Liquidation - Dissolution - Close Company in Thailand

How we serve to close - liquidate - dissolve company in Thailand.

Panwa would like to thank you for your interest on our provided information for closing of company registration – Liquidation of company, Panwa Group of Companies has supported a lot of clients for almost 10 years since the establishment of this kind of services, below is our guidelines in closing a private company in Thailand:

Scope of our services cover step below:

STEP 1. Registration for Closing of Company to the Ministry of Commerce (MOC).
To comply with the policy of Thailand, one must send an Invitation Letter for a Meeting to the Shareholders with the agenda for closing of company. The letter must be sent to the shareholders by local post (with advise of delivery) and advertise in the newspaper. This process will be taken effect within 14 days. Please note that this step is just to comply with the policy for closing of company. Once the process and all the requirements are completed, the MOC will release its confirmation of closing date of the company. The company must prepare its accounting until the confirmed closing date.

Also once the closing date of company is confirmed, the permanent closing of its Social Security Fund in the SSO must be done also (in case that you have staff here in Thailand).

STEP 2. To return the VAT Certificate (P.P.20) to the Revenue Department (RD).
After the confirmation of closing date from MOC is obtained, the company’s VAT PP.20 must be returned to RD. This step must be done within 15 days from the obtained closing date as referred above; the original VAT certificate must be returned. Case of any delay, penalty is Baht 2,000. Please note that the company is still responsible to submit the VAT form every month until the RD released its confirmation letter accepting the cancellation of its VAT.

STEP 3. The company’s Financial Statements (FS) for the closing period (at Liquidation date) must be prepared and will be audited by a Thai auditor.

STEP 4. To file Corporate Income Tax Form (PND. 50) with enclosed FS to RD.
The audited FS must be submitted to RD within 150 days from its closing date.

STEP 5. Registration of completion of clearance documents to MOC with enclosed FS.

STEP 6. VAT Cancellation approval from RD
As mentioned in STEP 2, the company is still responsible to submit blank VAT form every month until RD released its acceptance letter for VAT cancellation. Normally, RD will release the said letter within or earlier than 6 months from the date that VAT certificate is returned.

STEP 7. To return Tax ID to RD

Fee: Our fee base on below situations;

• Option A.- Our fee for registration of closing of company refer to item nos. 1,2,4,5,6,7 above (except preparation and audit of FS) is Baht XX,000.
  For preparation financial statement and audited by auditor (CPA) refer to step no.3 above, our fee will be based on the actual volume of documents and according to our accounting + auditing fee starting rate is Baht XX,XXX.
  
• Obtion B.- Special price for liquidation (closing) of a dormant company, we offer the best price for dormant company ( the company is inactive in business ) our fee for registration of closing of company including accounting and auditing fee is Baht 18,000 cover all step above.
• Remark
  - Our fees include meeting with the government officer for 2 times.
  - In case of sending documents to be signed outside Thailand, the above fee will have an additional charge of Baht 5,000.

Provision Cost for Closing Company (Company's Liquidation) provided by Panwa Group of Companies	Fee (Baht)
Closing down registration to Moc and RD - Scope of Service and Timeline as attachment - Our services include to be a representative to meet and declare company’s information to Government Sector free for 2 times.	10,000.00
Accounting, Auditing and Corporate Income Tax (Financial statement and auditing report provided in Thai and English) *** Please be informed that this fee for dormant company, case of active company pleae let us know more information of your company.	10,000.00
Filling monthly VAT return (Baht XXX per month) for estimated 6 months Case of you have registered VAT and you need us to continue filling monthly VAT return on your behalf. Normally need to filing approximate 6 months until obtain the approval letter for delete out of VAT system) *** this step can be done by your side***	?,???
Official fee and other expenses : - Government fee - Estimated Cost of advertisement in local newspaper (3 times) - Estimated Postage for invitation letter of the meeting (Sending 2 times; local is Baht 20 each, oversea Baht 95 each)	1,040.00 1,000.00 300.00
Totaling	22,340.00

 

