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Corporate Due Diligence in an Immigration Context in Thailand

Transcript of the above video:

As the title of this video suggests, we're discussing corporate due diligence in the context of Thai Immigration.

Now these two topics would not normally sound like something that you would put together but quite frankly in recent weeks I think it's pretty safe to say that Corporate Due Diligence is going to almost be a necessity for Mergers and Acquisitions on a large or small scale where foreign employees working in the Kingdom are going to be required to maintain or operate the business moving forward after or post Merger-and-Acquisition.

So what are we talking about here? Well in recent weeks, there has been something of a sea change within Immigration. The Immigration authorities here in Thailand are taking a much harder line with respect to scrutiny of Visa applications, B Visa applications for extension specifically, and under those circumstances they are undertaking a far deeper level of, for lack of better term, an audit if you will, on a company's income and expenses and as a result, those companies that do not look viable to support a foreign national employee both in terms of salary and the requisite social security contributions etc. associated with the sort of counterpart Thai employees, basically if the business does not look viable on paper from an accounting standpoint, it's going to be problematic for Visa renewal into the future; extension renewal into the future.

This is always been the case. Quite frankly Immigration Authorities have always wanted to see that that an underlying business acting as a platform for a B visa and a work permit, is really a viable enterprise. They’re not looking at shelf corporations that are just sort of sitting there on paper acting as a basis for visa application and renewal.

That being said, the level of scrutiny we are now seeing is pretty unprecedented from my experience in over 11 years out here. Immigration Authorities are really seriously combing through, looking at the books of various entities. And these aren't even entities that are running at a loss or entities that are close to running in loss. I've seen this been occurring with entities that are very clearly profitable. So the reason I bring this up is, those who were looking to get themselves possibly purchase a business here in Thailand or larger entities even, I can even see this in the context of large corporate buyouts, Mergers and Acquisitions, where there's an element of Immigration compliance that needs to be brought into the analysis during Corporate Due Diligence in order to ascertain if it's going to be viable to bring one or more or X number of employees into a Thai company and maintain a work permit and  a Visa moving forward based upon the numbers internal to that Corporation based upon those internal numbers of profit-and-loss, balance sheets, audited financial statements, various tax compliance and tax returns. All of this is going to factor in when looking at the possibility of getting visas and work permits on a given company into the foreseeable future.