Dormant Company (Sleeping or Shelf company) in Thailand
How we serve Accounting, Auditing and Corporate Income Tax for a dormant company in Thailand (Shelf company in Thailand).
Fee : Baht 13,000 per year covers the below:
Fee : Baht 2,000 if need to provide the step of AGM below:
(Our fee, excluding tax amount, actual cost for step of AGM)
Scopes of service for - Dormant company; a company without business activity.
- Preparation of Yearly Financial Statement with certified and audited by Certified Public Accountant (CPA, Thailand).
- Preparation of secretarial documents consisted of: Corporate Income Tax (PND.50) Form, CompanyInformation Submission (Sor.Bor.Chor.3) Form, Shareholders’ List (Bor.Oor.Jor.5) Form.
- We will be applied as chartered accountant (with bachelor degree in Major of Accounting) to Ministry of Commerce (MoC) as accountant of your company.
- To file(submit) to related government consists of: The Revenue Department (RD) and MoC.
- Step of AGM, to follow the enforcement of the Civil and Commercial Code sector 1175 regarding the “Sending of Invitation Letter for annual shareholders meeting”, it’s effect to the approval for the financial statement of year ended December 31, 2009 and onward, therefore all company must send the notice (letter) to invite all shareholders for holding of the annual meeting by post with advice of delivery service and must publish in a local news paper, both procedures require to be done at least 7 days before the meeting date (case of extra-ordinary meeting require at least 14 days).
Remark
- Dormant Company means a company without any business activity; most of dormant company has purpose to standby for doing business,
- This fee is valid until February 28, 2010 (may change after this date) and can provide to limited clients.
- Step of AGM, Company Limited must follow the enforcement of the Civil and Commercial Code sector 1175 regarding the “Sending of Invitation Letter for annual shareholders meeting” which can be done by you, for more information Click Here .
Basic information on documents to be prepared and filed to related government (in Bangkok area)
The Revenue Department at company’s area.
- Financial Statement with certified by auditor (CPA Thailand), 1 set.
- Corporate Income Tax Form (PND.50)
Deadline: within 150 days from fiscal year of accounting period.
The Ministry of Commerce
- Financial Statement with certified by auditor, 2 sets.
- Sor.Bor.Chor.3 Form, 2 set.
- Bor.Oor.Jor.5 Form, 1 set.
Deadline: within 1 month from Annual General Meeting (AGM) and AGM must be held within 4 months from fiscal year of accounting period.
Q & A
Q1: What are Government expected tax amount I have to take in consideration for one year?
Panwa: Taxation of dormant company base on kind of related tax below;
a. Corporate income tax (CIT), imposed base on “net profit” below is tax rate for year 2008(2009 may be change);
Net profit |
Incentive for SME
Capital not exceeding
Baht 5 million |
Ordinary company
Capital exceeding
Baht 5 million |
0 – 150,000 |
0% |
30% |
150,001 - 1,000,000 |
15% |
30% |
1,000,001 – 3,000,000 |
25% |
30% |
Over 3,000,000 |
30% |
30% |
Normally, net profit will be calculated by = Income – Expenditure, for this should concentrate on kind of income as below situation:
- You put capital fund into bank( such as saving account), this kind of income is “Interest from Bank”
- You do not put that capital fund into bank that mean still keep in your bank, that fund must be recorded as “Loan to director”, this kind of income is “Interest” form its loan. Applicable interest rate for this borrowing is 4% per annum.
Example; Case study:
Capital is Baht 10 million, Expenditure Baht 20,000 for 1 year period, tax amount will be paid is Baht
(4%10,000,000 – 20,000 = Net profit = 380,000 Baht,
CIT - Tax amount = 30%380,000 = Baht 114,000 per year)
**SBT – Tax amount = 3.3% of 400,000 = Baht 13,200 per year, will be paid when settle interest of loan.
Remark; We advise you avoid a huge of tax amount by 2 ways below:
- 1. Setting up company with capital no exceeding Baht 5 million
In the same case study; tax amount for capital Baht 5 million is
CIT = Baht 4,500 per year.
**SBT = Baht 6,600 per year.
- 2. Setting up company with capital no exceeding Baht 5 million and paid up only 25% of registered capital.
In the same case study; tax amount for capital Baht 5 million with paid up capital 25% is
CIT = Baht 0.00 per year.
**SBT = Baht 1,650 per year.
b. Half year tax, except for the first year, for the second year and onward will be paid at least 50% of CIT, and can use its tax as credit amount for CIT’s calculation at ending period.
c. Monthly withholding tax, will withhold and be paid within 7th day of the following month. Normally, dormant company no business activity will no withholding tax amount.
d. VAT, there are no requirement for registration of dormant company because of income still not exceeding Baht 1.8 million. VAT registration can be done later when start the business activity.
e. **Special Business Tax (SBT), base on “Interest Income” from “Loan to director” by applicable tax rate is 3.3% per annum. |
Q2: In case of Dormant Company should a real capital be shown in Balance Sheet? (I mean transfer of cash amount in a bank account in Thailand.)
Panwa: Most of new registered company in Thailand were not real put the capital fund into bank account of company, they only declare on step of registration by certify on documents that the shareholder had put that fund to company account already (likely keep into individual of shareholders’ account or keep on hand of shareholder that mean shareholder or director keep on behalf of the company and waiting for put to company bank account in future without specific time).
Anyway please notice that government concentrate for alien or alien company to carry on business in Thailand for using nominee (illegal), Government require Thai shareholder (nominee) to present their capital fund (individual’s bank statement) in order to prove that Thai Shareholder have ability to do business and be real shareholder (not nominee) by declaring that statement when registration company, if this company fall into 2 situation below
1) Alien hold the share more than 40% up to 50% or,
2) Alien hold the share lower than 40% and be the director. |
Q3: Is there any restriction or delay about starting business activities from the moment of the Dormant Company creation date?
Panwa: No restriction for delay of activity from the registration date of dormant company. Anyway case of registration VAT, Revenue Dept will delete out form their data if no business activity within 1 year that mean you can re-apply again when start business. So I commend when setting up company no need to apply VAT.
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Q4: What would be your fees when passing from Dormant Company to Active Company?
Panwa: Our fee base on kind of services below:
a,
Our fee for setting up company is Baht 15,000 (plus Baht 5,000 if sending documents to sign outside Thailand), for further information of setting up company such as timeline, procedure, required documents, provision cost and etc, you can visit our website at:
http://www.panwagroup.com/setupcompanythailand.htm
b. Our fee for lump sum package of dormant company is Baht 13,000 (or 14,000, if request step of AGM) per annum cover CIT (yearly tax), audited financial statement including submission to related government sector.
c.
Monthly withholding tax, normally no need to submit for dormant company because of no business activity. Case of need our fee is Baht 3,000 per month.
d.
VAT, normally no need to apply that mean on need to submit. If you need our fee is Baht 3,000 per month, by the way it’s will free of charge for item no. c.
e.
Half year tax is Baht 3,000 per year. Exception for the first year submission.
*** IF cover all services item b to item e, we can propose you with lump sum amount is Baht 40,000 per year. This option including our team will be a representative to meet and declare when be requested or investigated by tax officer. *** |
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
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