Q & A
Q1: Juristic Company had notified the company’s dissolution to registrar of DBD, Ministry of Commerce on November 15, 2010 but registrar issued the certificate specifying that the registration of the company’s dissolution was accepted on September 9, 2005, in this case, which date was the date of dissolution? Panwa: In case of the company’s dissolution, the date of dissolution is the date that the registration of dissolution is accepted by registrar under Section 72 of the Revenue Code.
Q2: Accounting period can be over 12 months or not? Panwa: Accounting period over 12 months: the accounting period may be extended longer than 12 months for the case that juristic company or limited partnership is dissolved but liquidator and manager are unable to file tax return within 150 days from the last date of accounting period, and have submitted application to Director of Revenue Department within 30 days from the date that the company’s dissolution has been accepted by registrar, in this case, the Director of Revenue Department may approve the extension of period so this accounting period may be over 12 months. read more
Q3: My company has obtained boi privilege and now we plan to dissolve, it's can be done same as ordinary company or has further step? Panwa: It's not same ordinary company, the rough step and procedure as below: Procedures for closing a company with promotional privileges 1. To dissolve  the certificate with BOI before doing the step of  company’s liquidation at The Ministry of Commerce (Department of Business Development) To file application letter for dissolution of the approval for BOI’s project along with copy of approval BOI’s certificate. BOI will check the usage right of Machine/ Raw Material/ Income Tax In case of having liable tax on Machine/ Raw Material/ Income Tax, that liable tax needs to be submitted first. When completion of clean up all kinds of liable tax, the BOI will give approval for dissolution. BOI will do announcement for its dissolution and inform to related government sector for them to become aware on the situation. Remark: the above requested documents are not official form therefore, the company which intents to dissolve must be created by themselves with specifying full content inside for clearness and completeness. 2. To do ordinary step of closing (dissolution) company as mentioned above (step 1 to step 7). 3. To dissolve the Foreign Business License (FBL) with Bureau of Foreign Business Administration Department of Business Development Ministry of Commerce within 15 days from closing date of registration. Tor.1 Form Declaration Letter Original FBL license or original of its affidavit Authorization letter Copy of ID Card or Passport, certified by owner. Copy of ID Card of grantee, certified by owner Official fee for Baht 1,000.
Q4: We registered our company (in Thailand) in April 2010, till now (January 2011) We did not have any income yet, only the loss, - We are liable to report to the Revenue Department for the first year? Panwa: CIT (corporate income tax) for your limited partnership have to file within 150 days from the end of accounting period, and also need to enclose the audited financial statement. Withholding tax will be filed within 7 days of the following month. (Needed to file only in the case of having withheld tax). VAT will be filed within 15 days of the following month (either have transaction or not, still need to file the VAT form although no transaction) thus, if you did not apply for VAT, there is no need to file its form. Half year tax must be filed within 2 months from the middle of accounting period, for your case is the first year is exempted by law (no need to do filing). *** Anyway you can learn more information about “Tax Structure in Thailand” at our website at: http://www.panwagroup.com/knowledeaccountingtax.htm - Is the accounting period can be ended after December 2010 since the company had registered the accounting period on December of every year and we decide to close company now? Panwa:  Accounting period is not allowed to be over than 12 months, for you case the company was set up on April 2010 so you can extend the accounting period up to the date before the incorporation date of your company, so the date of closing (liquidation) company can be extended up to that date also. Anyway if you follow our recommendation to extend the accounting period to be date before incorporation date, please be informed that some kind of registered document (incorporated documents) may be needed to re-apply for changing such as Tax ID card, VAT registration (PP.01), from my experience no need to re-apply for changing now.

Information summarized by:
Ms. Myra Bago
Incorporated Adviser
For more information, please feel free to contact us:
Phone Nos.: +66(0)2-933 6121, +66(0)2-933 6122, +66(0)2-933-5601
(for call inside Thailand use 0 instead of +66)
Fax: +66(0) 2 933 6120
Email: mgr@panwagroup.com

Other information for closing company:

To become successful, a business must make decisions that enable it to operate profitability and to stay solvent. A company that has sufficient cash to pay its debts promptly is said to be solvent. In contrast, a company that finds itself unable to meet its obligations as they fall due is called insolvent. A business that becomes insolvent may be forced by its creditors to stop operations and its existence.

Entrepreneurs and business owners tend to closed down their businesses in certain circumstances. Sometimes, selling the business is not the remedy. Various alternative ways can be adopted for business closure such as winding up or statutory liquidation and simply deregistering the business. Each ways has certain legal and cost implications especially costs of closure including employees’ benefits and separation pay.
When you have decided to close your business, there are many things to be considered like a number of issues, such as company and business name cancellation, employee payments, cancellation of taxation registrations and other related concerns.
At Panwa Group, we will guide you in the process of closing down your business. Our team provides professional tax advice that can help you minimize your tax liabilities and possible losses. We offer quality and timely service in dealing with government sectors, and other entities involved in this process.
There are some factors to be considered in closing down a business:

• Business closure preparation
• Owner’s responsibilities
• The cost of closing down
• Tax and VAT issues
• Insolvency and Bankruptcy

Cancel - Closed Company Registration
You can cancel a company’s registration if:

• all members of the company agreed to deregister; and
• No creditor is seeking to liquidate the company.
• the company is incapacity to carryon business
• the company's assets are worth less than the desired capital; and
• the company has paid all fees and penalties payable under the laws of corporation
• the company has no outstanding liabilities; and
• the company is not committed to any legal proceedings.
• All business liabilities have been paid.
• All company assets have been distributed in accordance with the Business Act and the company constitution.
• You have written notice from the Revenue Department stating that they have no objection to the company being removed.
• If you are filing for a formal removal you have a copy of the special resolution of the shareholders that the company be removed from the register.
• If your company has been in liquidation the liquidator has filed the prescribed final reports and accounts

Other people to be informed:

• Creditors - who may have claims on any remaining assets in the business
• Clients or customers - to finalize your accounts for taxation purposes, any outstanding receivables should be collected
• Suppliers – to cancel any pending contracts

Other things to be cancelled and closed:

• Bank accounts
• Leases on any business equipment or premises
• Rental agreements
• Telephone connections
• Utilities such as water and electricity connection

Closing a business can be stressful. If you are seeking for professional advisers and specialist, and you wants to know information on what to do when you close down your business, please feel free to contact us.

For more information or need above services, please feel free to contact us:
Phone Nos.: +66 2933 6121, +66 2933 6122, +66 2933 5601
(for call inside Thailand use 0 instead of +66)
Fax: +66 2933 6120
Email: mgr@panwa.co.th
Please CC: to our alternate email: panwagroup@gmail.com