Thailand cracks down on foreign employment

Recently, Thailand’s Minister of Labour, Phiphat Ratchakitprakarn, issued an order to intensify the crackdown on illegal foreign workers. The focus is on jobs legally reserved for Thai nationals. From October 1, 2023, to June 13, 2024, authorities uncovered 4,437 cases of illegal employment of foreign nationals.

This signals that Thailand’s enforcement against illegal foreign labour has entered a high-pressure phase. In fact, this move follows the discovery of a large number of illegal employment cases over the past nine months. Furthermore, it exposes how some employers have attempted to cut corners and evade proper legal procedures in the hiring process. The Minister has clearly instructed all relevant agencies to coordinate enforcement efforts, aiming not only to address public concerns about fair employment, but also to safeguard the rights and interests of Thai workers.

Thai law prohibits foreign nationals from working in certain occupations protected for local Thai workers. Authorities generally categorize these restricted occupations into three groups.

Category 1: Completely Prohibited for Foreigners

These are occupations strictly reserved for Thai citizens:

1.Street vendors, hairdressers/barbers

2.Traditional Thai massage therapists

3.Drivers, secretaries, and other administrative roles

Category 2: Skilled Trades with Conditional Restrictions

Foreigners may be allowed under specific conditions, but restrictions apply:

1.Bricklaying, carpentry, and general construction work

2.Agricultural labor and fishery-related work

Category 3: Shop sales and general labor

While in some cases work permits may be granted, there are numerous limitations depending on the nature of the work and location.

To enforce these rules, the Ministry of Labour will work in coordination with the police and the Department of Employment. Specifically, they will employ a strategy of identifying, prosecuting, fining, and deporting violators.

At the same time, the government urges all employers to follow Thailand’s Employment Law strictly. Employers must hire foreign workers legally to avoid serious legal consequences for breaking the law.

Chinese investment factories focus on rectification

In recent years, a surge of Chinese industrial enterprises has entered Thailand, bringing in significant investment while also quietly reshaping the country’s industrial landscape. Recently, Thailand’s Ministry of Industry launched a special enforcement campaign codenamed “Sud Soi” (which translates to “Farewell” in Thai), aimed at cracking down on illegally operated factories primarily backed by Chinese capital. The ministry is particularly focused on upstream industries, especially steel production and metal recycling. Many of the problematic factories use outdated technologies to manufacture low-quality steel and sell it at ultra-low prices, which not only disrupts the domestic market but also creates severe environmental hazards.

To address these growing challenges, the Ministry of Industry has implemented a series of strong regulatory actions:

1.Suspension of operating licenses for a large number of recycling and waste processing companies;

2.Establishment of new regulatory standards for the steel, plastics, and rubber industries;

3.Drafting of new industrial waste management laws to reduce risks to communities and public health;

4.Explicit rejection of the regulatory exemptions granted under the former NCPO government, which had created governance loopholes in industrial zones.

https://www.dbd.go.th

Compliance experience in Thailand

Currently, the Thai government is exerting dual pressure on illegal foreign workers and unlawful foreign-owned businesses, with the regulatory environment becoming increasingly strict. For all companies investing and operating in Thailand, compliance is no longer a “choice” but a critical “lifeline” determining whether the business can continue. To achieve compliance, companies should focus on the following areas:

I. Employment Compliance

1.Specifically, foreign employees must hold valid visas and work permits, with job roles matching the permit specifications.

2.Furthermore, it is strictly prohibited to employ foreigners in positions listed on Thailand’s “Prohibited Occupations for Foreigners” list.

3.In addition, companies should proactively establish personnel screening and registration systems to avoid inadvertently employing illegal workers.

II. Licensing and Corporate Compliance

1.Before investing in or establishing a factory, ensure the company’s registration type, shareholding structure, and business scope comply with the Foreign Business Act and Industrial Act requirements.

2.Avoid using nominee arrangements or other circumvention tactics to bypass shareholding restrictions or industry entry thresholds.

III. Product Compliance

1.Ensure products meet quality and safety standards issued by authorities such as Thailand’s TISI, FDA, or the Industrial Standards Institute.

2.Prevent dumping of low-quality products that could disrupt market order and lead to legal liability.

If you would like to register a company in Thailand or learn more about company registration matters, feel free to contact WELLION for a consultation!