Investing in Asia Pacific 2015: Thailand
Australia | China | Hong Kong | India | Indonesia | Japan | Korea | Malaysia | Singapore | Taiwan | Thailand | Vietnam
Audit | Tax | Advisory
All lasting business is built on friendship.
Alfred A. Montapert
TABLE OF CONTENTS
5
Introduction
7
About Crowe Horwath International
8
Establishing the business entity
10
Tax information
12
IPO quick facts
16
Human resource requirements
17
Withdrawal procedures
Investing in Asia Pacific
with Crowe Horwath International
INTRODUCTION
Welcome to the Crowe Horwath International “Investing in Asia Pacific
2015: Thailand” guidebook.
This guide forms a part of the “Investing in Asia Pacific 2015” series and
provides a quick reference for those interested in investing in Thailand.
While it is not exhaustive, this guide aims to answer some of the key
questions that may arise. When specific issues arise in practice, it will
often be necessary to consider the relevant laws and regulations and to
obtain appropriate professional advice.
The guidebook will cover five main topics as follows:
Establishing the business entity
Tax information
IPO quick facts
Human resource requirements
Withdrawal procedures
5
Business is in itself a power.
Garet Garrett
ABOUT CROWE HORWATH
INTERNATIONAL
The Crowe Horwath network consists of more than 200 independent
accounting and advisory services firms and in over 120 countries
around the world.
Crowe Horwath International member firms are known for their local
knowledge, expertise, and experience balanced by an international
reputation for the highest quality in audit, tax, advisory and risk
services. They are unified through a shared commitment for
impeccable quality service, highly integrated service delivery
processes and a common set of core values and management
philosophies that guide their decisions daily.
This unique combination of talent provides Crowe Horwath
International the worldwide capabilities of a highly integrated network
to deliver value to multinational clients doing business across
borders.
7
THAILAND
Establishing the business entity
Contact
Atipong
AtipongSakul
AUDIT PARTNER
atipong@ans.co.th
Sathien Vongsnan
AUDIT PARTNER
sathien@ans.co.th
ANS AUDIT CO., LTD.
Bangkok
+662 645 0109
Thanapat Pupat
FIRM FOUNDER
ATTORNEY-AT-LAW
TAX ADVISOR
MAGNUS & PARTNERS
BANGKOK
thanapat@
magnuspartners.com
+662 652 5160
Nattanan
Ploujinda
SIAM CITY LAW
OFFICES LIMITED
BANGKOK
nattanan@
siamcitylaw.com
+662 676 6667
8
1. Formation and costs
Company
The Civil and Commercial Code governs private limited companies. The Code defines “limited
company” as a company which has a capital divided into equal shares and the liability of the
shareholder is limited to the amount of payment remains unpaid on the shareholder’s shares. A
company may be incorporated by at least three (3) promoters filing a memorandum of association,
holding a statutory meeting, and registering the company with the Department of Business
Development, and all incorporation / registration procedures may be completed in one (1) day.
A company may be required to obtain a license to do business under a particular law, depending on
the nature of the business. The Civil and Commercial Code requires a company to hold an annual
general meeting of shareholders once a year and one (1) of the meeting agenda is to approve the
audited financial statements. The government fee for registering a company is THB 5,000 for every
one (1) million Baht registered capital with a maximum fee of THB 250,000. Other government fees
are nominal.
Branch
There is no law which defines the term “branch”. A branch is commonly known as a branch office of
a company incorporated in Thailand and / or a branch office of a foreign company incorporated
outside Thailand (the parent company) and seeking to do business in Thailand in the form of a
branch office. The first case is straight forward and only registering a branch office with the
Department of Business Development under the Civil and Commercial Code is sufficient.
The branch office of a foreign company may be established in Thailand in the form of a private
limited company whose majority shares are held by the parent company, or alternatively, the parent
company is present in Thailand and proceeds to apply / obtain a license to do business in its own
name, and in such case, the parent company is considered by law as doing business in Thailand
(however, such entity is commonly referred to as branch office).
