Do I Need a Local Entity to Hire in Thailand?

In Thailand, a "local entity" refers to a legally recognized presence that can act as an employer, such as a subsidiary or branch office. This setup allows you (or a provider acting on your behalf) to be recognized as an employer and fulfill local payroll and employment obligations.

Without a local entity, you generally cannot register as an employer, manage mandatory Social Security processes, or run compliant payroll. Thailand's Social Security Office outlines employer responsibilities for contributions, which are crucial for compliance.

What is Required to Employ Someone in Thailand?

• Local employing entity required to directly employ? Yes (unless using an EOR)
• Payroll registration required? Yes (employer registration with the Social Security Office)
• Withholding/tax remittance required? Yes (monthly income tax withholding is mandatory)
• Social contributions required? Yes (employer must pay contributions to the Social Security Fund)
• Local employment agreement required? Yes (written contracts are standard practice)
• Mandatory benefits to budget? Yes (statutory leave, social security, and other entitlements)
• Works council/collective agreements considerations? Often (certain sectors may have collective agreements)

Best Options If You're Hiring in Thailand

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should be cautious about the nature of the relationship.

While hiring contractors doesn't require a local entity, Thailand has strict labor laws, and misclassification can lead to legal issues. Ensure that contractors operate independently and aren't integrated into your business operations.

• Contractors should have their own tools and work schedule.
• They shouldn't be dependent on your company for ongoing work.
• Misclassification risk increases if the contractor's work is core to your business.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in Thailand, depending on registration requirements.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 15,000–40,000 THB per month ($450–$1,200)
• Payroll provider: Estimated 1,000–3,000 THB per employee per month ($30–$90)
• Employer registrations and recurring compliance: Estimated 10,000–20,000 THB per year ($300–$600)
• Corporate tax filings and annual reporting: Estimated 30,000–60,000 THB per year ($900–$1,800)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 per month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Thailand

Hiring in Thailand can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Thailand quickly without establishing a local entity, eliminating incorporation costs and ongoing administration.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s managed payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.