Hiring in Thailand: Foreign Business Act, Work Permits & Employer Compliance (2026)

Most guides to hiring in Thailand open with the work permit. That is the wrong end of the problem. The permit is an administrative exercise with a published checklist and a three-to-seven-day processing estimate. The question that decides whether your Thai hiring plan is legal, and whether it survives an audit three years later, is whether you are allowed to own the company doing the hiring.

Thailand runs a genuinely restrictive investment regime and then layers generous exemptions on top of it. The regime is the Foreign Business Act B.E. 2542 (1999); the exemptions are the Board of Investment, the DBD’s licensing power, and a 1966 treaty with the United States. Employers who understand the exemptions do well here. Employers who let an adviser assemble a Thai-majority shareholder register for them are now, in 2026, exposed in a way they were not five years ago.

Can you even own the entity? The Foreign Business Act and the 49% question

The Act does not cap foreign ownership at 49% as a general rule. It does something subtler: it defines a juristic person as foreign where at least half its shares are held by non-Thai natural or juristic persons. A foreign company under that test needs permission for any activity in the Act’s three annexed schedules. A company holding foreign ownership below half — in practice 49% — is simply Thai for the Act’s purposes and needs no permission at all.

• List 1 — strictly prohibited. Newspaper, radio and television businesses; rice farming, general farming and gardening; animal farming; land trading; and making Buddha images and monks’ alms bowls. No licence exists.
• List 2 — Minister of Commerce with Cabinet approval. National security (firearms, ammunition, explosives, armaments, domestic transport including domestic airlines), arts and culture, and natural resources (sugar manufacturing, salt farming, mining, wood furniture fabrication). Even with permission, Thai or non-foreign persons must hold not less than 40% of the capital — reducible to 25% by the Minister for reasonable cause — and at least two-fifths of directors must be Thai.
• List 3 — Director-General of the DBD. The list that catches ordinary commercial life: the hotel business, most agency work, and the vast residual category of other service businesses. The licence issues within 15 days after permission is granted.

Operating a restricted business without permission is criminal: up to three years’ imprisonment, a fine of up to THB 1 million, or both, with collaborating directors facing a further THB 100,000 to THB 1 million and the court able to order the business terminated or the company dissolved.

Two 2026 developments belong on the board’s radar. The Cabinet approved in principle on 12 May 2026 a draft Royal Decree amending the annexed lists and a draft Ministerial Regulation exempting certain businesses from licensing — including other agency businesses under List 3(11)(d) and eight additions under List 3(21), among them telecommunications, administrative, human resources and IT management services, treasury centre services and petroleum drilling. Both were still awaiting Government Gazette publication, so neither is yet law. Separately, the DBD discontinued walk-in and paper applications from 1 July 2026: all new partnership and limited company registrations are filed online through the DBD Biz Regist platform.

What are the three legitimate routes above 49% — and why nominees are not one of them?

The BOI’s own 2026 quick guide lists them plainly: a Foreign Business Licence from the DBD, a Foreign Business Certificate issued after BOI certification, or the Treaty of Amity for US investors only.

The BOI promotion is the route most foreign employers should price first, because the non-tax privileges often outweigh the tax holiday. Promoted projects can hold 100% foreign ownership, own land, bring in skilled workers and experts, remit foreign currency freely and access the Long-Term Resident visa track. The tax side runs to corporate income tax exemption of up to 13 years plus a 50% reduction for five years. Minimum investment capital is THB 1 million excluding land and working capital. The structural point most often missed: BOI privileges are granted on the project, not the entity, so a company can run a promoted project alongside non-promoted activity. Applications typically take two to three months, and a rejection can be appealed to the Secretary-General within 30 days.

The Foreign Business Licence is the honest route where no promotable activity exists — an approval process under section 17 rather than the administrative certification under section 12 that BOI companies use. Fees are published: THB 40,000–500,000 for List 2, THB 20,000–250,000 for List 3, THB 22,000 for a Foreign Business Certificate.

