Foundation

A foundation established in Thailand is a legal entity whose main purpose is to support or engage in activities of public or private interest without any commercial or monetary gain. Governed by Sections 110-136 of the Civil and Commercial Code of Thailand, a foundation can legally enter into contracts, employ local staff and rent premises in Thailand. In general, these organizations work for the benefit of society, either for the good of all or to focus on improving the lives of a specific target group. Foundations collect contributions for their work and can issue receipts, just like a corporation.

Areas of activity of foundation may include education, faith, art, research, literature or other public benefit and non-profit purposes and have been registered under this code. A foundation’s land may be used only to carry out the particular purposes of the foundation and may not be used for the sole benefit of an individual or individuals. The application form for registration of a Thai foundation must be sent to the district registration office having jurisdiction over the place where the foundation’s headquarters will be established.

The following documents are also required with the application to foundation:

The application will be forwarded to the registry office, where the business address of the foundation is registered. In Thailand, the application will include the foundation’s articles of incorporation, the property or assets assigned to the foundation, the names, addresses and occupations of all potential directors/committees of the foundation, and the ownership/rental documents of the corporation’s principal address. Before being filed with the local registry office, the application must be reviewed to ensure that it is correct and complete. First, the application will be checked and reviewed for similarities to other existing foundations in progress. If the review is positive, it will be forwarded to the Department of the Interior for final approval. Once approved, the registration office will issue a certificate of registration, which will allow your foundation to begin operations in Thailand.

A foundation’s assets must be worth 500,000 baht, with liquid assets of at least 250,000 baht. Many charitable purposes require a foundation to have only 250,000 baht in tangible assets, with only 100,000 baht in cash. The district office must verify the validity of the application after receiving the above documents. The district office then forwards the application to the Ministry of Home Affairs. Unless the foundation has objectives applicable to another government department, the Ministry of Home Affairs must send the application for review to that agency. It may take up to one year for the applicant to be notified of the Department of the Interior’s decision.

Once registered, a foundation can enter into legal business contracts. This is an advantage for organizations looking to partner with local organizations to support their activities in Thailand. When you have a registered organization, it is easier to raise funds and donations for your foundation’s projects. Donors looking to fund a project find it easier to entrust their donations to a legally registered foundation and be accountable. Having a registered entity gives donors and supporters legal clarity.

A foundation must file tax returns with the Revenue Department and comply with the tax code to pay its taxes. A foundation must register for a tax identification number with a provincial Revenue Department office within 60 days of registration. When a payment is made to a party, the party must withhold taxes and record the foundation’s income and expenses. These reports must be submitted promptly to the tax office. The calculation and filing of the Foundation’s tax returns is based on the accounting process that would be the same as for a private limited company or limited partnership registered in Thailand. The Foundation’s tax rate is estimated at 10% or 2%, depending on the form of income generated.