Charities or non-profit organizations, or NPOs are Foundations in Thailand. The ‘Foundation’ is the vehicle through which individuals and organizations carry out charity and non-profit work. Therefore, ‘Foundations’ have to pay tax on any ‘profit’ received. However, this is applicable when income for the tax year exceeds outflow. The current tax rate for these ‘profits’ is 2-10% depending on the source of income, which is significantly lower than any other juristic person / legal entity.
‘Foundations’ are legal bodies that can carry out certain duties, such as instituting legal actions, employing people, sponsoring visas/work permits, and so on. In general, these organizations work for the ‘benefit’ (mutual or specific) of society, and they have the authority to collect money and issue receipts for their ’cause.’
Eligible Causes to Form Foundations in Thailand
In Thailand, forming a ‘Foundation’ necessitates the creation of a ‘Cause,’ which is essentially a purpose, mission, aim, goal, vision, direction, and so on. Because there will be a need to declare a target zone of work, the Applicant should be clear about the area of outreach. A ‘Foundation’ is a ‘Cause’-specific entity that must function in accordance with its ‘Cause’ / objectives or risk losing its registration. Therefore, understanding the Foundation’s spectrum of target activity is critical.
Membership Eligibility to Form Foundations in Thailand
A minimum of three individuals must work for the ‘Foundation’ on a total volunteer basis.
There must be at least three individuals on the Board of Directors, with a minimum of four offices, which are:
- Director
- Assistant Director
- Secretary
- Treasurer
These volunteers’ responsibilities are similar to those of employees in the same position. The Board of Directors must give proof of identity, personal information, and other information.
Required Financial Capability to Form Foundations in Thailand
For the purposes of the ‘Foundation,’ 200,000 THB – 500,000 THB placed into a bank account is necessary, depending on sustainability; this must be verified by a letter from the bank verifying that the abovementioned amounts are so existent, which will be lodged with the application.
The ‘Foundation’, on the other hand, is prohibited from opening a bank account prior to registration, and funds must be deposited into someone’s (someone associated with the ‘Foundation’) account prior to registration, funds that will be transferred to the ‘Foundation’s new account after registration.
Also, keep in mind that the first 200,000 THB must be kept in the bank account permanently and may only be used for the same bank’s interest accumulation or the foundation’s operations, not for investment. This 200,000 THB is then transferred to another foundation if and when the foundation collapses. This implies that this is not a ‘deposit’ in the traditional sense.
Other Required Formalities to Form Foundations in Thailand
The official name of the foundation must be in Thai with no transliterations. One may retain foreign language names for other reasons.
The ‘Foundation’ must register a physical address, whether it be an office or another form of the host structure. Lease / rental agreement, copies of ownership documents, and owner’s identity proof are mandatory.
The ‘Foundation’ must have an official seal. It must be a stamp that can be a log or just text, and it can be in any language.
Forms & Registrations in Formation of Foundations in Thailand
To start the application, you’ll need to fill out a few forms.
The right venue to register a ‘Foundation’ is at the District Office along with Thailand’s Ministry of Culture. The District Office must be of the location where one plans to start the Foundation.
Considerations for Foreigners to Form Foundations in Thailand
It is still true that Thai applications to register ‘Foundations’ are simple and straightforward. On the other hand, applications with foreign shareholders are subject to ‘background checks to determine the foreigners’ legitimacy and capacity. These ‘background checks’ cause significant delays in foreign application processing. Furthermore, this results in lingering uncertainty and the possibility of a negative final result.
It is always a hefty task for a foreigner to start any new organization or community in a foreign land. Therefore, if you are not a Thai, but willing to form charities, non-profits, or foundations in Thailand, feel free to write us at [email protected]. Our team of law experts and specialized professionals along with decades of experience will surely guide you throughout the process. We will also assist you all through the process starting from application to the incorporation of your Foundation in Thailand.
