Closing Company - Liquidation of Company - Dissolution of Company Registration in Thailand Bangkok and Phuket, secretarial service including staff recruitment, virtual office, scanning and filling of office documents, opening and closing bank account, messenger services

Closing Company Registration ( Liquidation of Company - Dissolution of Company Registration )

We thank you for your interesting on our provided information for closing of company registration ( Liquidation of company or

Greeting from Author

Prasert Poothong (Mr.PP)
CPA and Director

Email: bkk@panwa.co.th

WhatsApp & mobile: +66 81 919 6225

you can call via WahtsApp at +66 81 919 6225

Hi there Visitors and Prospected Clients,

Many times when I heard that “it’s very difficult to close down .......
read more

We can help you more for:

Documentation relate to terminate staff, office rental and etc.
Meditor and cordinator between your company and other party
Manage to move and storage your all assets
Monitor your remaining assets here in Thailand with take photo sometime
Storage your documentation and handling all matters with government sector

Meeting with Mr.Prasert (PP)

We can explain step by step and also can esitmate provision cost, tax, penalty and compensation relate to this dissolving company.
(Free of Charge)

Dissolution 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 fee, guidelines, timeline and other information in closing a private company in Thailand:

Fee: Since the step of closing of company is very complicated, our fees will depend on 2 cases:

Case 1. Fee for closing dormant company is Baht 25,000. Please see conditions and "Provision Cost" as below:

Provision Cost for closing Dormant Company provided by Panwa Group of Companies

Fee (Baht)

Closing down registration to Moc and RD
- Scope of Service refer to procedure step nos. 1,2,3,5,6,7 below (except preparation and audit of FS)
- Our services include to be a representative to meet and declare company’s information to Government Sector free for 2 times.

15,000.00

Accounting, Auditing and Corporate Income Tax
(Financial statement and auditing report provided in Thai and English)
*** Case of active company please let us know more information.

10,000.00

Filing monthly VAT return (Baht XXX per month) for estimated 6 months - Can be done by your side
Case of you have registered VAT and you need us to continue filing monthly VAT return on your behalf. Normally needs to do filing for approximately 6 months until the approval letter for delete out from VAT system is obtained)

?,???

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 37 each, oversea Baht 125 each in Southeast Asia zone)

1,040.00
1,500.00
300.00

Total

27,840.00

Case 2: Our fee for registration of closing active company refer to item nos. 1,2,3,5,6,7 below (except preparation and audit of FS) is Baht 20,000 (starting rate). For preparation of financial statement and to be audited by auditor (CPA) refer to step no.3 below, our fee will be based on the actual volume of documents and according to our accounting + auditing fee starting rate is Baht XX,000, for the fixed fee please send us more information of your company.

Procedure and Timeline

Our procedure will be finished within 1 month, below is the sample of timeline. Assume that we have obtained information for closing company from your side by completing the "Closing Company - Enquiry Sheet" before Jun 1, 2017, so below is the simple process and timeline of closing company registration.

Timeline Procedures

Jun 1

STEP 1. To advertise in local newspaper and sending invitation letter for a shareholders meeting
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 local 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.

Jun 15

STEP 2. Registration for Closing of Company to the Ministry of Commerce (MOC).
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.

Jun
16 - 28

STEP 3. 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

Jun 28

STEP 4. The company’s Financial Statements (FS) for the closing period (at Liquidation date) must be prepared and will be audited by a Thai auditor.
And request the company's liquidator to sign the financial statement and Corporate Income Tax Return and other documents for step 6 below.

Jul 1
STEP 5. To file Corporate Income Tax Return (PND. 50) with enclosed FS to RD.
The audited FS must be submitted to RD within 150 days from its closing date.

Jul 1 STEP 6. Registration of completion of clearance documents to MOC with enclosed FS.

Jul 2 STEP 7. To return Tax ID to RD.

STEP 8. VAT Cancellation approval from RD
As mentioned in STEP 3, the company is still responsible to submit monthly VAT return 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.

Remark:

Dormant Company means a company without any business activity; most of dormant company has purpose to standby for doing business.

