Why factories in industrial estates have their own route
Factories in industrial estates are often given the same advice as ordinary companies: count the registered capital and the number of Thai employees, then calculate how many foreigners you can hire. That advice is not wrong for an ordinary limited company, but it overlooks a route that factories in estates already have.
The Industrial Estate Authority of Thailand has its own powers under its establishing law to permit foreign skilled workers and experts, together with their spouses and dependants, to stay and work in operations located in the estate. This is a route parallel to the ordinary Ministry of Labour route, not a shortcut within the same route.
In practice, the operator files through the estate office where the factory is located, and what is considered is the operator's status in the estate and the position applied for, not an employee-ratio formula.
This guide is written for factories located in industrial estates. If your company is outside an estate and has no investment promotion, read the HR guide to applying for and renewing work permits instead, and if you hold a promotion certificate, read the guide to BOI-track work permits as well, because many factories in estates hold both rights.
Disclaimer: This document is general information for planning purposes and is not legal advice. Procedures and required documents differ by estate and by the type of zone the factory is in. Please confirm with the relevant estate office or a legal adviser before you proceed.
Having two routes does not mean you can switch person by person
Many factories in estates also hold an investment promotion certificate, so they have both the route for operations in the estate and the route for promoted operations.
The misunderstanding that causes problems is thinking that two routes means you can pick the more convenient one for each person. In practice, each route has its own set of conditions, its own set of documents, and its own responsible agency. Having employees scattered across two routes without organisation creates three problems at once: nobody holds a combined calendar, each person's documents are in different places, and when you are inspected there is no explanation for why two people doing similar work are on different routes.
The approach that works is to set the criteria in advance: which route employees working on promoted activities are on, and which route employees working on the rest of the business are on, and to record this in an internal document, rather than leaving it to whoever happens to handle the matter at the time.
Free Zone and general industrial zone
The main difference between the two zones is in tax privileges and control over the movement of goods, not directly in the work permit route.
But there is a clear indirect effect. Operations in a Free Zone carry heavier customs and reporting obligations and are inspected more often. In our experience, a problem in one area often pulls other areas into the inspection. A factory that has a problem reconciling raw materials imported under a privilege is often also checked on its employment records at the same time.
This is why we usually advise factories in a Free Zone to treat foreign employee documents and customs documents as one set in internal reviews, instead of keeping them in separate departments and checking them in separate rounds.
Where factories in estates most often go wrong
Sending employees to help outside the authorised workplace — an affiliated factory outside the estate, an installation site at a customer's premises, a warehouse rented in another province. These are all workplaces that must fall within the authorised scope. Sending a foreign engineer to fix a problem at a customer's site for two days looks like ordinary work, but it is work outside the conditions if it is not specified.
Contractors bringing foreign nationals onto the site — the contractor is the employer of its own people, but when there is an inspection on the factory premises, the owner of the establishment is always drawn in to explain. What actually reduces the risk is not wording in the contract but checking the real evidence at the entrance screening point before letting people onto the site.
Changing positions internally without adjusting the documents — promotions, department transfers and added scope of work are things HR can handle internally straight away, but the work authorisation documents lag behind. The pattern to avoid is announcing the restructuring first and chasing the documents afterwards. Details are in the guide to changing employer, position and workplace.
Nobody holds a combined calendar — the work permit expiry date, the permission-to-stay expiry date, the 90-day reporting cycle, and the deadlines under the estate's operating conditions are four sets that do not remind one another. In a factory with several foreign employees, this job often falls to one administrative staff member, with no handover when that person resigns.
A workable order of work
- Confirm the operation's status in the estate, including land use, operations and required reports, before filing for any employee.
- Decide which route applies to which group of employees, and record the criteria in an internal document.
- Specify every workplace from the start, including customer sites and affiliated factories employees may have to visit. Specifying broadly at the outset is far cheaper than filing to add them later.
- Build the work-authorisation document requirement into the contractor agreement, and check for real at the entrance.
- Review the operation's status and its compliance with the conditions every six months, not when renewal is close.
Related services
We act for factories in estates on foreign employee matters and on the other matters that often come with them. See visa and work permit services for employers for foreign employee work directly, labour law compliance review if you want the whole employment system checked, and factory licences and business licences for the operation's licensing side.
For the law that applies to factories in estates generally, read the guide to factory and industrial estate law.
If you would like your factory's status assessed and a full system set up for looking after foreign employees, call 092-254-2045.
