Introduction
According to the data published by the Department of Older Persons under the Ministry of Social Development and Human Security of Thailand, as of 31 December 2020, 17.57% of Thai population are above 60 years old and it can be expected that the proportion will gradually increase. Given Thailand’s transformation to an aged society, the demand for care services to elderly persons, ranging for assisted living to residency in care homes, will become higher. The growth of this new demand due to the demographic change opens a new investment opportunity in elderly care services such as care facilities and home care service, etc.
From legal aspect, several laws concerning the operation of care services for elderly persons have been announced in the recent years by Thai authority. This article provides a brief summary of material licenses required to operate care services for elderly persons in Thailand and also incentives granted to the eligible businesses.
1. I.Licenses and Requirement
Key licenses and requirements to operate care services for elderly persons in Thailand are as follows:
Licenses to operate Care Facility under the Health Business Establishment Act B.E. 2559 (2016) (the “HBE Act”)
The HBE Act is the master law regulating health or beauty business which does not provide medical treatment to customers e.g. spa, massage and another business as will be further announced by the Ministry of Public Health (the service provider under the HBE, a “Health Business Establishment”). Under the said Act, the operators of the Health Business Establishment are required to obtain the license from the Division of Health Business Establishment, the Department of Health Service Support under the Ministry of Public Health (the “DHSS”) and comply with the standard imposed under the HBE Act.
Regarding the elderly care service, the Ministry Regulation dated 20 July 2020 (effective from 27 January 2021) (the “Care Facility Regulation”) issued under the HBE Act designates “care business of elderly persons or persons who have dependent conditions” as a type of Health Business Establishment under the HBE Act and thus requires the license for the business operation (the “Care Facility License”). Under the Care Facility Regulation, businesses which fall within the scope of “care business of elderly persons and persons who have dependent conditions” include “business of providing services related to caring, supporting, rehabilitating or assisting activities during the day, assisting daily routine or providing a place to reside or care for elderly persons or persons who have dependent conditions, but excluding medical facilities as defined under the law concerning medical facilities[1]” (collectively, the “Care Facilities”). Overall, the Care Facilities under the Care Facility Regulation must arrange the supporting and rehabilitating activities for elderly persons. Furthermore, the types of Care Facility License can be categorized into 3 depending on type of stay and conditions of elderly persons in the Care Facilities, as follows:
[1] Under the Medical Facilities Act B.E. 2541 (1998), a “medical facility” means “a place including a vehicle provided for healing arts practices under the law on healing arts practices, medicine profession practices under the law on medicine profession, nursing and midwifery practices under the law on nursing and midwifery profession, dental profession practices under the law on dental profession, physical therapy profession practices under the law on physical therapy profession, technological medicine profession practices under the law on technological medicine, or traditional Thai medicine profession practices and applied traditional Thai medicine profession practices under the law on traditional Thai medicine profession, or another medical and health professions under the laws governing such profession in which it is normally conducted regardless of payment or non-payment.”
Type 1: a daycare facility without overnight stay which provides care service for elderly persons or persons who have dependent conditions;
Type 2: a facility with residential area for long term stay which provides care service for elderly persons who are still capable to perform normal routine; and
Type 3: a facility with rooms for overnight stay which provides care and assisting services for the elderly persons or persons who have dependent conditions, especially for those who are not capable to perform normal routine by themselves.
The Care Facilities which can apply for the Care Facility License must comply with the minimum standard required under the Ministerial Regulation as follows:
- Location standard e.g. the adjustment of fixtures inside the Care Facilities must allow full accessibility to wheelchair;
- Safety standard e.g. fire extinguishers and ready-to-use first aid kits must be installed inside the Care Facilities; and
- Service standard e.g. the records of its residents must be prepared and the evaluation of communication capacity of the resident must be made once in every 3 months, clean and safe food must be provided, etc.
In addition to the Care Facility License, the Care Facilities which provide residential area for long term stay or rooms for overnight stay are required to have an administrator who must be stationed to oversee the day-to-day operation of the Facilities. Such administrator requires a license under the HBE Act to work in the said Facilities. In order to obtain the administrator’s license, the applicant must be at least 20 years old and must have obtained a certificate showing that he/she has passed a health service training course which is accredited by the DHSS as well as the evaluation test. Care givers who provide the service to elderly inside in the Facilities must also register himself/herself and pass the evaluation under the criteria designated by the DHSS.
License to operate health-hazardous activities under the Public Health Act B.E 2535 (1992) (the “Public Health Act”)
In addition to the establishment of the Care Facilities as mentioned above, elderly care services can also be provided by sending care givers directly to each elderly person’s home (the “Home Care Service”). In such case, in addition to the Care Facilities License, the operators of Home Care Service must obtain the license to engage in health-hazardous business from local governments (the “Hazardous Business License”).