Please note that for step 2 of closing of company, all of signatory director must come here in Thailand for signing the registration form and for step 6 only remaining director (from registered of step 2) must come here in Thailand to sign the registration form.

Q & A

Q1: Juristic Company had notified the company’s dissolution to registrar of DBD, Ministry of Commerce on November 15, 2015 but registrar issued the certificate specifying that the registration of the company’s dissolution was accepted on September 9, 2016, 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, can it be done same as ordinary company or has further step?
Panwa: It's not the same with ordinary company, the rough step and procedures are 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) on April 2016, til now (June 2017) 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 or 15 days via online of the following month. (Needed to file only in the case of having withheld tax).
VAT will be filed within 15 days or 23 days via online 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 2016 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 2016 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.

Q5:

5.1 - We has a bank balance of Baht 10,080 in its books. Is the bank closure also forms part of your service when doing the liquidation?

Panwa: To close bank account is not including in above package, but if needed by you, we also can propose by 2 options as below;

a. We can arrange all paper and your director bring to bank by themselves, the fee is Baht 2,000.

b. We can arrange all peper and our team will support at the Bank too, the fee is Baht 5,000.

5.2 - If yes, are the Directors required to be present when closing the bank as well?

Panwa: Yes, of course all bank signatory (signatory director) must be physically present at bank when closing the banks.

5.3 - Would it be better to close the bank first before we proceed with the liquidation?

Panwa: Yes, better to minimize the account to be clousre before start to process the liquidation.

Q6: Now our plan is to immediately close the Rayong factory and liquidate/sell all of its assets. Some of the questions we have at this time are :

1. What are the tax/BOI implications of:

Selling factory properties (land and building )
Selling the inventory of imported materials locally (in Thailand) or selling/shipping outside of Thailand.
Selling factory equipment locally vs. selling/shipping outside of Thailand
Selling finished goods for local market.

2..Are there labor or severance pay considerations (when we do the layoffs)?

3. And may I know the way to do layoffs our emaployee legally?

Panwa: Before start to answering this 3 queiries, we would like to brief you step by step first.

The step of close the company and return the BOI certificate, should be started from:

A.To return the BOI card (certificate).

A-1.Cleaning up for raw material, machinery and equipment.

To clean up raw material which got tax’s exemption when imported to Thailand, by selling locally / selling (or shipping) to oversea / or destroy.

To clean up machinery, equipment which got tax’s exemption when imported to Thailand, you can clean up same way of above raw material

A-2 Taxation:

For raw material, if
a.selling locally need to pay import tax for the exemption when imported to Thailand.
b.Selling oversea is no need to pay import tax.

For Machinery,
a.Selling locally need to pay import tax for the exemption when imported to Thailand, be calculated based on the value remaining (NBV = cost of asset – accumulated depreciation)
b.Selling oversea is no need to pay import tax.

A-3 Estimated import tax.
It’s need to know about more the remaining value of raw material / NBV of assets / estimated market price of land and properties.
A-4 Procedure
For step of cleaning up and return BOI certificate, actually we are not expert into BOI procedures and application although we have served mainly in BOI customers but it's relate to taxation (corporate income tax), with this we had asked to BOI officer but the result is not enough to explain you due to depend on the detail of each company and the person who answering requested a lot of information before they explain.

However I have long relationship with somone named Mr.A... (BOI advisor) whom help our customer for many years and heard that the step of cleaning up and return BOI card will spent time minimum for 3 months and case of using his service the fee is start from Baht 100,000 depend on the case, I still believe your staff is able to do this anyway. Case of need his consultation, his fee is Baht 5,000 per hr., you can contact him directly at phone No. +66 81 XXX XXXX or No. +66 86 XXX XXXX.

B.Step of closing down the company,

Normally can be done after Revenue Department get the approved letter from BOI office about return the BOI card, below is rough step for closing down the company.

STEP 1.To advertise in local newspaper and sending invitation letter for a shareholders meeting
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 local 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.

STEP 2.Registration for Closing of Company to the Ministry of Commerce (MOC).
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.