In both alternatives, the branch office is regarded as “foreigner” under the Foreign Business Act (ie.
the law which governs foreigner doing business in Thailand); as a result, it may be required to obtain
permission before it commences the business under the Foreign Business Act. The processing time
to apply / obtain the license is 60 days. The license fee is calculated based on the amount of the
applicant’s registered capital and the fee is in the range between THB 20,000 to THB 250,000.
Representative Office
There is no law which defines the term representative office. A representative office (RO) is
commonly referred to as a representative office of a foreign company registered outside Thailand
and seeking to do business in Thailand in the form of a representative office. The Foreign Business
Act (FBA) is the law which governs the establishment of a representative office. The FBA allows a
representative office to carry on “non-trading businesses” only and the scope of businesses must be
limited to those provided for the head office’s benefit, not other persons, as follows:
1.
2.
3.
4.
5.
reporting business movements in Thailand to the head office;
giving advice relating to the head office’s goods to the head office’s customer;
finding the source of the goods in Thailand for the head office;
performing quality control on the head office’s goods; and
distributing information regarding the head office’s goods to potential customers in Thailand.
The services in these items one (1) to five (5) are considered as FBA regulated businesses;
therefore, a representative office is required to apply / obtain a license to carry on these businesses
from the Department of Business Development under the FBA. The processing time to obtain the
license is 60 days. The license fee is calculated based on the amount of the applicant’s registered
capital and the fee is in the range of THB 20,000 to THB 250,000.
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Investing in Asia Pacific 2015
2. Investment incentives
Company
The Investment Promotion Act is the law which promotes local and/or foreign investments in
Thailand. The Office of the Board of Investment (BOI) is the authority which administers the
Investment Promotion Act. The Act provides tax and non-tax incentives to a successful applicant
seeking to do business in Thailand. The non-tax incentives are; for example, permission to bring
foreigner to stay and work in a project, permission for foreign investor to own land for use as the site
of the business, permission to remit foreign currency out of Thailand, etc.
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The tax incentives are; for example, corporate income tax exemption, import duty exemption or
reduction on machinery or raw materials brought into the country for manufacturing, etc. The tax
incentive period is varied, depending on the location of the business (referred to by the BOI as
“investment promotion zone”), and the maximum corporate income tax exemption may be up to
eight (8) years. The BOI announces the lists of the businesses eligible for investment promotion
from time to time. Interested applicants may apply for the investment promotion at the BOI, which
will be reviewed and approved in about 45 days.
Branch
Same as for company.
Representative Office
Representative offices are not eligible to investment incentives under the Investment Promotion Act.
3. Foreign ownership restrictions
Company
The FBA is the main law which governs foreigner doing business in Thailand. The FBA defines
“foreigner” as a person without Thai nationality, a company registered outside Thailand, and a
company registered in Thailand and having the foreigner(s) holding the shares at 50% or more of
the total shares of the company. The FBA provides the lists of businesses, known as List One, List
Two, and List Three, in which the foreigner may not engage.
List One Businesses are prohibited to foreigners without exceptions. A foreigner may carry on a List
Two Business only if he has obtained permission from the Minister of Commerce with the approval
of the Cabinet. A foreigner may carry on a List Three Business only if he has obtained permission
from the Department of Business Development with the approval of the Foreign Business
Committee whose members consist of the representatives from the public and private sectors.
For the business which is not classified in Lists One, Two, or Three, it is permissible to foreigner; for
example, manufacturing own products for local or export sales. A foreigner which receives an
investment promotion to carry on a business under the Investment Promotion Act, but such business
is a business restricted to the foreigner under the FBA, in such case, the foreigner must first proceed
to obtain a written confirmation from the Department of Business Development confirming that he is
allowed to carry on that business throughout the period of his investment promotion.
Branch
Same as for company.
Representative Office
Same as for company.
4. Work permits and visas
Company
The Foreigner Employment Act is the law which governs foreigner working in Thailand. The Act
defines “work” as performing a work, whether by using knowledge or otherwise, in return for
consideration. The Act requires foreigner to apply, obtain, and carry a work permit before he starts to
work. The Act provides the list of work, which is not permissible to foreigner; for example, legal
service, civil works engineering.