Under the Public Health Act, certain businesses which involve close contact to human health or use chemical substances can be categorized as “health-hazardous businesses” by the Ministry of Public Health. Such announcement is the master list of regulated businesses and each local government in Thailand has the authority to announce the businesses within the said list as health-hazardous businesses in their areas. Once such announcement has been made, the operators of such activities in the area must obtain the Hazardous Business License from the local government.
In this regard, Home Care Service has been included in the master list of health-hazardous activities under the Notification of Ministry of Public Health re: Health-hazardous activities dated 3 June 2015. Whether or not the operation of Home Care Service will be deemed as subject to the Hazardous Business License will depend on the ordinance in each local municipality. In case of Bangkok, the operation of Home Care Service has been declared health-hazardous business under the Bangkok Ordinance re: Health hazardous business B.E. 2561 (2018) and thus the provision of Home Care Service in Bangkok area is subject to the Hazardous Business License.
The standard for Home Care Service under the Hazardous Business License will be announced by each local government. Regarding the details of such standard, the Public Health Committee under Ministry of Public Health has announced the recommendation for regulation of Home Care Service Business on 24 September 2010 and local governments which already announced their standards referred to this recommendation as the model regulation. The standard includes minimum qualification of care givers and standard of assistance which must be provided to the elderly persons during the Home Care Service, for examples, the care giver shall give assistance to the elderly person during his/her daily routine which is suitable and safe for the age of such elderly persons and must observe the change in the elderly person’s behavior and report his/her condition daily to relatives etc.
Foreigner Business License under the Foreign Business Act B.E. 2542 (1999) (the “FBA”)
A foreign company (i.e. a company in which less than half the shares are owned by Thai companies or persons) which is registered in Thailand and intends to provide elderly care services both in the form of Care Facilities and/or Home Care Service will be subject to the foreign business license (the “FBL”) for service business under the List Three (21) annexed to the FBA. The criteria for granting the FBL will be determined by the competition against Thai business and contribution of technology and know-how to Thai employees or business. A foreign company who has been granted the FBL must bring in to Thailand the minimum capital in the amount of at least 3,000,000 THB (approximately 97,000 USD) or 25% of average estimation expense for 3 years of business, depending on whichever is higher.
Other Licenses
In addition to the licenses mentioned above, the Care Facilities and Home Care Service can be subject to other licenses depending on accessory services provided. For example, if the Care Facilities are involved in the provision of transportation or pick-up service for the residents with fees, such activity can be subject to the transport license under the Land Transport Act B.E. 2522 (1979). Foreign staff who work inside the facilities such as interpreters or administrative staff, etc. are also required to obtain work permits and visas under immigration laws.
II.Business incentives granted by the Board of Investment of Thailand (the “BOI”)
The Care Facilities under the HBE Act can be eligible for tax and non-tax benefits granted by the BOI. Under the recently announced BOI Notification No. Sor. 1/2564 re: additional amendment of the eligible business category for investment promotion under the Announcement of the BOI No. 2/2557 dated 13 January 2021, the applicant of the BOI promotions must fulfill the following qualifications:
- The business must fall in the scope of the Care Facilities under the HBE Act;
- The Care Facilities must have at least 50 beds for the service;
- The care service must be under the scope of Type 3 Care Facilities License i.e. a facility with rooms for overnight stay to provide care and assisting service for elderly persons or persons who have dependent conditions and are not capable to perform normal routine by themselves;
- At least 51% of shares in the applicant company must be held by Thai nationality persons or entity; and
- The applicant must receive the Care Facilities License under the HBE Act in order to receive corporate tax exemption.
The company who receives BOI promotion will be granted (i) exemption of corporate income tax for 3 years, (ii) exemption of import duties for machinery, and (iii) other non-tax incentives such as permission to bring into Thailand skilled workers and experts to work in the promoted business, etc.
It must be noted that the BOI promotion for Care Facilities will be granted to Thai company having the majority of shares held by Thai nationality persons or entity only. Therefore, foreign investors who would like to invest in the Care Facilitates business under the BOI promotion may be required to partner with Thai companies. Still, BOI promotion can benefit foreign investors because it gives special permission to bring in foreign personnel.
Conclusion
Despite the increase in aged population, Thailand’s population growth is declining. According to the study of the Office of the National Economic and Social Development Council in January 2020, the population in Thailand in children age started to decline from 2020 and will continue so. The ratio of working age population is expected to decrease from 65% in 2020 to 56% in 2040. With the reduction of working age population, care services for elderly persons allow both elderly persons and their family to seek alternative for assisted living and relieving the burden of relatives. The recent enactment of the Care Facility Regulation and the BOI’s incentives show that the focus on the said business in Thailand is still in the initial state and business entrepreneurs in developed countries who are well-experienced with aged society may consider bringing in their know-how when investing in Thailand.
