Thailand is paying closer attention to prohibited foreign businesses

For many years, it was not unusual for foreigners and foreign companies, despite the threat of jailtime, to find ways around the laws in Thailand prohibiting them from working as a sales or service provider in the kingdom. This wasn’t just something done by private businesses such as bars or other businesses run by ‘strawmen’ who are usually friends from relevant circles.

Even well-known companies abused the so-called ‘representative offices’, which are forbidden from all types of trade activity, including order processing as well as preparatory meetings. Most people figured they could avoid any penalties, as the orders were technically executed by the parent company abroad.

“Don’t correct a fool, or he will hate you; Correct a wise man, and he will appreciate you.”
DAILY DOSE OF WISDOM

 

A similar error in evaluating the legality of their actions is made by companies who hire a Thai employee, either putting them on salary via payroll services or paying based on commission. There are even foreigners out there living blissfully in Thailand on multiple-entry business visas who just keep on buying up the lot until their heart’s content.

Such a violation of Thailand‘s Foreign Business Act could result in a hefty fee for anyone engaged in or supporting foreign businesses, trade or services within the kingdom. Not only do companies and employees, who are often totally oblivious to the matter, risk facing jailtime or monetary fines; worse than that, they may end up listed as an unlawful operating site of the parent company, meaning all revenue from the parent company’s products would become taxable, also potentially entailing disputes with German and Thai financial authorities.

The “Good guys in – bad guys out!” banner displayed above the Thai immigration counters is a further indicator of the government’s visible resolve over the past few months to consistently put a stop to all forms of illegal activity committed by foreigners, foreign companies or rep offices in the kingdom.

Together with their marketing department and their specialized legal partners, the consulting team at Sanet (Thailand) Co., Ltd. provides tailor-made and legally viable sales advise, even to smaller companies who cannot or do not want to muster up the around 2.6 million EUR in capital needed for a commercial license (more information available at info@sanet.co.th and www.sanet.eu).