The Treaty of Amity lets companies ultimately owned by US nationals hold majority or whole ownership of most businesses without a Foreign Business Licence. The carve-outs are real — no land ownership, no deposit-taking banking, no fiduciary functions — and protection is not automatic: the company must be registered as required by section 11, and Thai authorities will not recognise Amity status until it is.

Which structure should you actually use — company, branch, representative office, BOI or EOR?

The representative office needs a specific warning. Since 2017 it no longer requires a Foreign Business Licence, which makes it tempting. But it may not engage in profit-making activity and is confined to approved functions such as sourcing and reporting to head office. It still needs a corporate tax ID, still files income tax returns and audited financial statements with the Revenue Department and the DBD, and its staff must obtain taxpayer cards. Using one to run a sales team is the commonest structural mistake foreign employers make here.

Incorporation itself is now wholly online: reserve the name on the DBD platform (valid 30 days), file the Memorandum of Association within 30 days of name approval with at least two founders signing, hold the statutory meeting, have shareholders pay at least 25% of par value per share, file the registration application within three months of that meeting, and obtain the corporate tax ID card within 60 days. Share par value must be at least THB 5, and VAT registration becomes compulsory within 30 days of annual sales exceeding THB 1.8 million.

How much registered capital do you need, and how many Thais must you hire?

Two arithmetic rules govern an ordinary Thai company’s expatriate headcount, and both attach to the permit rather than to the company.

The first is capital: THB 2 million of registered capital per work permit. Two permits require THB 4 million, five require THB 10 million. The widely cited reduction to THB 1 million where the foreign national is married to a Thai spouse is long-standing practice rather than a figure in the BOI’s 2026 guidance, which states the THB 2 million rule without that variant — confirm the current treatment with the Department of Employment before relying on it. What is not discretionary is the evidence: Immigration and the DOE want paid-up capital, not merely registered capital, while the incorporation rules oblige shareholders to pay only 25% of par value at registration. A company registered at THB 2 million with THB 500,000 actually paid in will struggle. Fund it properly and keep the bank credit advice.

The second is the ratio: four Thai employees per work permit, and they must be real employees registered with the Social Security Office. A consultancy wanting three expatriate partners therefore needs twelve Thai staff — usually the point at which the BOI route stops looking like paperwork and starts looking like arithmetic.

BOI-promoted companies are treated differently, under criteria rewritten with effect from 1 October 2025 for projects certified on or after 5 June 2025 and from 1 January 2026 for those certified earlier. Instead of a flat ratio, the BOI screens the position and its salary.

Chairman, President, CEO and Managing Director positions are exempt from the age and experience requirements, and positions approved for under six months escape both the salary minimums and the Thai personnel ratio. On headcount the BOI applies a workforce percentage rather than a per-permit ratio: manufacturing projects with more than 100 employees need Thai personnel to make up at least 70% of the workforce, while manufacturing projects under 100 employees and service businesses have no mandated Thai ratio at all. For a software or professional services business, that difference — no mandated ratio versus four Thais per expatriate — is the largest structural saving available in Thailand.

What has to be registered before the first payday?

Social Security Office. A new employer registers the establishment and its employees with the SSO, the long-standing deadline being 30 days from taking on the first employee, with later joiners notified within 30 days each. Contributions are 5% employer and 5% employee on a monthly wage base with a floor of THB 1,650 and a ceiling of THB 17,500 for 2026 to 2028 — a maximum of THB 875 per side per employee per month. Remittance falls due by the 15th of the following month, with an eight-day extension for electronic payment and a 2% monthly surcharge on late amounts. The ceiling is scheduled to rise to THB 20,000 and then THB 23,000 from 2032, so do not extrapolate THB 875 indefinitely.

Withholding tax. The company takes its corporate tax ID card from the Revenue Department within 60 days of incorporation. Under section 50(1) of the Revenue Code the employer withholds at every payment of employment income; section 52 requires remittance within seven days and section 59 a return identifying tax withheld per individual — in practice the monthly Form P.N.D.1, filed and paid by the 7th of the following month, with the Revenue Department’s standing electronic-filing extension moving the e-filing date later in the month. Confirm that date on the Revenue Department’s own calendar, because the extension is granted by notification and periodically renewed rather than written into the Code. Rates run from exempt on the first THB 150,000 of net income to 35% above THB 5 million; how they land on an expatriate payslip, including the 180-day residence test, is covered in our guide to Thai payroll tax and social security for expatriate employees.