A foreigner who wishes to apply for a work permit must file a work permit application with the Labor
Department and it takes about 14 days to review and approve the application. A foreigner should be
employed, not self-employed, and his employer (i.e., company) may sponsor a work permit
application for him, and in such case, according to the practice of the Labor Department, the
company (i.e., his employer) must have a registered and fully paid-up capital at THB 2 million in
order to sponsor one work permit application.
Branch
Same as for company.
Representative office
Same as for company.
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THAILAND
5. Accounting standards and audit requirements
Company
The local standards in compliance with IFRS has been announced in 2011 for all Publicly
Accountable Entities (PAEs) except for some standards related to Financial instruments.
However, the accounting standards for Non-Publicly Accountable Entities (NPAEs) are already
effective in 2011. Hence, NPAEs can consider to transition their FS reporting to either accounting
for NPAE or Thai Financial Reporting Standard (TFRS).
Branch
Can consider to transition their FS reporting to either accounting for NPAE or TFRS.
Representative office
Same as for branch.
6. Residential directors / promoters requirements
Company
The Civil and Commercial Code provides that a company must be managed by a board of directors.
Only a shareholders’ meeting has a right to appoint and / or remove a director. A company may
have a number of directors as wished. The director may be Thai or non-Thai national, as wished.
The day-to-day business operation is managed by a Managing Director, who is appointed by a
shareholders’ meeting from time to time. A company must also have authorized director(s), i.e., the
director(s) whose signature(s) binds the company. Only a shareholders’ meeting appoints the
authorized director(s).
The Civil and Commercial Code provides that at least one-third of the number of directors must
retire at an annual general meeting of shareholders every year; however, these directors may be
re-elected for another term. For the director’s fee, it is only fixed by a shareholders’ meeting.
Branch
Same as for company.
Representative office
A person who manages a representative office is commonly referred to as “representative”. Such
person is appointed by the representative office’s parent company and his particulars must be
lodged with the Department of Business Development. Representative offices are only allowed to
have one representative.
7. Foreign ownership over tangible assets
Company
The Land Code prohibits foreigner from owning land. The Code defines “foreigner” as a person
without Thai nationality or a company which has foreigner(s) holding the shares from 51% of the
total shares in the company. A foreigner may receive exemption under a specific law to own land.
For example, the Investment Promotion Act allows a foreigner who receives an investment
promotion to own land for use as the site of the business. A foreigner is not only not allowed to own
land, but also other property, such as building, house, vehicle, etc.
Branch
Same as for company.
Representative office
Representative offices are not allowed to own land.
Tax information
1. Tax rates on corporate income
For SME:
The income tax reduction grants corporate which have paid-up share capital on the last date of
accounting period not exceeding THB 5 million and revenue from sales of goods and rendering of
services for the accounting period not exceeding THB 30 million by exemption corporate income tax
for net profit not exceeding THB 300,000 and at the corporate income tax rate of 15% for net profit
exceeding THB 300,000 but not exceeding THB 1 million and at the corporate income tax rate of
20% for net profit exceeding Baht 1 million for the accounting period beginning or after January 1,
2013 onwards.
For other entity:
There is a reduction in the corporate income tax rate from 23% to 20% on net profit for the two
consecutive accounting periods beginning on or after January 1, 2013 onwards.
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2. Other taxes
Good and Services Tax (GST)
Not applicable.
Value Added Tax (VAT)
Value Added Tax is collected from:
a. sale of goods; and
b. provision of services.
Sale means to include hire purchase, delivery of the goods to
the agent to sell, etc. Service means performing a service in
return for consideration. Value Added Tax liability on a sale of
goods arises on certain circumstances; for example, transfer
of ownership in the goods, or receive the price of the goods, or
issue a tax invoice.
Value Added Tax on a provision of services arises on certain
circumstances; for example, receive the service fee. Currently,
the value added tax rate is 7%. A service provider who
provides services to his employer abroad is not required to
charge value added tax on the service fee, instead he is
required to remit the value added tax on the service fee to the
revenue office.
