Starry Research | Employment Compliance Series Issue 1: Key Points on Hiring Foreign Employees (Part One)

As Chinese enterprises accelerate their expansion into the Southeast Asian market, Thailand’s importance as a regional economic hub is becoming increasingly prominent. However, in the process of localized operations, employment compliance issues are becoming a pain point and source of risk that many enterprises cannot afford to ignore. From the execution of employment contracts and payment of social security to the legality of termination procedures, any misstep may trigger labor arbitration, administrative penalties, or even reputational damage. To this end, we are launching our “Employment Compliance” series, grounded in Thailand’s Labour Protection Act and other core regulations, and combined with judicial cases and practical scenarios, to systematically analyze the key compliance points for  enterprises operating in Thailand across multiple dimensions—including recruitment management, compensation and benefits, working hours, and cross-border terminations—so as to help  enterprises build a localized employment framework that balances efficiency with risk management.

As the first issue of this series, this article will primarily introduce the core rules governing the employment of foreign employees by  enterprises in Thailand, as well as the restrictive provisions on the types of work that foreign employees may perform.

I. Core Rules for Employing Foreign Employees in Thailand

Enterprises employing foreign employees in Thailand must comply not only with the general rules set out in Thailand’s Labour Protection Act B.E. 2541 ("Labour Protection Act"), Labour Relations Act B.E. 2518 ("Labour Relations Act"), and Social Security Act B.E. 2533 ("Social Security Act"), but also with Thailand’s regulations on the entry and stay of foreign employees, work permits, and restrictions on the scope of work. Thereinto, the core rules to be noted include, but are not limited to:

·       Immigration Act, B.E. 2522 ("Immigration Act");

·       Decree on the Management of Foreign Workers Employment B.E. 2560

·       Announcement of the Ministry of Labour Re: Prescription of Occupations Prohibited to Foreigners

II. Restrictions on Work Performed by Foreign Employees in Thailand

For enterprises in Thailand that employ foreign employees, before learning how to process employment and permit procedures, they should first understand the restrictive provisions of Thai laws and regulations regarding the types of work that foreign employees are permitted to perform—that is, which occupations foreign employees are prohibited from engaging in.

Pursuant to the Announcement of the Ministry of Labour Re: Prescription of Occupations Prohibited to Foreigners updated and issued by the Thai Ministry of Labour in 2020, the Thai Ministry of Labour has established four categories of work lists, each specifying the circumstances under which foreign nationals are prohibited or restricted from engaging in certain occupations and types of work in Thailand.

(I) List 1: Occupations That May Only Be Performed by Thai Nationals, Strictly Prohibited to Foreigners Throughout Thailand

List 1 specifies 27 categories of occupations that are reserved exclusively for Thai nationals and are strictly prohibited to foreigners throughout Thailand, including:

·       Wood carving

·       Driving motor vehicles, non-mechanically driven transport vehicles, or domestically operated mechanically driven transport vehicles, except for piloting international aircraft or operating forklifts

·       Auctioneering

·       Cutting and polishing of diamonds or gemstones

·       Barbering, hairdressing, or beauty care services

·       Hand weaving

·       Weaving mats or making utensils using reeds, rattan, hemp, straw, bamboo, bamboo strips, grass, chicken feathers, coconut leaf stalks, fiber, wire, or other materials

·       Handmade mulberry bark paper making

·       Lacquerware making

·       Thai musical instrument making

·       Niello ware making

·       Goldsmithing, silversmithing, or rose gold work

·       Bronze casting

·       Thai-style doll making

·       Alms bowl making

·       Handmade silk product making

·       Buddha statue making

·       Making paper or cloth umbrellas

·       Brokerage or agency work, except for brokerage or agency work related to international trade or investment

·       Thai traditional massage

·       Hand-rolling of cigarettes

·       Tour guiding or sightseeing tour operation

·       Street vending

·       Hand typesetting of Thai characters

·       Hand reeling and twisting of silk

·       Clerical or secretarial work

·       Legal services or litigation representation, except for: (A) serving as an arbitrator in the performance of duties; (B) providing assistance or representation in arbitration proceedings where the applicable law is not Thai law.

(II) List 2: Occupations Prohibited to Foreigners Throughout Thailand, Except Where Foreigners Are Permitted to Work Pursuant to Thailand’s Obligations Under International Agreements or Legal Treaties

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List 2 specifies 3 categories of occupations. These occupations may only be performed by foreigners pursuant to international agreements and legal treaties binding on Thailand; otherwise, they are reserved for Thai nationals only. Specifically, these include:

1. Accounting-related occupations

Including: controlling, auditing, and managing, or providing accounting services.

Exceptions: (1) Temporary internal auditing work; (2) Work performed pursuant to international agreements or obligations binding on Thailand, where the relevant professional association has issued a qualification certification.

2. Civil engineering work

Including: civil engineering work involving consulting, project planning, design and calculation, construction supervision, manufacturing, inspection, system organization  management, research, and testing.

Exceptions: (1) Professional engineers registered under the ASEAN Mutual Recognition Arrangements and other international agreements on cross-border engineering services; (2) Persons licensed for practicing the regulated  in the civil engineering field under the Engineers Act.

3. Professional architectural work

Including: professional architectural work involving project research, design, construction management and supervision, inspection, or consulting.

Exceptions: (1) Professional architects recognized by the Architects Council of Thailand under the ASEAN Mutual Recognition Arrangements on architectural services and other international agreements on cross-border architectural services; (2) Persons licensed for practicing the regulated architectural professionals under the Architects Act.

(III) List 3: Occupations Prohibited to Foreigners Throughout Thailand, Except Where Foreigners Are Permitted to Perform Skilled or Semi-Skilled Work When Working for an Employer

List 3 specifies 8 categories of occupations. Foreigners are permitted to engage in these occupations only when performing skilled or semi-skilled work as an employee (not self-employed) working for an employer; otherwise, these occupations are reserved for Thai nationals only. These include:

·        

·       Agriculture, animal husbandry, forestry, or fishery

·       Bricklaying, carpentry, or other construction work

·       Making mattresses or quilts

·       Making knives or cutting tools

·       Shoemaking

·       Hatmaking

·       Garment making

·       Making pottery or ceramic products

(IV) List 4: Occupations Prohibited to Foreigners Throughout Thailand, Except for Foreigners Who Have Entered Thailand Pursuant to the Immigration Act Under a Memorandum of Understanding or Agreement Signed Between the Thai Government and a Foreign Government and Who Have an Employer

List 4 specifies 2 categories of occupations. Only foreigners who have entered Thailand pursuant to a Memorandum of Understanding or agreement signed between the Thai Government and a foreign government, in accordance with the Immigration Act, and who have an employer, may engage in such work. These include:

1. General labor;

2. Shop sales staff.

“General labor” refers to what is commonly known as “migrant workers.” Currently, the Thai Government has signed Memoranda of Understanding on Labor Cooperation and Employment of Foreign Workers ("MOU") with representatives of Myanmar, Cambodia, Laos, and Vietnam respectively, with the aim of establishing legal and orderly labor recruitment channels to replace irregular migration and protect the rights and interests of workers. Among these, the MOU signed between Thailand and Myanmar is the most important and largest in scale, first signed in 2003 and most recently signed in 2023; Myanmar workers constitute a significant pillar of Thailand’s labor market.

In summary, enterprises employing foreign employees in Thailand should assess, based on their own business activities and employee roles, whether any restrictions or prohibitions on foreign employment apply, so as to mitigate the risk of illegal employment.