Labour filings. The Labour Protection Act (No. 9) B.E. 2568 (2025) took effect on 7 December 2025. Under section 115/1 an employer with ten or more employees must file the employment and working conditions report within every January; the amendment removed the old mechanism under which inspectors posted the form out each December, so remembering is now entirely your problem. Work rules are required at the same ten-employee threshold and an employee welfare committee at fifty — both long-standing Labour Protection Act thresholds rather than 2026 republications, so verify the wording with the DLPW. The same amendment extended maternity leave to up to 120 days per pregnancy with employer-paid wages capped at 60 days (previously 98 and 45), added 15 days of post-partum childcare leave at 50% of wages under section 59/1 and up to 15 days of paid spousal support leave under section 59/2. Probation, notice and the rest of the contractual frame sit in our companion piece on Thai employment contracts and the Labour Protection Act.

Employee Welfare Fund. This is the genuinely new 2026 obligation, and it catches employers unaware. The EWF is a statutory scheme under the Labour Protection Act B.E. 2541 (1998) paying out when employment ends or on death. Employers with ten or more employees must generally participate unless exempt. Collection starts on 1 October 2026 at 0.25% from each of employer and employee, rising to 0.50% each from 1 October 2031, with no wage ceiling at all — making it the only uncapped statutory payroll contribution in Thailand. Submissions open through the EWF system from 1 November 2026; the first payment, for October 2026 payroll, is due by 15 November 2026, then by the 15th monthly. Late contributions attract a 5% monthly surcharge, and failing to submit information or giving false information can mean imprisonment of up to six months, a fine of up to THB 10,000, or both. The planning point: an employer is exempt for employees fully covered by a qualifying provident fund, so a fund that was optional in 2025 now has a compliance rationale as well as a retention one. The tax treatment of EWF contributions had not been officially confirmed at the time of writing.

How does the work permit actually work in 2026, and what must you keep notifying?

Visa first, permit second. The foreign national enters on a Non-Immigrant B sponsored by the Thai-registered company — THB 2,000 single entry valid 90 days, THB 5,000 one-year multiple entry, extendable up to a year — and the permit is applied for in Thailand. BOI-promoted companies use the Non-Immigrant IB route, valid up to four years and renewable. SMART S holders get two years and need no work permit for the certified business; Long-Term Resident visas run up to ten years through the BOI’s LTR Unit, though the Work from Thailand Professionals category cannot be used to apply for a permit. The full taxonomy from the employee’s side is in our Thailand work visa guide for expatriates.

Permits are issued by the Department of Employment, and since 13 October 2025 the process runs electronically: the DOE designated eworkpermit.doe.go.th and the DOE Foreigner application as the exclusive channels for all work permit applications and notifications. The paper blue book is gone for most applications, replaced by Form BorTor. 42/1, a standardised electronic permit or smart card that serves as official proof of authorisation — and which, usefully or awkwardly, does not show the employer’s name. BOI companies instead receive a Digital Work Permit inside the Thailand Digital Work Permit mobile application, the flow running from online company submission, to BOI review, to DOE review, to an in-person verification appointment, then payment and approval. Documentation is the usual set — company registration, tax records, a letter confirming the position — with processing estimated at three to seven days and completion expected within 90 days or before the non-immigrant visa expires.

Then the continuing duties begin, and this is where employers leak compliance. The permit must be kept at the workplace and updated when the job role or the employer changes. A promotion that changes the title, a transfer that changes the described duties, a move to a new registered address: each is notifiable, cheap to notify and expensive to have discovered. The TM30 notification of a foreign national’s place of residence and the 90-day report of continued stay are formally duties of the house master or the individual, but a competent Thai employer manages both centrally, because a missed 90-day report lands on the employee’s immigration record and therefore on your permit renewal. THIM, the Immigration Bureau application launched in August 2026, is a voluntary platform still in trial giving access to Thailand Digital Arrival Card registration and identity verification; it is explicitly not an immigration permission and does not replace the existing forms, so keep alternative filing routes running and retain confirmation references.