Other taxes
For example, specific business tax which is collected from
certain transactions provided in the Revenue Code; such as
money lending, buying and selling of land; or land and house
taxes, etc.
3. Branch income
The branch office of a foreign company which does business in Thailand must pay a corporate
income tax on net profits at the rate of 20%. However, the representative office need not because it
does not carry on (and is not allowed to carry on) trading business.
4. Income determination
Capital gains and dividends are considered as assessable income under the Revenue Code;
therefore, a tax payer must include these income items in his other assessable income so that the
whole amount is taxed. For the capital gains and dividends which are remitted to investors abroad, it
must be subjected to a deduction of withholding tax at the rate of 10%.
5. Deductions
Deductions are allowed for all expenses which are for making a business's profit purpose. However,
there are some deductions according to Thai Revenue Code which shall not allow to deduct as
expense.
6. Group taxation policies
Not applicable.
7. Tax incentives
In Thailand, there are tax incentives for a company who carries a business in Thailand; for example,
Regional Operation Headquarters (ROH). ROH incorporated in Thailand will enjoy tax privileges; for
instance, reduction of corporate income tax rate from 20% to 10% or tax exemption on dividends
received by ROHs from associated enterprises.
8. Withholding tax
Remittance overseas are subjected to withholding tax at the following rate; however, the rate may be
reduced according to a relevant Thai tax treaty.
Dividends
Interest
Royalties
Technical fee
Branch profit
10%
15%
15%
15%
10%, if distributed to a parent company abroad.
9. Tax administration
The tax payer must file a corporate income tax return every half year of each year, including filing
another tax return within one month after approval of the audited financial statements in the
following year. For VAT, it must be filed once a month, on every 15th day of the following month,
regardless that there is VAT transaction in the preceding month.
10. Taxable incomes for non-residential companies and individuals
Depending on the relevant tax treaty between Thailand and a particular country, income in the form
of business profits; such as service fee, consulting fee, etc., is considered as “business profits”
under the tax treaty; therefore, it may be exempted from a withholding tax if it is paid to a person not
do business in Thailand in the form of a permanent establishment as defined in such tax treaty.
Notwithstanding the tax treaty provisions, income in the form of dividends and royalty fees are
subject to a withholding tax at the rate of 10% and 15%, respectively.
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THAILAND
IPO quick facts
1. Bourses in the country
a. The Stock Exchange of Thailand (SET).
b. Market for Alternative Investment (MAI).
2. Admission requirements
The Stock Exchange of Thailand (SET)
a. Company size (Paid-up Capital)
≥ THB 300 million after IPO.
b. Trading record
Must have been in operation for at least three (3) years; and the total value of ordinary
shares based on market capitalization must not be less than THB 5,000 million.
Must have the same company management for at least one (1) year prior to the application date;
Must have had net profit all of the followings:
i. Combined minimum net profits from operations of THB 50 million over the past two (2) or
three (3) years;
ii. Net profit from operations of THB 30 million for the latest full year, and
iii. Net profits from operations in the year of filing the listing application, as shown by
combining all quarterly results for that year.
For a privatized state enterprise, operations prior to privatization will be considered as a
continuation of operations.
c. Public shareholding requirement
1. Number of minor shareholders / Non-strategic shareholders:
≥ 1,000 shareholders.
2. Strategic shareholders:
Hold ≥ 25% of paid-up capital for companies with THB 300 million ≥ paid-up capital <
THB 3,000 million.
Hold ≥ 20% of paid-up capital for companies with paid-up > THB 3,000 million.
3. Number of shares cumulatively offered for sale:
paid-up capital < THB 500 million.
≥ 15% of paid-up capital.
paid-up capital ≥ THB 500 million.
≥ 10% of paid-up capital or THB 75 million in shares, whichever is higher.
d. Qualitative requirements
Have a stable and healthy financial condition and have sufficient working capital.
Have a minimum total shareholders’ equity of THB 300 million.
Qualifications for management and control persons should be in line with Securities and
Exchange Commision (SEC) regulations and they should not possess any characteristics as
prohibited by the SEC.
