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Outsourcing to Thailand

Thailand is one of the best outsourcing destinations not only in Southeast Asia but in the entire world. Thanks to its skilled and highly-trained workforce, along with its low labor costs, Thailand allows foreign businesses to maintain their high-quality work standards while outsourcing some of their activity to a country that is increasingly investing in its IT infrastructure.

Thanks to the services provided by FMC Group, hiring local employees in Thailand and managing them becomes extremely simple. FMC Group takes care of the recruitment process and the administrative management of employees, so clients can focus on their business activity and directly manage the work of their employees. The outsourcing service offered by FMC Group gives clients great flexibility and allows them to quickly hire local employees in Thailand, without the need for establishing a subsidiary in the country.

Content:

  • Advantages of Outsourcing to Thailand
  • FMC Group’s Outsourcing Approach
  • Advantages of Outsourcing with FMC Group
  • Labor Laws in Thailand
    • Working Hours
    • Paid Vacation and Public Holidays
    • Other Paid Leaves
    • Minimum Wage
    • Social Contributions and Taxes
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Stephan Dorn FMC Group

Advantages of Outsourcing to Thailand

  • Thailand is home to a highly-skilled and constantly-growing workforce. Over 82% of the Thai population obtained advanced education and more than 500,000 individuals graduate from Thai universities every year. The population in Thailand also has a literacy rate of over 82%.
  • The IT sector in Thailand, while still relatively new, counts a talent pool of more than 100,000 software developers. The country also offers education and training in the IT sector in all of its top universities.
  • The average monthly salary for full-time IT engineers in Thailand is THB 50,000 (<EUR 1,370), which is less than EUR 7.20 per hour.
  • Thailand has a good internet and electricity infrastructure, allowing remote employees to maintain a steady workflow.
  • The Thai government is increasingly investing in the country’s IT sector to make it a regional leader in the field.
  • Thai workers are very familiar with western culture and western business processes, thanks to their country’s openness to foreign investors and tourists.

FMC Group’s Outsourcing Approach

Selection and interviews

  • Preselection of candidates based on the client’s criteria;
  • Establishment of reports on the best candidates;
  • Conduction of interviews;
  • Personality tests (optional).

Recruitment

  • Final recruitment decision taken by the client based on video interviews, among other available formats;
  • Employment of successful candidates at the local FMC Group company.

Operations

  • Functional management of employees and work assignments by the client;
  • Administrative management (payment, leaves, contracts, etc.) by FMC Group;
  • Provision of the necessary work tools and infrastructure by FMC Group.
Approach for Nearshoring

Advantages of Outsourcing with FMC Group

  • Tailored candidate search according to the client’s needs;
  • Job advertisement on various platforms and search for candidates on FMC Group’s database;
  • Full recruitment process by FMC Group: Preselection, interviews, reference checks, contract negotiations, etc.;
  • Flexibility and no long-term commitment;
  • Complete functional management of employees by the client;
  • No need for setting up a local company.

Labor Laws in Thailand

Working Hours

  • Employees in Vietnam can legally work up to 48 hours per week or 8 hours per day.
  • Extra working hours are allowed but they cannot exceed 36 hours per week.
  • Overtime work is paid at a rate of 150% of the hourly base salary on weekdays and 200% on weekends and public holidays.

Paid Vacation and Public Holidays

  • Labor law in Thailand gives employees the right to 6 days of annual paid leave, but only after they complete their first year of service.
  • The common practice is for employees to receive between 10 and 15 days of paid vacation.
  • Thailand celebrates 13 public holidays:
    • January 1st: New Year’s Day (1 day)
    • Late February or early March: Makha Bucha Day (1 day)
    • April 6: Chakri Day (1 day)
    • April 13-15: Songkran Celebration (Thai new year) (3 days)
    • May 1st: Labor Day (1 day)
    • May 5: Coronation Day (1 day)
    • Late May or early June: Visakha Bucha Day (1 day)
    • Late July or early August: Asahna Bucha Day (1 day)
    • June 3rd: M. Queen’s Birthday (1 day)
    • July 28: M. King’s Birthday (1 day)
    • October 23: Chulalongkorn Day (1 day)
    • December 10: Constitution Day (1 day)
    • December 31: New Year’s Eve (1 day)

Other Paid Leaves

  • Maternity Leave: New mothers can receive up to 98 days of maternity leave, including 45 days covered by the employer, 45 days covered by social security, and 8 days either unpaid or paid by the employer.
  • Sick Leave: Employees can take up to 30 days of sick leave per year. If the employee is out sick for 3 or more consecutive days, the employer has the right to request a medical certificate.
  • National Service Leave: Male employees can obtain this leave for up to 60 days per year if they are required to join the military. The pay is the same as normal work and it is covered by the employer.
  • Sterilization Leave: This paid leave is available for men and women who go through a sterilization procedure. Its period depends on the employee’s medical certificate and it is paid for by the employer.

Minimum Wage

  • The daily minimum wage in Thailand varies from region to region. It goes from THB 313 (<EUR 8.50) up to THB 336 (<EUR 9.10).
  • Salaries in Thailand are paid monthly on the last working day of the month.
  • The 13th month bonus is a very common practice in Thailand, despite it not being legally required.

Social Contributions and Taxes

  • Employers have to pay a social contribution ranging from 5.20% to 6.00% of the employee’s gross salary. The contribution goes to pension (3.00%), health insurance (1.50%), unemployment (0.50%), and work injury (0.20% – 1.00%).
  • Employees have to pay a social contribution of 5.00% of their gross salary. The contribution goes to pension (3.00%), health insurance (1.50%), and unemployment (0.50%).
  • The employee income tax starts at 0.00% for employees with a yearly salary of less than THB 150,000 (<EUR 4,120) and can go up to 35.00%.