Who inspects you, and what does getting it wrong cost?

The Labour Inspectorate of the DLPW examines wages, hours, leave, work rules and the annual section 115/1 report, driven largely by complaints, and the amended reporting regime has handed it a clean paper trail. Minimum wage is the common finding: daily rates published by the Ministry of Labour run from THB 400 in Bangkok, Chachoengsao, Chon Buri, Phuket, Rayong and Ko Samui — that top rate applying to specified hospitality categories — down to THB 337 in Narathiwat, Pattani and Yala, with most provinces clustered between THB 345 and THB 372.

The Immigration Bureau and the Department of Employment run joint workplace inspections. The published consequence of a foreign national working without the required visa and permit is fines, deportation and blacklisting, and the Royal Decree on the Management of Foreign Workers’ Employment imposes separate fines on the employer and on the worker, escalating on repeat offences and carrying a period of disqualification from employing foreign nationals. The precise 2026 fine ladder sits in that Royal Decree as amended and was not published in English on the Department of Employment’s current pages at the time of writing — confirm the figures with the DOE rather than relying on a number you read somewhere. The direction is not in doubt: liability falls on both sides, the employer’s exposure is per foreign national rather than per incident, and the employee loses the right to work in Thailand.

The Revenue Department and the SSO reconcile against each other, and this is the quiet trap. The four-Thai-employees condition is verified against SSO registrations. A company whose P.N.D.1 shows twelve salaries while its SSO filings show four insured employees has volunteered a question it does not want asked.

What does a Thai hire actually cost on top of gross salary?

Less than almost anywhere in Asia, and the social security ceiling is the reason. Here is the employer-side stack at two salary points, on 2026 values.

Read the statutory row carefully. At the ceiling of THB 17,500 a month the employer pays THB 875 plus about THB 44 of EWF, roughly 5.25% of gross. At THB 150,000 the same obligations come to 0.83%. Thai statutory on-costs are not merely low, they are steeply regressive, and they effectively disappear as a planning factor at expatriate salary levels. An employer used to European social charges of 20–40% should resist treating that saving as margin.

It is not margin, because the private layer must do the work the state does not. A provident fund is not mandatory — it is established voluntarily under the Provident Fund Act, with the employer rate set in the fund rules and conventionally matched to the employee’s — but it is market standard for professional employers, and from 1 October 2026 it also exempts covered employees from the EWF. The 5% match above is a modelling assumption, not a statutory rate. Group medical cover is likewise discretionary and likewise expected, and for a hire with dependants it is often the largest line above salary. State benefits are improving: the Cabinet approved a draft Ministerial Regulation on 14 July 2026 introducing the CARE old-age pension formula, which averages the pension wage base across the whole contribution history rather than the final 60 months and, in the government’s worked example, lifts an estimated monthly pension from THB 2,040 to THB 4,930. A pension of that order still does not substitute for a funded retirement benefit at professional salaries.

The liability nobody models is severance. Statutory severance runs from 30 days’ wages at 120 days to under one year of service, to 90 days at one to under three years, 180 days at three to under six, 240 days at six to under ten, and 300 days at ten to under twenty years. Three hundred days’ wages on a THB 150,000 salary is roughly THB 1.5 million payable on termination without cause — a figure that dwarfs a decade of social security contributions, and the one that should drive your probation and performance-management discipline. The fuller build-up of allowances, housing and schooling sits in our analysis of the total cost of employment and relocation in Thailand.

Thailand’s bargain, stated plainly: a restrictive ownership regime with well-marked exits, moderate and now largely digital administrative friction, very light statutory payroll cost, and a severance regime that punishes careless hiring. Get the entity right and the rest is process.

Frequently Asked Questions