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Thailand requires companies to meet compliance requirements both before and after setting up a company, and it is essential to ensure you follow these legal requirements. We have put together a list of the corporate compliance requirements for Thai companies you should expect.
Let’s dive in.
What are the company set-up requirements in Thailand?
The company name must be reserved with the Department of Business Development (DBD) of the Ministry of Commerce.
The company name must end with the word Limited and registered in Thai, even if the company name is in English.
Once the name is approved, the name will be valid for 30 days, and no extension is permitted.
A Thai company must have at least one director who is at least 20 years old, is a Thai resident or non-resident and is not incompetent or bankrupt.
Companies in Thailand are required to have a minimum of three shareholders. Foreign investors can have 100% ownership under certain requirements.
For activities that are reserved for Thai nationals, foreigners can own a maximum of 49%.
Memorandum of association
The memorandum of association (MOA) is a legal document made by the company’s founders during the registration process.
The MOA should include the following information:
- Private limited company
- Company name
- Company’s registered office location
- Company’s objective
- Registered capital
- Name, address, age, occupation and number of shares that persons who start up the company reserve to buy
- Name, address and age of two witnesses
- Public limited company
- Company name
- Purpose of the company to offer shares for sale to the public
- Objective of the company
- Registered capital
- Location of the company
- The name, dates of birth, nationalities and address of the promoters and the number of shares each of them has subscribed
Display of company name
The company name must be displayed at the company’s office. The company must display its company name on documents such as invoices, letterheads and receipts and include the words Company Limited or Limited.
Companies in Thailand are required to have a registered address to receive documents from government authorities. It can be any valid street address to which the owner or legal tenant has given permission to the company to use the premise as the registered address.
Companies that do not have a registered address can use virtual office spaces or fitted desk space solutions.
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Ongoing business compliance requirements for companies in Thailand
General meeting of shareholders
The company’s first general meeting is held within six months after the company is incorporated, and the following general meetings should be held once a year.
Private and public limited companies must provide the following documents at the end of each accounting period:
- Audited financial statements
- Balance sheet
- Profit and loss account
- Company name
- Director’s details
- List of shareholders
- Minutes of the annual meeting
- Type of business
Accounting and tax compliance requirements for companies in Thailand
Date of the financial year-end
The financial year-end for companies in Thailand is 31 December. The accounting period is 12 months, but for companies that are newly incorporated, their accounting period can be less than 12 months.
Company accounts and other relevant documents must be kept at the company’s registered address for at least five years from the date of closing their account, but depending on the company’s business activity, this may be extended to seven years by the Revenue Department.
Documents, records and statements required to be kept include:
- Accounting journal
- Statement of accounts
- Records of payment and receipts
- Profit and loss statements
- Balance sheets
- Records of electronic funds transfer
- Credit card transactions
- Bank statements, including cheque records
- Internal or external audit reports
Financial statements, accounts and documents must also be recorded in the Thai language or in a foreign language accompanied by the Thai language, written in ink, typewritten or printed.
Audit of financial statements
Companies must prepare audited and certified financial statements at the end of the fiscal year. The auditor must also offer their opinion on the financial statement as the audit opinion is required when submitting financial statements and tax returns.
Corporate income tax return
Companies must file corporate tax returns (Form CIT 50) and pay taxes within 150 days from the closing date of their accounting periods.
Companies engaged only in disposing of funds/profits from Thailand also have to pay corporate income tax within seven days of the disposal date and file Form CIT 54.
Employment law in Thailand
Employees who have been employed for one consecutive year are entitled to at least six working days of annual leave.
The employer and employee can agree to carry forward any annual leave that has not been used in the year to be added in the following year.
Employees are entitled to 30 days of sick leave each year. If the employee takes sick leave of more than three days, they are required to submit a medical certificate to the employer.
Pregnant female employees receive 98 paid days of maternity leave which include day-offs for prenatal appointments.
Employers will pay the full amount of the female employee’s salary during the first 45 days of maternity leave, and social security pays the second half.
Only employees in the public sector are entitled to 15 days of paid paternity leave.
Social Security Fund
Social security in Thailand covers the following individuals:
- Section 33 – an employee who is not younger than 15 years old and not older than 60 years old
- Section 39 – an employee who is an insured person under section 33 having paid contributions for a period of not less than 12 months and ceases to be an insured person by ending to be an employee.
- Section 40 – any other person who is not an employee under section 33 or section 39
The social security contribution rate is 5%.
The minimum salary to calculate the social security contribution is THB 1,650, and the maximum is THB 15,000 (THB 83 and THB 750).
Social security contributions must be submitted to the Social Security Office by the 15th of the following month.
Covid-19 relief measures
From June to August 2021, the Thai cabinet reduced the contribution rate to 2.5% to help employees.
Once you have incorporated a company in Thailand, it is necessary that you follow any compliance requirements to prevent being fined or other legal penalties. For advice on compliance requirements, do not hesitate to contact Acclime.
Acclime is Asia’s premier tech-enabled professional services firm. We provide formation, accounting, tax, HR and advisory services, focusing on delivering high-quality outsourcing and consulting services to our local and international clients in Thailand and beyond.