Duties and responsibilities must be clearly defined as specified by the SEC.
Have good corporate governance practices and a qualified audit committee as specified by
the SET.
Have effective auditing and internal control systems as specified by the SEC.
Have no existing or potential conflicts of interest as defined by the SEC.
Market for Alternative Investment (MAI)
a. Company size
≥ THB 20 million but lower than THB 300 million.
b. Trading record
The operation under the management of most executives in the same group must have
been continued for not less than one (1) year prior to the submission of an application.
There shall be the shareholders’ equity not less than THB 20 million.
The operational results must have existed for net profit in the latest year and there shall not
be less than two (2) years prior to the submission of an application, and there shall be
accumulated net profit in the period prior to the submission of an application; or
The operational results must have existed for not less than one (1) year prior to the
submission of an application, and the total value of ordinary shares based on market
capitalization must not be less than THB 1,000 million.
c. Public shareholding requirement
≥ 300 shareholders. The aggregate number must not be less than 20% of the paid-up
capital, and each of must hold not less than one (1) board lot of shares as prescribed by the
Exchange for the trading of ordinary shares.
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Public offering:
1. The accumulated number of shares already offered for sale must not be less than 15% of
the paid-up capital.
Crowe Horwath International
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2. The shares must be offered for sale through underwriters.
3. For the shares to be offered for sale, application for approval must have been made and
approval have already been granted by SEC except where the applicant is a juristic
person established under a specific law.
THAILAND
d. Qualitative requirements
The management and any person who has controlling power shall not possess any prohibited
characteristics and violate any regulation.
There shall be procured good corporate governance system by having qualified independent
directors and members of the audit committee to supervise the application’s operations in order
to meet the standards and ensure pursuit of proper direction and there shall be an established
internal control system under the rules prescribed by the Notification of the SEC.
There shall be no conflict of interest according to the criteria specified in the Notifications of the
Capital Market Supervisory Board.
3. Specific requirements for specific industries
Criteria for companies engaged in infrastructure projects
In its bid to encourage companies engaged in infrastructure projects, the SET has provided special
listing requirements for securities in this category. The requirements which apply to such companies are
the same as those that apply to a general company, except there is no requirement for a three-year
track record. Furthermore, business operations and market capitalization are not required for these
companies. The applicant must comply with any additional requirements as follows:
Additional Requirements
Nature of Business
Have a concession period of > 20 years with > 15 years remaining as of the
application date, or obtain specific permission from a government agency / state
enterprise, or possess a contract to sell products/services which can generate
stable revenues.
Sources of Finance
Possess confirmed and sufficient sources of finance.
Criteria for holding companies
i. The applicant must comply with all criteria for listed companies in general, except for the track
record and market capitalization criteria.
ii. The applicant must also hold shares in a core subsidiary in one of the following ways:
At least 75% of the core subsidiary’s paid-up capital;
At least 51% of the core subsidiary’s paid-up capital if the core subsidiary is involved in an
infrastructure project; and
At least the minimum percentage defined by the SEC if the core subsidiary’s operation is in a
foreign country.
iii. The majority of the applicant’s management team has also been management of the core
subsidiary for at least one (1) year before the application date, except for an applicant that is a
financial institution that is required by a government agency or the core company that engaged in
infrastructure project.
iv. The applicant must have control over the core subsidiary.
v. Once listed, the applicant must maintain its shareholding in the core subsidiary for at least the three
(3) following years during which any change of shareholding in the core subsidiary will be allowed
only if a qualified substitute is provided.
4. Typical issuance size
SET: No. of shares cumulatively offered for sale
Paid-up cap < THB 500M: > 15% of paid-up capital
Paid-up cap > THB 500M: > 10% of paid-up capital or THB 75 million, whichever is higher
MAI: >15%of the paid-up capital.
5. Moratorium imposed
A silent period is required for one year after listing. This means strategic shareholders, who hold at least
55% of the firm’s paid-up capital after the IPO, are prohibited from selling their shares and securities
during the first six (6) months after listing. They will be permitted to sell a maximum of 25% of the
locked-up shares every six (6) months thereafter. Specific requirements and conditions for infrastructure
will be difference from general conditions.
