Corporate compliance requirements
When operating a company in Thailand, it’s essential to comply with the secretary service requirements mandated by the country’s regulations. Secretary services play a vital role in the smooth functioning and legality of your business operations. However, understanding and fulfilling these requirements can be challenging, especially for entrepreneurs new to the Thai market.
In this comprehensive guide, we’ll demystify Thailand’s secretary service requirements for companies and explain how Narai Partners can assist your business in meeting these obligations. By partnering with Narai Partners, you’ll benefit from their professional experience and proven track record, streamlining your operations and ensuring compliance with Thailand’s complex business regulations. Equip your SME with the right tools and expert guidance to thrive in the Thai market by understanding and implementing the necessary secretary services.
Statutory Requirements of Secretary Services in Thailand
Thai law stipulates that all registered companies, including SMEs, must fulfill specific secretary
service requirements to ensure their business operates legally and maintains accurate records.
The requirements for company secretaries in Thailand are governed by the Civil and Commercial Code and other applicable regulations, depending on your business’s structure and industry. Some of the critical statutory requirements include:
- Appointing a qualified company secretary who meets the qualifications established by Thai law.
- Holding Annual General Meetings (AGMs) and keeping a record of these meetings.
- Ensuring timely submission of accurate financial reports and statements.
- Maintaining and updating legal records, such as company registers, shareholder records, and Board of Directors’ details.
- Communicating with the Department of Business Development (DBD) and other relevant authorities.
Failure to fulfill these requirements may result in penalties, fines, and potential legal complications affecting your SME’s operations and reputation.
Key Roles and Responsibilities of a Company Secretary
A company secretary in Thailand is responsible for overseeing various administrative, legal, and compliance tasks that ensure your SME runs smoothly and according to the law. Some of the essential roles and responsibilities of a company secretary include:
- Organizing, attending, and preparing minutes for Board meetings, AGMs, and Extraordinary General Meetings (EGMs).
- Filing and updating statutory records and documents with the DBD, Revenue Department, and other relevant authorities.
- Advising the Board of Directors on legal, regulatory, and governance matters.
- Ensuring compliance with legal obligations, company policies, and best practices.
- Acting as a liaison between your company and external regulators, auditors, and legal counsel.
By engaging a skilled and professional company secretary, you ensure that your Thai SME is well-prepared to navigate the complex regulatory landscape and maintain compliance with all
relevant laws and regulations.
Benefits of Outsourcing Secretary Services to Narai Partners
Outsourcing your secretary services to a professional service provider like Narai Partners offers several benefits to your SME, including:
- Expertise and Experience: Narai Partners boasts a team of highly skilled and experienced professionals who understand Thailand’s complex laws and regulations and can guide your SME through fulfilling its secretary service requirements.
- Time and Cost Savings: By outsourcing these tasks, your business can dedicate more time and resources to focusing on its core operations, which can lead to significant time and cost savings.
- Flexibility and Scalability: Narai Partners’ secretary service offerings are designed to adapt and scale with the needs of your business, ensuring that your SME remains compliant as it grows and evolves.
- Reduced Liabilities and Risks: Partnering with Narai Partners’ secretary service can help you mitigate the risks of non-compliance, potential legal issues, and penalties that may arise due to inaccuracies or omissions in meeting the secretary service requirements.
How Narai Partners Can Assist Your SME with Secretary Service Requirements
Narai Partners offers a comprehensive range of services to help Thai SMEs fulfill their secretary service obligations, including:
- Assistance with Appointing a Qualified Company Secretary: Narai Partners can help you find and appoint a company secretary who meets the professional qualifications required by Thai law.
- Meeting Management: Narai Partners’ team of experts can aid your SME in organizing, preparing for, and documenting Board meetings, AGMs, and EGMs.
- Statutory Records and Filings: Narai Partners can oversee the maintenance and updating of statutory records, such as company registers, shareholder records, and Board of Directors’ details. They can also handle filing necessary documents with the Department of Business Development (DBD) and other relevant authorities.
- Legal and Regulatory Advice: Narai Partners’ experienced professionals can provide guidance on legal obligations, regulatory matters, and best practices for your SME.
- Liaison with External Regulators and Auditors: Acting as a link between your SME and external entities, Narai Partners ensures effective communication and coordination with regulators, auditors, and legal counsel.
By outsourcing your secretary services to Narai Partners, your SME can leverage their expertise and experience while benefiting from the advantages of outsourcing, including increased efficiency, reduced risks, and cost savings.
Key Considerations When Outsourcing Secretary Services
When outsourcing your secretary services, it’s essential to choose a reputable, experienced,
and reliable service provider like Narai Partners. To ensure you make the right choice, consider the following:
- Verify the provider’s expertise and demonstrated experience in working with Thai SMEs across different industries.
- Assess their knowledge of Thailand’s legal and regulatory framework, as well as their ability to stay up-to-date with changes and emerging trends in business laws.
- Evaluate their track record of successfully fulfilling secretary service requirements for other SMEs.
- Inquire about the provider’s technology and systems, as modern tools can streamline processes, improve communication efficiency, and reduce the likelihood of errors.
- Examine the provider’s pricing model and make sure there are no hidden fees or additional costs.
By conducting thorough research and considering these factors, you’’ll ensure that your Thai
SME partners with the right service provider to manage its secretary service requirements effectively and efficiently.
Declaring a dormant company
If you wish to temporarily suspend business operations or anticipate a need for a company in the future, companies in Thailand can be classified as dormant.
What is a dormant company?
A dormant company, commonly referred to as a shelf company, is an officially registered entity that remains inactive and does not participate in any business activities.
What are the benefits of a dormant company?
The advantages of maintaining a dormant company include:
- Future Business Use: Instead of dissolving your company, opting for dormancy allows you to retain the entity for potential reactivation in the future. This approach can streamline the process of relaunching the business, eliminating the need to establish a new company.
- Advanced Company Setup: You can proactively establish a company and declare it dormant for an indefinite period, provided you adhere to accounting requirements. This preemptive measure offers flexibility for future business endeavors.
- Intellectual Property Protection: Dormant companies play a crucial role in safeguarding your company’s name, preventing its use by other entities. Maintaining dormancy ensures that your company name, as well as other intellectual property such as logos, slogans, or designs, remains protected.
- Cost Reduction: Opting for a dormant status for your Thai company can lead to decreased maintenance costs. You’ll only need to manage annual accounting obligations and rental fees for virtual offices, reducing overall operational expenses.
- Investment Vehicle: A dormant company can serve as an effective investment vehicle. By holding stocks or assets of another company, it provides a strategic means of diversifying investments and managing corporate assets.
Annual compliance requirements of a dormant company
A dormant VAT-registered company is required to submit monthly VAT returns, even if there are no business transactions. Failure to do so may result in a fine of THB 500 per month.
In addition, corporate income tax returns must be filed twice a year, i.e. once every six months and once a year.
The company’s financial statements must be audited by a qualified auditor and submitted. Failure to submit financial statements for three consecutive years may result in the company being removed from the Department of Business Development (DBD) system, thereby classifying it as a defunct company.
To reinstate a defunct company, a formal application must be made to the court for an order authorizing the Registrar to reinstate the company in the system. This procedure follows the guidelines set out in Article 1246(6) of the Civil and Commercial Code.
