Under Thai law, the corporate governance and filing requirements for a Thai private limited company (the Company) can be classified into two categories, namely: (a) regular items, and (b) occasional items.
- Regular corporate governance matters and filings consist of the following:
- Annual General Meeting. Thai law requires that the shareholders of a Company hold an annual general meeting (AGM) within six (6) months from the date of incorporation of the Company, and subsequently once every twelve (12) months, within four (4) months from the end of the Company’s fiscal year. The matters transacted at the AGM include: the approval of the minutes of the previous AGM; approval of the directors’ report on the business activities of the Company for the fiscal year under review; approval of the audited balance sheet of the Company; declaration of dividends, if any; election of directors in place of those retiring by rotation; appointment of the auditor; and approval of the auditor’s fee for the ensuing year.
- Shareholder List. The Company must file annually with the Ministry of Commerce, and not later than on the fourteenth day after the AGM, a list of the shareholders as of the date of the AGM.
- Audited Balance Sheet. The Company must prepare a balance sheet containing a summary of the assets and liabilities of the Company, as well as a profit and loss account for each fiscal year. The balance sheet must then be audited by a registered auditor and approved at the AGM. The Company must file the balance sheet along with Form Sor Bor Chor 3 with the Ministry of Commerce within one (1) month of the date of the AGM.
- Corporate Income Tax Returns (Form Por Ngor Dor.). The Revenue Code requires all juristic companies and partnerships to file a semi-annual tax return (Por Ngor Dor 51) and pay tax within two (2) months from the end of the first six (6) months of the company’s fiscal year, except for the company’s first fiscal year (after incorporation) if less than twelve (12) months, and to file an annual income tax return (Por Ngor Dor 50), together with a copy of the audited balance sheet, within one hundred and fifty (150) days from the closing date of the company’s fiscal year.
- VAT Return (Form Por Por. 30). The Revenue Code requires companies who are required to register for VAT to file a VAT return within the fifteenth (15th) day of each month for VAT related transactions in the preceding month.
- Appropriate forms for the remittance of withholding tax withheld from payments made during the month. These include but are not limited to Forms Por Ngor Dor. 1 (for withholding tax on payment of wages to employees); Por Ngor Dor. 3 (for individuals), and Por Ngor Dor. 53 (for juristic persons). Thai law requires companies to file these forms within the seventh (7th) day of the following month, or the seventh day from the date of receiving the payment, as the case may be.
- Annual Withholding Tax Returns for Wages to Employees (Form Por Ngor Dor. 1 Gor). This form sets out the details of employment, namely wage payments and tax withholding as prescribed by the Director-General of the Revenue Department pursuant to Revenue Code Section 58(2) within February of each year.
- Social Security. An employer who has one (1) or more employees is subject to the Social Security law, and must submit an application (Form Sor.Por.Sor 1-01/1-03) within 30 days from the date of hiring its first employee. The law requires the employer and the employee to each contribute equally to the Social Security Office at the rate specified by Royal Decree, which currently is 5% of the employee’s wages (subject to a maximum of Baht 1,500 per month), by filing Form Sor.Por.Sor 1/10/1-10/1. Thus, contribution payments of 5% from the employer and 5% from the employee must be paid to the Social Security Fund within the fifteenth (15th) day of the month following the deduction date. Contribution is for seven types of benefits, i.e., injury or sickness, invalidity, death, maternity, including child allowance, old-age pension and unemployment benefits.
- Compensation Fund (Workman’s Compensation). A Company which has any (one or more) employees must make contributions to the Compensation Fund. The Compensation Fund requires an employer to pay for treatment and care to any employee who sustains injury or sickness during the course of employment but not exceeding the rates prescribed in the ministerial regulations ranging from 0.2% to 1.0%. The Fund which is run by the Office of Social Welfare of the Ministry of Labour and Social Welfare will make compensation for and on behalf of the contributing employer in cases where he is legally liable to his employees for such payments. The employer shall pay contributions to the Compensation Fund according to the rates prescribed depending on the type of the employer’s business. Contributions are paid annually by January of each year and reported by February. The employer must report the amount of wages paid by the employer for the entire year by February of the following year. If any employee receives wages of more than Baht 240,000 per year, the wages for purposes of computation of the contribution for such employee shall be based on the amount of only Baht 240,000.
- Sign Tax. The Company is required to pay a sign tax to display its name, trade-name or mark used in the conduct of trade. However, no sign tax is payable for signs displayed within the Company’s premises nor within a private building.
Sign owners with a duty to pay sign tax shall, within the month of March of every year, file a sign tax return on the forms and in accordance with the procedures prescribed by the Ministry of Interior.
The rates of the sign tax are as follows:
- sign with Thai characters only: Baht 3.00 per 500 square centimeters
- sign with Thai and foreign characters and/or picture or other signs: Baht 20.00 per 500 square centimeters
- sign without Thai characters or sign with Thai characters partly or wholly under or lower than of foreign characters: Baht 40.00 per 500 square centimeters
- Occasional corporate governance matters and filings consist of the following:
- Any material amendments to the company. Such amendments include: merger/conversion to a public company limited; change in the paid-up capital (increase/reduction of capital); change to the Memorandum and Articles of Association of the company; change of the company’s seal; change of directors; change of the names or number of authorized directors and limitation of their powers; change of the address of the head office and/or branch office; dissolution of the company; and change of other particulars that should be disclosed to the public. Depending on the item to be amended, the company may first need to obtain the approval of the directors or shareholders (via a general or special resolution). A company must then register these changes with the registrar of the Department of Business Development, Ministry of Commerce.
- Any changes to the VAT registration. Such changes include a change in the name or place of the business, the category of business, goods or services subject to VAT. Thai law requires companies to file Form Por Por. 09 with the revenue district authority within fifteen (15) days from the date of commencement of any changes to the VAT business.
- Relocation of business or opening of a branch office or to notify opening of a branch office. As to relocation of the company’s registered office or to notify opening of a branch office, a company must file Form Por Por. 09 with the revenue district authority having jurisdiction over its current office not less than fifteen (15) days prior to moving, and Form Por Por. 09 with the revenue district authority having jurisdiction over its new office within fifteen (15) days prior to commencement of business at the new office.
- Expiration, Termination, or relocation of non-Thai employees. Non-Thai employees must obtain work permits under the Employment of Foreign Nationals Act B.E. 2521 prior to starting work. Upon the expiration, termination, or relocation of the place of work of non-Thai employees, a company is required to notify the labour authorities within fifteen (15) days from such expiration, termination or relocation date.
- Stock Certificates and Transfers. Shares may be transferred by the shareholders without the consent of the Company unless otherwise provided for in the articles. Any transfer of shares must be evidenced by a stamp duty of 1 baht per 1,000 baht transferred. Also, any transfer of a name certificate must be in writing and signed by the transferee and transferor (whose signatures shall be certified by at least one witness).
- Update and File Register of Members and Shareholder Ledger. The Company is required to maintain a register of shareholders. Any change in shareholders or the shares they hold must be reflected in the register of shareholders. The following informaion should be included:
- The names, addresses and occupations of each shareholder,
- The number of shares held by each shareholder and the certificate numbers of such shares,
- The amount paid or agreed to be considered as paid on such shares,
- The date when such person was entered in the register as a shareholder, and
- The date when such person ceased to be a shareholder.
Items (c) through (i) under part (1) above are generally handled by the local company’s accountants, while the other filings and governance matters can be handled by local counsel. These requirements are often amended by the Thai authorities, so please contact us if you have any questions or concerns about the status of any of the above items.