Strategic shareholders are:
Directors, managers, and executive management, including related persons and associated persons
Shareholders who have a holding above 5%, including related persons.
6. Securities quoted allowed in foreign currency
No.
7. Requirements for the appointment of a resident / local director and board composition
Board of Directors must consist of at least five directors with at least 50% of the Board members having
their residence in Thailand.
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To be listed on the Stock Exchange of Thailand, the issuer is required to set up an audit committee
to monitor good corporate governance. The composition of the committee and qualifications of audit
committee members are listed below. The committee must:
Consist of at least three directors, with at least one member having financial and accounting
knowledge;
Be appointed by the board of directors and shareholders;
Not have any non-executive director, executive officer, employee or advisor who receiving a
regular salary from the applicant;
Be free of any financial or other interest in the company’s management and business;
8. Restrictions for foreigners
No specific restriction.
9. Methods of offer and restrictions
None.
10. Timeline
Description
Six (6) months
before listing
application
filing
Study relevant rules and regulations such as the Public Company Act, SEC
rules and regulations governing the issue and the offering of securities to
the public, and SET listing rules and regulations.
Appoint a financial advisor approved by the SEC.
Discuss company information with a financial advisor in order to examine
the applicant’s qualifications and make appropriate adjustment as needed in
accordance with relevant requirements.
Plan for information preparation and make schedules.
Restructure shareholding of the applicant and the other companies in the
group, eliminate existing or potential conflict of interest, and establish a
good corporate governance.
Prepare financial statements and other accounting reports in line with
acceptable accounting standards.
Establish an audit committee and appoint independent directors.
Two (2) to five (5)
months before
listing application
filing
Transform into a public limited company.
Prepare an initial public offering (IPO) application and relevant documents.
Plan for and study pricing and distribution of securities.
Prepare public relations plan.
One (1) to two (2)
months before
listing application
filing
Establish provident fund.
Appoint share registrar.
Submit IPO application to the SEC.
Prepare for company visit and management interview by the SEC.
Prepare listing application and relevant documents.
11. Approving authorities
The Stock Exchange of Thailand and the Securities and Exchange Commission of Thailand
12. Estimated cost involved
Application Fee
Initial Fee
Annual Fee
SET
THB 50,000
0.05% of paid-up capital
Min. THB 100,000
Max. THB 3,000,000
Regressive rate varies by the
level of paid-up capital as follows:
(capital: million baht)
rate
< 200
0.035%
200 < capital < 1,000
0.030%
1,000 < capital < 5,000 0.025%
5,000 < capital < 10,000 0.020%
> 10,000
0.010%
Min. THB 50,000
Max. THB 3,000,000
MAI
THB 25,000
0.025% of paid-up capital
Min. THB 50,000
Max. THB 1,500,000
0.02% of paid-up capital
Min. THB 25,000
Max. THB 1,500,000
Notes: 1. Annual fees will be calculated based on listing duration.
2. Paid-up capital includes all listed paid-up shares of common and preferred stocks
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13. Restriction on secondary listing or dual listing
None.
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14. Language required for:
a. Prospectus: Thai
b. Annual reports: Thai
c. Audit reports: Thai
15. Audit opinion required for
a. IPO
Non qualified.
b. After IPO
Not specific.
16. Requirements of accounting auditors to be appointed
Locally approved by SEC.
