Setting up a foundation in Thailand
Establishing a Foundation in Thailand
Anyone can register his organization as a company, association, or foundation without any official non-profit or another related status available, in Thailand. Hence, a foundation is the status to work in the charity or non-profit domain. In Thailand, such foundations are obliged to pay tax on any ‘profit’, which means that if your income for that tax year is more than your outflow, then you are required to pay the taxes. But, foundations have to pay only 1% tax on these ‘profits’. The Thai Foundation establishment is a commonly used vehicle for humanitarian persons to share their blessings to the less fortunate segment.
From a legal point of view, a foundation is considered as a recognized juristic person that can get into contracts, carry out legal actions, and much more. However, foundations generally work to serve the society, either for the good of everyone or to focus on making the lives of a specific target group better. Foundations can collect aids and donations for their operations and can also give receipts as a company does.
A foundation is basically a firm that is established with the aim of helping charity, religion, science, literature, education, or any public interest and supporting to improve them. They are established by using the resources donated by individuals, families or businesses, and this money is invested by the foundation. The income made out of these donations is then utilized to make grants and organize programs. The trustees, directors and or member are restricted by law to take any benefits directly from the profits earned by a foundation in doing its charitable duties. As per law, it is also necessary for a foundation to get registered with the registrar of the district that has jurisdiction over the place where the principal office of the foundation will be located.
A foundation must conform to the following obligations as per Thailand’s law:
1. The foundation should have allocated assets as the source of funding for its operation.
2. The funds earned by the foundation should only be utilized in carrying out its objectives. These activities may be related to activities in public interest, religion, art, science, literature, education, and similar events. It must not be used for any personal benefit.
3. The assets and income earned should be spent for activities directly related to the intentions of the foundation only. It should not be shared among the foundation members.
4. The founders of the organization should register the foundation as a juristic person. And, a foundation must possess these: (1) name, office and objectives (2) assets and resources that are the operating fund and (3) a board of committee members with a set of regulations.
To start a foundation in Thailand, you need to submit a duly comprehensive application to the registrar of the district having jurisdiction over the place where your principal office will be located. Besides the application, some other details required are:
1. List of the owners’ assets
2. List of allotted assets of the foundation
3. A registered document having written promise to donate the assets
4. A copy of the will or testament if an asset was endowed by a testator to the foundation
5. Details such as name, address and work profile of all the members of the board of directors in the foundation
6. Rules and regulations of the body
7. Copy of any of the identification cards issued by the government
8. Copy of census registration of the owners and members of the board of directors (in case of a priest or a foreigner, the related papers that prove their status are acceptable)
9. Location map of the principal office and its branch offices (if any)
10. Written consent of the landlord or owner of the property on which the foundation is built
11. Details of the minutes of the meeting with respect to the discussion about foundation’s establishment
After submitting all the above documents, the registrar will cross check if there is any other foundation with the same name. If none, then he will evaluate the goals of the proposed foundation to ensure if they are related to the duties under the National Council of Cultural Affairs’ control. And, if they are, then he will then forward the application to the council for final approval.
Once approved, the organization will be registered. After the issuance of the registration certificate, the Foundation can start operating.
Process to set up a Foundation in Thailand
The interior rules and regulations for starting up a Thai Foundation under the Thailand Ministry are mentioned in the legislation of The Regulations, Operation, and Registration of the Foundation B.E. 2545 (2002).
For registering a Thai Foundation, the application form must be submitted to the registrar of the district which has jurisdiction over the place where the Foundation will be set up.
The total assets of a Foundation in Thailand must be of 500,000 baht, with a minimum of 250,000 baht in cash. Some charitable objectives also let a Foundation to have assets of 250,000 baht only, and 100,000 baht in cash.
After receiving the above-mentioned documents, the District Office will conduct an evaluation of the application. It will then transfer the application to the Ministry of Interior. If the Thai Foundation possesses any goals that are related to any other department of the government, then the Ministry of Interior will forward the application to the concerned department for consideration.
The complete application process may take nearly a year. And, then the applicant will be informed of the decision of the Ministry of Interior.
Why you need experienced consultants
The process of application to start a Thai Foundation gets much complicated if you are the first timer. It may nearly a year’s time for processing. This is because of the registration processes that include detailed document requirements in the Thai language.
You would need professional lawyers and consulting firms in Thailand who know the language and possess other expertise needed to communicate on your behalf and help in successfully setting up your foundation.
That startup business consulting firms also offer help to build effectual tax solutions for your Foundation. They have excellent field experience and can advise clients in right way to assess tax liabilities, overcharging, exemptions and incentives offered by the government of Thailand.
Selecting a startup consulting firm in Thailand that specializes in international law will help you in setting up a Foundation in Thailand. It will ensure that the foundation is properly registered and no legal difficulties are faced in the future.