider of third-party EOR in Thailand solutions to companies looking to improve and accelerate their international mobility.
A Professional Employer Organization (PEO) is a services provider that helps businesses get set up in a new region while avoiding administrative hurdles.
Through a Thailand PEO your enterprise can easily hire staff and start business operations in the country.
Setting up a company in a new country means that you are required to follow to be compliant. If your business is not fully compliant, you could be exposed to risks that may affect your Thailand operations. PEO experts stay updated with all the regulations and local processes involved with company setup and business operation.
Many companies find the process of beginning operations in a new market to be longer and more costly than initially anticipated. A PEO company is familiar with the setup process and helps you achieve your goals without unnecessary delays.
INS Global not only assists with setup in Thailand, but we also provide additional support with your employees’ payroll. By understanding local regulations regarding employment and taxation, we can report on wages, track employee hours, and withhold tax and social security contributions.
Outsourcing this important function negates the need to handle the administration yourself. This gives you more time and energy to focus on business growth.
By partnering with a professional outsourcing provider, you can make use of skills and expertise that would otherwise require hiring multiple new employees or teams.
When thinking about getting started in Thailand, the administrative part of the setup is more than often overlooked. Companies may not fully understand local procedures or best practices, which can make things costlier and more time-consuming than expected.
Why should your business not incorporate its own entity?
The Advantage in Figures
PEO/EOR
Company Incorporation
Price
80% Less Expensive
Market Entry
2-5 Days
6 Months
Manuel Ramos
TERAO ASIA
Managing Director
We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.
While these two services are often discussed in relation to one another, it’s helpful to know the differences to understand better which may be better for your requirements.
INS Global offers both of these services according to your needs. Contact us today to learn more about which may be better for your company.
The law in Thailand does not require that employment contracts be made in writing. However, it is always considered good practice to have a written agreement to avoid later issues.
An employment contract can be concluded in another language in Thailand, but for work permits to be issued, a copy needs to be submitted in Thai to the Thailand Department of Employment.
The standard working hours in Thailand are 8 hours a day and a maximum of 48 hours a week. The working hours are set out in the Labor Protection Act, which also set out other basic legal protections for employees working in Thailand.
For employees who work in an environment deemed dangerous to their health and safety, their working hours cannot exceed more than 7 hours a day or a maximum of 42 hours a week.
Employees are able to work overtime for a maximum of 36 hours per week. Overtime rates vary according to the specific day:
Employees in Thailand who have worked for at least a year are entitled to a minimum of 6 fully paid annual leave days. An employer can grant additional leave days according to the labor contract provisions.
Unless otherwise provided by the employment contract or employee handbook, unused annual leave days may be accumulated. Leave entitlement is provided for in the Labor Protection Act.
There is no limit on sick leave in Thailand. However, only 30 days of paid sick leave are provided for in a calendar year. If an employee has taken more than 3 consecutive sick days, an employer can request the employee to produce a medical certificate.
Female employees can take up to 98 days of maternity leave in Thailand. During that time, the employer is required to provide the employee’s full salary for up to 45 days, whereafter the employee is eligible to receive a lump-sum payment from the social security system, which is equivalent to full pay.
According to the Labor Protection Act, there are no provisions for mandatory paternity leave.
The Thailand Revenue code requires personal income tax payments to be made on any income sourced in Thailand from both residents and non-residents. Tax residents in Thailand are also required to make tax contributions on any income that is sourced outside of Thailand.
A person is considered a tax resident in Thailand if they are physically present in Thailand for 180 days or more in a calendar year. The maximum tax rate payable, set at 35%, is applicable to income exceeding 5 million Thai baht.
With social security, both resident and non-resident employees who receive their income from a Thai employer are required to make social security contributions.
The contributions which are made to the Thailand social security fund are made in equal contributions from both employers and employees (5% of the employee’s salary, to a maximum of TBH 750 per month).
Social security contributions are withheld at the source, and payment is made by the employer when an employee receives their income.
Professional EOR services in Thailand typically cost a percentage of the co-employed team members‘ monthly salary. This cost takes care of the HR functions required to ensure compliance with all local employment requirements.
Yes, a Thailand EOR is a safe, legal, and efficient way to manage employer responsibilities in Thailand without the need to build a separate company structure in the company. This is because an EOR uses an already–established legal entity with expert HR support.
Beyond the security of having assured HR compliance services from a professional provider, an EOR gives your employees access to the full range of employees benefits in Thailand (with the potential to benefit from even greater benefits packages), total legal protection, as well as a timely and accurate payment every month.