17. Delisting standards from bourses
Ordinary shares may be delisted upon occurrence of any of the following events:
a. The ordinary shares do not meet all the qualifications pursuant to the part of qualifications of
listed securities in the regulations of the Exchange governing listing of securities.
b. The listed company has paid-up capital specifically for the ordinary shares in an amount not
less than 60 million baht (only for SET).
c. The listed company violates or fails to comply with the laws governing securities and
exchange, regulations of the Exchange, listing agreement executed with the Exchange as well
as any circulars required by the Exchange for compliance, which may seriously and adversely
affect the rights, interests or decision of the investors or the change of price of the securities.
d. The listed company discloses false information in the application, financial statements or
report submitted to the Exchange or revealed to the general public, which may seriously and
adversely affect the rights, interests or decision of the investors or the change of price of the
securities.
e. The listed company fails to disclose material information or makes a mistake in disclosing
material information, which may seriously and adversely affect the rights, interests or decision
of the investors or the change of price of the securities.
f. The listed company’s operation or financial condition falls within any of the following cases:
1. The assets used in the operation of the listed company has significantly lessened or are
going to significantly lessen as a result of the sale, disposition, letting, separation, operation
suspension, abandonment, destruction, deterioration, seizure, expropriation or any other
case resulting in the same effect;
2. The operation is halted entirely or almost entirely for any reason whatsoever, regardless of
whether such halting of operation is due to the act of the listed company or any other
person;
3. The auditor issues a disclaimer or an adverse opinion on the financial statements of the
listed company for three (3) consecutive years;
4. The financial condition disclosed in the latest audited financial statements or consolidated
financial statements shows that the shareholders’ equity is lower than zero (0).
In case that the financial condition under the first paragraph (ie. from f.1 to f.4) does not show that
the shareholders’ equity of the listed company is lower than zero (0), but the auditor has issued a
qualified opinion, or a disclaimer, or an adverse opinion on the financial statements or consolidated
financial statements, and the Exchange is of the opinion that it may substantially affect the financial
condition of the listed company, the Exchange may consider the financial condition of the listed
company by adjusting the condition from the report issued by the auditor and apply the rules
prescribed in the first paragraph as it deems appropriate.
Consideration of the financial statements or consolidated financial statements under the first
paragraph and the above paragraph shall be made from the audited financial statements for the
period ended June 30, 1998 onwards.
g. The listed company enters into liquidation to dissolve its business.
h. The listed company is under receivership by a court order or under any similar circumstances.
i. The listed company does any act which may seriously damage the interests of the
shareholders.
j. The nature of business operation of the listed company is not suitable for it to remain a listed
company.
k. There is a change in the listed company’s shareholding in its subsidiary companies or
associated companies and such change in shareholding seriously and adversely affects the
results of operations, financial condition and liquidity of the listed company.
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Human resource requirements
1. Special labour standards to take heed of
The Act on Safety, Health, and Environment in Work 2011 is a new law which governs safety,
health, and environment in a work place. The Act became effective in 2011. The purpose of the Act
is to establish, manage, and control the safety standard, including health, and environment in a
work place with intent to protect human resource. The Act is administered by the Ministry of Labor.
The Act requires the employer to establish certain safety standard, health, and environment in his
work place in order to ensure that there is no injury to the life, body, mental, and health of his
employee; and likewise, his employee is required by the Act to co-operate and assist him in such
arrangement. Safety standard is announced in a Ministerial Regulation from time to time and on a
case-by-case basis, depending on the nature of the business. All expenses in making the safety
standard available at the work place is borne by the employer.
2. Social welfare: insurance, pension, etc
The Social Security Act 1990 is a law which governs the employee social security. The Act is
administered by the Ministry of Interior. The Act considers the employee as “insured person”
whereby he (or his heir) receives certain compensation in the case of his disability, death, or others
during his employment. The Act requires the employer to deduct a sum of money from the
employee’s wage at each payment and remit it to a social security funds account, including for the
employer to remit another funds from the employer’s own account to such social security funds
accounts.
The Act also requires the government to remit another fund to such account. These funds are
intended for use as the employee’s expenses in the case of his disability, giving birth (for women
employee), child support, or death during his employment or termination of employment. The social
security funds account is established by the Act and monitored by the Office of the Social Security,
Ministry of Interior. The amount of the contribution is fixed from time to time by a Ministerial
Regulation on a case-by-case basis, depending on the nature of the business. For the employee
pension and/or insurance, there is no law which requires the employer to make them available for
the employee.