STEP 3.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 4.The company’s Financial Statements (FS) for the closing period (at Liquidation date) must be prepared and will be audited by a Thai auditor. And request the company's liquidator to sign the financial statement and Corporate Income Tax Return and other documents for step 6 below.

STEP 5.To file Corporate Income Tax Return (PND. 50) with enclosed FS to RD.
The audited FS must be submitted to RD within 150 days from its closing date.

STEP 6.Registration of completion of clearance documents to MOC with enclosed FS.

STEP 7.To return Tax ID to RD.

And we refer to your queries, please see my comments as below:

Q6-1.What are the tax/BOI implications of –

(a)Selling factory properties (land and building )
Panwa: Yes, it’s subject to corporate income tax and it’s should be informed to BOI office too about its selling.

(b)Selling the inventory of imported materials locally (in Thailand) or selling/shipping outside of Thailand.
Panwa: Selling locally is subject to import tax (exemption in the past), selling oversea is no import tax(exemption in the past).

(c)Selling factory equipment locally vs. selling/shipping outside of Thailand
Panwa: Same as selling raw materials but the import tax(exemption in the past) will be calculated based on NBV of factory equipment, selling oversea is no tax.

(d)Selling finished goods for local market.
Panwa: if over the condition of BOI certificate, the import tax (exemption in the past) should be paid too.

Q6-2.Are there labor or severance pay considerations (when we do the layoffs)?

Panwa: Employee Layoff Payout = Advance Notice Pay + Severance.

Severance:
120 days but less than 1 year service = 30 days severance
1 year but less than 3 years service = 90 days severance
3 years but less than 6 years service = 180 days severance
6 years but less than 10 years service = 240 days servance
over 10 years = 300 days

(refer to Labour Protection Act B.E.2541 Section no. 118)

Q6-3; And may I know the way to terminate our employee legally?

Panwa: You should start to issue the "Notice of Termination" to all employee, below is a sample letter, anyway you should discuss with your lawyer before start this.

Notice of Termination

Employee Name:         ………………………
Position:                      ………………………
Joining Date:               ………………………
Terminate Date:          ………………………

We regret to inform you that the termination which will be effective on April 8, 2017. The company shall pay severance pay to you whose employment is terminated, under the Labour Protection Act B.E.2541 Section no. 118 including shall pay special severance pay in addition to the regular severance.

Miss ……………………… is an employee who has been working continuously for 2 years 7 months but has not completed 3 years, it shall be paid as following detail:

Baht

1. Severance pay base on basic pay for not less than 90 days at the last wage rate

2. Special severance pay on unnotice in advancea equal to the rate of the last wage for 30 days
__________

Total pay

=========

According to confirm this letter, we hereby you to be sign accepted as above.

………………………………………………………………
Mr……………………………….
Managing Partner
Sample AAA Company Limited

………………………………………………………………
Miss …………………………
Employee

Q7: the Company has a negative net asset as you will see in its audited accounts of latest period. Would that create unnecessary questioning during the liquidation process?

Panwa: It's not the big point due to the negative in net asset is the main reason for liquidation but the core reason must be presented also that's why you can't run the business.

Q8: I just found out my accountant had not filed my company balance sheet since 2013 was the last one, and we prefer to close this company within this year is possible (currently 12 of Dec)?

As information we have had from your email and government website, found that your company has registered in year 2014 Baht at Phuket with capital of Baht 2.5 million and the latest year of filing is 201?2?, so we can propose you rough (estimate) fee and penalty as below:

Estimated provision cost until closing of this company are consisted of:

Service fee for	Baht	Remark
- Year 2013 (discounted)	12,000	Scope: Accounting, tax, auditing and its submission and filing for D?epartment of ?Business ?Development (DBD)? and R?evenue ?D?epartment (RD).?
- Year 2014 (discounted)	12,000
- Year 2015 (discounted)	12,000
- Year 2016	15,000
- Service fee for closing company (liquidation)	35,000	Scope: we will register for closing at DBD and RD this service including we will be representative to declare tax of company for free 2 times. ?And we have to register for closing date within this year so better to start immediately.?
- Travelling cost for Phuket	6,000	2 trip of registration
- Case of VAT registration, service fee for filing from year 2013 to 2016	24,000	If non VAT registration company, you can waive for this cost.
- Case VAT registration, service fee for filing from year 2013 to 2016	6,000	Still have to file for minimum of 6 months until VAT be cancelled from the Revenue Department.
Total for service fee (A)	92,000

