Post-Registration Company Compliances in Thailand- An Overview Every business entity that is registered in Thailand, be it a company, partnership, joint venture or branch of a foreign company, is obligated to prepare and maintain their financial statements for their assigned accounting period for submission to the Ministry of Commerce. All the foreign companies doing business in Thailand, including their representative offices, branch offices and regional offices, are required to submit their audited financial statements within a period of 150 days from the end of the fiscal year. Companies in Thailand have been given the option to select their own accounting period. Once an accounting period has been chosen by a company, it cannot be changed unless prior written approval has been obtained from the Department of Revenue. Post-Registration Compliances in Thailand are regulated according to the following statutes: The Securities and Exchange Act of 1992; The Accounting Act of 2000; Insurance Commission Act B.E. 2550; The Bank of Thailand Act B.E. 2485; and Financial Institutions Business Act B.E. 2551. Enterslice advises and assists in preparing a post-registration compliance calendar for all the statutory filings and disclosures to be made by your Thai company to ensure that your company always stays on the right side of the law. The annual returns of the company are required to be filed together with the applicable fee to the respective departments of the government. Major Post-Registration Companies Compliances in Thailand Following are the major post-registration compliances in Thailand that every company has to follow to avoid any instances of penalty: Preparation of Financial Statements A company registered in Thailand is obligated to prepare its financial statements once every 12 months. These financial statements shall be audited by at least one auditor and get them approved at the ordinary shareholder’s meeting within four months from the closing date. These financial statements are then submitted to the Business Information Division under the Department of Business Development or any Office of Commercial Affairs within a period of 1 month from the date of obtaining the approval for financial statements. If the company does not furnish the audited financial statements, it will be treated as an offence, and the company shall be liable to pay a fine of up to TBH 50,000. Additionally, the authorised director, on behalf of the juristic person, shall also be liable for a fine too. Preparation of the list of shareholders It is the responsibility of the director of a company to prepare a copy of the list of shareholders’ names that are holding the company’s shares at the time the annual shareholders’ meeting is held and also a list of persons who are not the shareholders of the company anymore from the date of the last shareholders’ meeting and submit these two lists to the Department of Business Development or to any other provincial business development office within a period of fourteen days from the date of the meeting. Failure to submit the lists within the given time period may result in the imposition of a penalty of not more than 10,000 TBH. Filing of annual reports Every limited company registered in Thailand, both private and public, is required to furnish the following documents at the end of every accounting period: Name of the company; Type of business; Details of the directors of the company; Financial statements that have been audited; Profit and Loss Accounts; Balance Sheets; Minutes of the Annual shareholders’ meeting; and List of the shareholders on the date of the meeting. The local companies are required to prepare their documents in the Thai language for reporting purposes. However, foreign companies are permitted to prepare their documents in which they like, but they have to be translated into Thai at the time of submission. Both private and public limited companies in Thailand are required to have their financial statements audited by an independent auditor at the end of the fiscal year. The Accounting Act of 2000 makes it mandatory for all companies to retain their books of accounts for at least a period of 5 years from the date of their preparation. This time period can be extended at the orders of the Director General of the Revenue Department for a period of 7 years, depending on the type of business activities undertaken by the company. Accounting Standards Every Thai registered company, irrespective of its type, be it a Thai Limited Company, a partnership or a foreign company operating in Thailand, is obligated to maintain its accounts and undertake annual audits. All Thai registered companies are required to prepare their financial accounts in accordance with the Thai Financial Reporting Standards (TFRS). Lately, the government of Thailand has made great efforts to harmonise the TFRS with the International Financial Reporting Standards (IFRS). TFRS also contains certain elements that have gone beyond the mandate of the International Accounting Standards Board (IASB). Currently, the International Accounting Standards are pending adoption in Thailand. The SMEs in Thailand have the option to follow any one of the following two accounting standards: Thai Accounting Standard for non-Publicly Accountable Entities (NPAEs); and Thai Accounting Standards (TAS) However, foreign companies have been permitted to continue with the IFRS system. The Companies that are listed on the Thai Stock Exchange are required to prepare their financial statements and get them reviewed by Thai auditors on a quarterly basis. Holding Annual General Meetings (AGMs) According to the Thai Civil and Commercial Code, all qualified companies and partnerships are required to comply with the requirements related to holding Annual General Meetings (AGMs). A letter has to be issued by the Board of Directors to hold an AGM within a period of 4 months from the end of the fiscal year. The AGM must be held at least once a year and should have the following agendas: The minutes of the AGM have to be clarified for the previous AGM The director’s report on the company’s business activities has to be granted approval; The company’s operational results for the previous year have to be acknowledged; New Directors have to be selected in place of those that have been terminated; The auditors of the company are appointed, and their fees are determined; and Dividends of the company are also taken into consideration. The invitation for the shareholders’ meeting must be advertised in the local newspaper at least once and at least seven days in advance before the meeting date. Along with the advertisement, the company is also required to send the invitation via email to every shareholder named in the company’s registration at least seven days before the meeting date. It must be noted that the notice for the shareholders’ meeting to vote for an extraordinary resolution must be sent at least 14 days before the meeting date. Decision about the Tax year/ Fiscal