3. Requirements for retirement benefits
The Provident Funds Act 1987 is a law which intends to provide “savings money” to the employee
when his employment is terminated for any reason. The Act is administered by the Ministry of
Finance. The Act provides an option to both the employer and the employee to agree whether or
not they wish to enter into a provident funds; that is to say: the provident fund is optional, not legal
mandatory.
In the event that there is such agreement, the employer is required to deduct a sum of money from
the employee’s wage at each payment and remit to a provident funds account, including to
contribute another funds from the employer’s own account and remit to such provident account
where the total funds may not be withdraw by either the employer or the employee throughout the
period of employment. The provident fund account is administered by a licensed provident fund
company approved by the Ministry of Finance. When the employee’s employment is terminated for
any reason, the employer is required to instruct such provident fund company to return the
provident funds in full amount to the employee.
4. Legal annual leave and public holidays
The Labor Protection Act 1998 is a law which provides legal annual leave and public holidays. The
Act is administered by the Ministry of Labor. The Act requires the employer to fix the national /
traditional holidays of not be less than thirteen (13) days including the Labor Day and announce
them to the employee for information in advance.
The Act also provides that the employee who has worked for one (1) year is entitled to an annual
leave of not less than six (6) days. For the employee who has worked for more than one (1) year,
he is entitled to an annual leave holiday which may be more than six (6) days as may be agreed
with his employer in advance. In addition, the Act allows the employee to take personal leave, or
military training leave, or motherhood leave for the number of days as may be agreed with his (her)
employer in advance. These leave days are in addition to the statutory national traditional holidays.
5. Brief information on labour unions
The Labor Relation Act 1975 is a law which governs a labor union. The Act is administered by the
Ministry of Interior. The Act provides that a labor union may be established solely by the provisions
of the Act. A labor union may be established by at least ten (10) employees acting as the promoters
and it must be registered so that it is valid by law. The purpose of the labor union is to enhance the
benefits of both the employer and the employee and promote their relations.
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The labor union is required to take actions for the benefits of the employees, as follows:
demand, negotiate, and agree on the employment terms with the employer;
manage and proceed to obtain benefits for the employees;
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provide information on employment recruitment to the employees;
provide consultation when there is a labor dispute;
provide fringe benefits to the employees; and
collect the membership fee in the amount provided in the labor union’s regulation. The business
of the labor union is managed by a Chairman of the Labor Union appointed by a General Meeting
of the labor union from time to time. The labor union must prepare, maintain, and keep its
financial accounts and books and have them audited once a year by auditor.
THAILAND
Withdrawal procedures
1. Company: legal procedures required for liquidation
The Civil and Commercial Code provides that a company may only be dissolved by a resolution of a
shareholders’ meeting. The shareholders’ meeting also appoints liquidator(s), who may be the
company’s existing director(s) or anybody else to liquidate the company. The liquidator has a duty to
collect the company’s assets in order to pay the company’s debts, including to hold a shareholders’
meeting to report the facts of the liquidation to the shareholders from time to time. During the liquidation,
the company is allowed to continue pending business transactions and complete them only, but not to
start new business transactions, and these pending businesses must be carried-out by the liquidator.
The liquidator may return capital to the shareholders only if and after he has paid the company’s debts.
The Civil and Commercial Code provides that during the liquidation process, if the liquidator finds that
the company’s assets are not sufficient to cover the company’s debts, the liquidator must (i.e.,
mandatory, not optional) apply to the court for an order declaring the company bankrupted. When the
liquidation is completed, the liquidator is required to file an application with the Department of Business
Development in order to confirm such completion. The liquidator must also inform the Revenue
Department, which will inspect the company’s tax returns to see whether or not all taxes were paid
correctly, before the company is allowed to close the business.
2. Company: tax requirements
While the company is still under liquidation, the liquidator is still required to file a corporate income tax
return, including value added tax return, if any, and when the liquidation process is completed, the
liquidator must also file a corporate income tax return as of the date of completion of the liquidation with
the Revenue Department.
3. Branch: legal procedures required for closing branch
Same as for company.
4. Branch: tax requirements
Same as for company.
5. Representative office: legal procedures required for closing office
Same as for company.
6. Representative office: any tax requirements
Not applicable.
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