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Shelter Can Be Your Employer of Record in Thailand

What is an Employer of Record (EOR)?

If you are a digital business owner or work remotely in the digital space, relocating your operations to cost-effective Thailand presents a unique opportunity for geo- and labor arbitrage. Generally speaking, there are two ways to get started on this path.

The first is the Do-It-Yourself (DIY) approach. You will need to incorporate a Thai company or local subsidiary, engage a range of legal advisors and third-party vendor services, and ultimately make a significant investment of time and money. The process is complicated and can take more than 6 months until you are ready to payroll your employees.

The other route is to outsource your overseas employment (whether as employer or employee) to a certified Employer of Record (EOR) service, such as Shelter Global. An EOR is a company that employs you or your team according to local labor laws and takes care of payroll, tax, social security, and immigration matters. (Unlike a PEO or Professional Employment Organization, an EOR handles the HR-related functions only for your employees who are relocating overseas rather than for all of your employees.) Your employees still work on your behalf; the EOR handles the administrative and compliance responsibilities for you — removing much of the time and cost burden.

  • EOR v. DIY
  • What are the benefits of using an EOR?
    • Lower cost
    • Hassle-free compliance
    • Drafting of employment contracts
    • Visa and work permit sponsorship
    • Outsourced payroll
    • Low effective tax rate
    • Thai Social Security
  • Who is it for?
    • Employers and entrepreneurs
    • Employees
    • Digital freelancers
  • What are the costs?
  • What is the onboarding process?
  • How do I get started?

EOR v. DIY

The primary benefit of using an EOR like Shelter Global is that it makes relocating your business to Thailand simple. You have local experts to handle the set up (title approval, Thai visa application) as well as ongoing administrative processes (immigration, payroll, tax, social security, health insurance), and your employees can be visa-ready to enter the Kingdom in a matter of weeks.

If you pursue the DIY route, the time and cost burden is substantial. You will need to work with lawyers to incorporate a local company, set up a physical office space, and find local third-party vendors to provide immigration and payroll services similar to what Shelter offers. Since the DIY approach requires you to deal with lawyers and vendors on an ongoing basis, it is expensive and time-consuming. Even if your company is large and has devoted HR and legal departments, you run the risk of non-compliance if you don’t have specific expertise in several key areas of Thai law.

With an EOR service like Shelter Global, you drastically reduce your costs and can rest assured that you are following local laws and regulations. Our team has broad knowledge and expertise in Thailand employment law, finance, and administrative support and can act as a single point of contact for your overseas employment. We have already done the heavy lifting for you by setting up the relevant departments and processes, so your employees can hit the ground running in Thailand in less than a month.

What are the benefits of using an EOR?

Lower Cost

If you are a new company or a startup, you likely do not have the budget or resources to set up an office and hire an HR staff to manage your administrative functions. In this case, using an EOR service is especially cost-effective. With an EOR like Shelter, there is no need to set up a local corporate entity, meet capital requirements, consult employment and immigration experts, hire payroll and administrative support services, or file corporate tax and social security paperwork. We do all of this for you, which can save up to six figures in set up alone.

Hassle-free Compliance

Labor laws in Thailand are complex and constantly changing, and the Kingdom is notoriously strict when it comes to documentation. You need to ensure that your company is following the correct bureaucratic processes. Accordingly, it is important — especially for foreigners doing business in Thailand — to seek advice from experts who can help you navigate the complicated Thai legal system.

Unless you have a compliance officer who specializes in Thai labor law, you are better off using a EOR service. This way you can avoid the unexpected setbacks and pitfalls of extending your business operations into a foreign country with unfamiliar bureaucratic processes.

Drafting of Employment Agreements

In order to comply with Thai labor law, employers must execute contracts between employer and employee that cover all relevant statutory rights and obligations. Additionally, employment contracts in Thailand should always state the salary and any compensation amounts in Thai Baht (THB) rather than a foreign currency.

At Shelter Global, we know how to draft such agreements to the best benefit of you and your employees and will lead you through the necessary steps of execution from initial contract signing to administrative onboarding and termination. We draft the agreements for you; all you need to do is review and sign.

Visa and Work Permit Sponsorship

Shelter Global is able to sponsor Thai Business Visas and Digital Work Permits for you and/or your employees as the Employer of Record. Immigration law in Thailand, like Thai labor law, is renowned for being paperwork-heavy and always changing. Thus it is essential to have a reliable expert to handle your visa and work permit-related matters for you as part of their package services.

Shelter can assist you with every step of the process, from document collection and title approval (all online) to visa application and obtaining work permits. Best of all, with Shelter you don’t need to show up physically for quarterly notifications at Immigration and you can extend your visa and work permit each year without leaving the country.