year Thailand has a self-assessment taxation system, and the tax year/fiscal year for a company is generally set as the 12-month period ending on 31st December. However, a company has the freedom to choose its own accounting period, and it should not be more than 12 months. If a company chooses its own accounting period, then it has to inform the Director General of the Department of Revenue in Thailand. From April 2020 onwards, financial statements must be filed electronically with the Department of Business Development under the Ministry of Commerce. Preparation of the share certificates The company must prepare the share certificates of the company’s shareholders, or else the company will be subject to a penalty of not more than 10,000 TBH. Preparation of the book of shareholders A book of shareholders of the company has to be prepared, failing which the company shall be forced to pay a penalty of not more than 20,000 TBH. Relocation of the head office The companies that want to relocate the head office have to make a request to the Registrar. Failing to intimate the Registrar about the relocation of the head office may result in the imposition of a penalty which may not be more than 20,000 TBH. Registration of the modifications or Liquidation of the company Where a company chooses to make changes/modifications in the registered transactions or the shareholders want to liquidate the business, a request has to be made by the company for the registration of changes/ modifications or the registration of the company’s liquidation at the Dept. of Business Development or at the Office of Business Development District. The following are the types of modifications/changes that a company has to register: Modifications/ changes in the memorandum of the company before the company is incorporated Extraordinary resolution for company merger, capital increase or capital decrease Company merger Modifications/ changes in the memorandum of the company after the company is incorporated (company’s name/ company’s objective/ per value of shares/ per value of shares) Capital increase Capital decrease Company Directors Company Regulations Authority of directors Company seal Location of the head office and/or branches Other transactions that should be publicized Appointment of an Auditor The examination and audit of the annual financial statements for companies in Thailand must be undertaken by a certified independent auditor. The Thai Accounting Professions Act states that all Certified Independent Auditors are obligated to apply Thai Standards of Auditing while undertaking an audit of Thai companies. The opinion issued by the Certified Independent Auditor on the financial statements is required at the time of submitting tax returns and financial statements. Irrespective of the situation, whether the company is traded or not, every company has to undertake the annual statutory audit. There is only one exception to this rule i.e. those partnerships registered under Thai law whose total assets, capital and income are not more than the threshold prescribed in the Ministerial Regulations. Applicable Fees for Registration of Limited Companies in Thailand Types of Registration Thai Baht (TBH) Memorandum of Association 500 Merger of Companies 5000 Incorporation of Company 5000 Registration for: 1. Extraordinary Resolution (for capital increase/decrease/ company merger) 2. Capital increase 3. Capital decrease 4. Modification of the Memorandum of Association after incorporation of the company (company’s name/ company’s objective/ headquarters of the company/ per value of shares) 5. Modification in the liquidation of the company 6. Appointment of new directors 7. Resignation of the directors 8. Modification in the authority of directors 9. Change in the location of the head office and/ or branch office 10. Modification in the seal of the company 11. Other transactions that should be publicized 500 Liquidation of the company Change of liquidators 500 Modification in the authority of liquidators 500 Modification in the office of liquidators 500 Completeness of liquidation 500 Timeline for the submission of post-registration compliances in Thailand The following timeline has to be adhered to by every company to meet the requirements of post-registration compliance in Thailand: The form for incorporating a company has to be submitted within a period of 3 months from the date of holding the statutory meeting. The form for registering the appointment of new directors or resignation of the existing directors has to be submitted within a period of 14 days from the date of appointment and the resignation, respectively. The form for registration of the extraordinary resolution for increase in capital and decrease in the capital of the limited company or merger of the company within 14 days from the extraordinary resolution date. The form for registration of new regulation or modification of the company’s existing regulations must be submitted within a period of 14 days from the date of extraordinary resolution. The form for registration of the company’s merger should be submitted within a period of 14 days from the date of the merger. The form for registration of the dissolution of the company shall be submitted within a period of 14 days from the date of dissolution. The form for registration of the change of liquidators must be submitted within a period of fourteen days from the date of such change. The form for registration of the modifications in the liquidator’s authority must be submitted within a period of 14 days from the date when the meeting took place where the decision on modification was made. The form for registration of the completeness of the company’s liquidation must be submitted within a period of 14 days from the date when the resolution was passed in the meeting. The report of the partnership’s liquidation has to be submitted every 3 months, and the liquidator is required to submit the report within a period of fourteen days from the date when the 3-month period expires. The registration regarding incorporation, liquidation and modifications in the company can be registered online via the e-Registration system at the website of the Department of Business Development. A 50% discount can be availed by the applicant for using the e-Registration system as per the ministerial regulation. Penalties for non-compliance with Post-registration compliances in Thailand Those companies that fail to comply with the post-registration compliances mentioned above will be subject to monetary penalties, which may go up to TBH 100,000 (approximately USD 2,953). If a company tries to underestimate its profits by more than 25% for an entire year, it will be subject to a 20% surcharge. The percentage of surcharge may rise to 100% in case of incorrect filings. Further, the rate of surcharge may rise to 200% in case the business fails to file its returns. However, the amount of the penalty can be reduced by 50% if the taxpayer makes a written request to the tax officer.