Much like when working with an umbrella company, independent contractors who work with their clients through a Thai EOR structure can gain access to many or all of the same employee benefits as traditional employees while still being in total control of the way they work.
Our team of experienced recruitment specialists can find you the best local talent in Thailand using online and offline professional networks, their in-depth knowledge of local business resources and benchmarks, and a total commitment to compliant recruiting practices.
Yes, a truly global EOR services provider gives you total compliance–assured employment outsourcing support that takes all local, regional, and national laws into account. This means you can hire staff across Thailand, knowing you’re covered in terms of every local benchmark and requirement.
Some PEO or EOR service providers in Thailand may limit the amount of staff you can hire at one time, or require you to meet certain minimum thresholds. However, INS Global knows that your international expansion strategy may require you to scale up or down quickly at any time, so we give you the flexibility you need to pursue your goals by hiring as many employees as you need.
The total hiring cost in Thailand should take direct costs (salary, recruitment service fees, and any signing bonuses) into account alongside indirect costs such as monthly tax and social insurance contributions, bonuses, and incentive plans.
Thai PEO services give you a great way to avoid the complications of setting up a company in Thailand, thus not requiring you to have a physical address in the country. For the happiness of your employees, it’s still recommended that you give them the option between a physical shared workspace or the chance to work remotely when and where appropriate.
Yes, where local employment laws, tax structures, or employee benefits differ for Thai or foreign nationals, we ensure total compliance assurance matching employees with their relevant requirements.
EOR and PEO solutions are a perfect way to ensure safe and efficient employment for overseas workers for companies of all sizes, from SMEs to multinational corporations. This is because they fill in for otherwise complex in-house HR requirements that easily scale up alongside increased employment needs as a company expands internationally.
The legal expertise provided by PEO and EOR services is perfect for companies in a variety of sectors that either lack their own structures in a target country or want to prevent cost-scaling concerns while focusing on growth.
Staffing firms and umbrella businesses are two examples of third parties that may be used to directly or indirectly engage independent contractors. You might also be able to identify the best contractors to fit your needs through networking, job boards, social media, trade organizations, and other channels.
The majority of independent contractors in Thailand either operate as freelancers or run small enterprises through which they accept payment from customers. Thai law also requires that contractors be hired under a work agreement rather than an employment contract.
Before work starts, an independent contractor can be required to provide a CV, portfolio, verified references, and possibly a signed NDA.
Payroll in Thailand can be made according to an employee’s hourly, daily, weekly, or monthly pay rate and should be done at least once per month. All details of an employee‘s pay and all employer-managed tax and social security deductions should be included in a payslip for each pay period.
The minimum wage in Thailand is calculated at a daily rate and depends on the type of job and seniority of the worker. In 2023, minimum wage rates vary from 354 baht per day all the way up to 700 baht per day for certain skilled workers.
Those moving to Thailand to live and work must have a work permit in addition to a working visa. Typically, workers apply for a Non-Immigrant B (Business) visa from their home country which allows them to enter Thailand for up to 90 days (or 1 year if the applicant is to be employed by a local company). During this time, the worker can then apply for a work permit which is valid for up to a year.
Please note, companies in Thailand wishing to employ foreigners must meet specific requirements of registered capital and the number of Thai employees.
Thai employers are obliged to manage tax and social security contributions on behalf of their employees as part of the payroll process. They are also required to make an employer’s contributions of an equivalent of around 5% (up to a maximum of 750 baht per month) of the employee’s wage towards their social security funds.
According to Thai law, all workers (whether fixed-term, indefinite–term, or casual) are eligible for many of the same mandatory employee benefits that come from making social security payments. These include the usual benefits such as health insurance, paid parental leave, worker’s compensation, and a pension fund.
Employment contracts in Thailand can be amended in 3 circumstances, either through a written agreement signed by both employer and employee, through the agreement of the employer and the employee’s labor union, or solely by the employer if the amendments result in better working conditions for the employee.
Thailand operates a free universal coverage scheme for healthcare, with foreigners holding jobs in the country also being eligible for the same treatment. Co-payments were removed in 2006, with medications now being the only out-of-pocket cost. Private healthcare plans are also available to supplement the public healthcare system or provide coverage for those without a Thai contract.
Notice periods in Thailand are typically 1 month or payment in lieu.
Severance pay is equivalent to 15 days of an employee’s current salary per year of service. This payment cannot exceed the equivalent of 1 year of the employee’s salary.
Thailand’s Labor Protection Act is overseen at local, regional, and national levels by different government bodies. Typically, labor disputes are managed through the discussion of an employee’s labor union and company representatives.
Most regions in Thailand celebrate 13 paid holidays per year, with these days not being considered part of an employee’s paid annual leave.