Government & Tax fee:
- For company’s closing	2,840
- Special Business Tax	10,000 (estimated)	Only case of your company don’t bring the capital fund to spend into business or deposit into company’s bank account or Baht 2,000 per year.
Total Government fee and Tax (B)	12,840.
Penalty
- Penalty for late submission for DBD of year 2016 (for 1 director)	12,000
- Penalty for late filing of corporate income tax of year 2016	4,000
- Penalty for VAT, if your company has VAT registration and didn't submit for the past 12 months)	6,000
Total Penalty (C)	22,000

Total (A+B+C)	126,840

Remark:

The above were proposed based on your company can register for closing within this year, if not so we have to charge for financial statement and its submission of year 2017 for another of Baht 15,000. Therefore please give us bellow information so that we can review in detail of your company and start the process as soon as possible.

In Phuket we don’t have an office but we have one messenger staff who can meet you for your signature and pick up document at your place.

We serve many customer in Phuket a month and we have long experience for company closing (liquidation).

Timeline:

Step of financial statement and its submission, we can finish year 2013 to 2016 within 1 week.
Step of tax filing, normally we can finish within 3 working days after you sing into financial statement and tax return but for some kind of tax such such as PND.53 and SBT are allowed for filing only period 1 - 7 of every month, that mean we can file during 1st to 7th of January.
Step of ??closing company, normally can be finish within 40 days from the closing date except having some tax issue with Tax Authority. We believe for a pure dormant company is still closing under our plan.

Greetingf from the author, Mr. Prasert Poothong
CPA Thailand and Director of Panwa Group of Companies

Hi there Visitors and Prospected Clients,

First of all, your visit on our website especially this page “closing down company in Thailand” is very much appreciated. We do hope our information will be satisfied to you and will solve all of your queries; we try to summarize related knowledge, procedures, find the easy way and also the resolution to attain the completion of closing down company of yours here in Thailand.

The summary of procedure, timeline and knowledge for closing down company above is the rough information that can be applicable for small company size but for the medium – large size especially owned or managed by foreigner it really needs to set the plan for its liquidation (closing) and have to minimize remaining balance, clean up all problem of tax point before coming to closing period or at least closing registration date.

By the way, I can say that the closing company who is owned or managed by foreigner (or foreign company) is very complicated especially the step of checking by tax officer, although I have long experience in the field of auditing and tax advisor, I still find it confusing that some cases checked by officer using their own concept to apply tax checking is different with principal taxation law.

Before creating this webpage, as I am auditor and advisor, I’ve got a lot of queries and met many affected results from the unplanned process for closing down company and in-conversant foreigner into Thai Tax Structure and also liquidation law and regulations especially no plan on tax and accounting before closing, some of them close business with the effects on a huge tax amount and penalty and some still in the judicial process or leave their company (without complete of closing down registration). Whenever I heard these points, my feeling is so bad that’s why I tried to summarize this webpage for you who have endeavor to clean up all kinds of problem for closing down company.

As I am auditor who are very conservative in publishing information and try to set framework content for you to clarify on overall structures, some content and information are hardly to disclose and explain on this publication, in case you have further information or need to know in deep details of any matters related to setting up company in Thailand, you can contact me either via email at bkk@panwa.co.th or phone +66 2 933 6121 (to 2).

Best Regards,

Mr. Prasert Poothong,
CPA Thailand, Director of Panwa Group of Companies
Personal profile
CPA License
Profile - 2013
Panwa Auditing License

For more information, please feel free to contact us:

Call to Mr.Prasert:
WhatsApp:. +66 81 919 6225
Line id:

Office Phone Nos.: +66 2 933 9000
Email: panwagroup@gmail.com
WhatsApp : +66 81 919 6225

Bangkok Address:
1560 Ladprao Road, Kwangwangthonglang, Wangthonglang, Bangkok 10310, Thailand.

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.