Outsourced Payroll

With an Employer of Record service, payroll is conveniently outsourced. Our services cover every angle of the payroll process from setting up Thai bank account for your employees to tax and social security deductions.

We invoice your company on the 21st of each month and process their salaries in THB by the third of the next month. We can also provide your company any additional documents such as income and withholding tax which they may need for corporate tax filing in their home country.

Low Effective Tax Rate

One of the best benefits of relocating to Thailand to work remotely is its low effective tax rate. Not only will your employees save through leveraging the currency difference between Thailand and western countries, they will also see a lot more of their paychecks   after tax  than if they were earning in their home country. You can rest assured that our payroll services will get your employees—and your company by extension—fully legal and contributing to the Thai system.

Social Security

There are three social systems that provide healthcare and other benefits in Thailand: civil welfare for government workers, social security for private employees who work for a company (both national and foreign), and universal healthcare for other Thai nationals.

An Employer of Record can execute your monthly social security payments as a private employee and get you a social security card. You will be assigned a local hospital where you can receive treatment at no cost. For supplementary care, we also offer international healthcare plans for those who want more benefits and access to more hospitals and medical services.

Who is it for?

An EOR service like Shelter is perfect for those currently working as digital business owners or entrepreneurs, startups in the technology space, remote employees of overseas companies, and digital freelancers. You can save a lot by “offshoring” your operations to tech-friendly Thailand.

Employers and Entrepreneurs

If you run a startup or company, Shelter Global specializes in relocating teams and can offer an affordable haven to get your business and ideas off the ground. We can offer shared or independent office space in great locations to suit your needs. Additionally we can help you recruit new talent when you need it. Depending on the tax laws of your country, you will save on employer contributions, healthcare, pensions, third-party services, etc.

Employees

If you already work for a company, you can easily relocate to Thailand with Shelter Global. Convincing your current employer to outsource your job directly to you may be one of the smartest moves you ever make. Depending on your home country’s income tax and social welfare requirements, this arrangement might come with a host of benefits for both parties. In any case, with the low cost of living in Thailand, you are bound to come out on top.

Digital freelancers

As a location-independent freelancer, you can relocate your business to Thailand easily. We’ll employ you, while you keep working on your existing projects. You can invoice your clients through Shelter’s easy-to-use billing system and monitor with confidence. Continue to have complete freedom with the clients of your choosing and also take advantage of Shelter’s diverse network of professionals to discover new opportunities.

What are the costs?

If you choose Shelter Global as your Employer of Record, your employee will be assigned a dedicated account manager who will serve as their main point of contact through each stage of their employment and issue a single monthly bill to you or your employee on the 21st of each month.

The cost of onboarding with Shelter varies depending on a number of factors, but in general there are three fees involved:

1. Security deposit, to be returned on completion of contract

2. Visa and Work Permit fees (paid at the Thai Embassy or Consulate where the visa application is submited, and at Immigration in Chiang Mai or Bangkok when picking up your work permit)

3. Shelter Global administrative fee, a flat fee charged per employee per month

What is the onboarding process?

The first step is to get in contact with Shelter for an initial consultation to determine eligibility. You can do so here.

After pre-approval, we will need a number of documents from your employee which will help us get their titles approved with the labor authorities in Thailand, namely:

  1. Passport scan
  2. Passport-suitable photo
  3. Resume
  4. Professional reference letters
  5. University or high school diploma

Once approved, we will prepare the visa sponsorship paperwork and send to your employees via priority mail. Your employees can use this package to apply for a ninety day Business Visa at a Thai Embassy or Consulate in their home country or in a country near Thailand (Penang and Kuala Lumpur in Malaysia are popular choices). Visas can typically be picked up one business day after applying.

Thailand Digital Work Permit

The last step is to have your employee meet us at Immigration either in Chiang Mai or Bangkok, where we will help them pick up their Digital Work Permit and extend the Business Visa. There is no waiting in long lines or filling out complicated forms — we do everything for you.

To sum up, here is the onboarding process in 7 steps:

  1. Shelter application
  2. Digital document collection
  3. Job title approval
  4. Receive Business Visa package by mail
  5. Apply for visa at Thai Embassy or Consulate
  6. Enter Thailand
  7. Obtain Digital Work Permit and extend visa to end of year

Read more here: How to Get a Thai Business Visa and Work Permit through Shelter

How do I get started?

To get started, simply fill out a Shelter application form here. A representative will be in contact with you within 24 hours.

To expedite the process, please begin preparing the 5 documents listed in the section above as soon as possible. Once we have all the documentation, title approval is only 8–10 business days away.

 

 

 

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3 May
2020
Mark
McGinn