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Corporate compliance is an essential part of Thailand’s business as well as legal environment. This ensures that’s companies have to ensure compliance with statutory obligations as well as the accounting standard. There is the annual monitoring of corporates as well as anti corruption activities and financial reporting on an annual bases. Lets take an overview of corporate compliance in Thailand.
This section examines four major pillars of corporate compliance in Thailand:
Annual filings – These annual filling including but not limited to shareholder meeting requirements as well as financial statements.
Auditing and accounting – Note that these are the standards under Thai law and obligations under the Accounting Act.
Corporate Social Responsibility (CSR) – emerging legal and societal expectations.
Anti-Corruption Laws – including obligations under the Organic Act on Counter Corruption.
You will note that with Accounting Act B.E. 2543 (2000) and the Civil and Commercial Code (CCC), in place. Thai companies are required to prepare accurate and timely financial statements for each accounting year.
Key requirements include:
Preparation: Note that financial statements must be prepared at the end of every financial year. This is in accordance with Thai Financial Reporting Standards (TFRS). Note that these are aligned closely with International Financial Reporting Standards (IFRS).
Approval: The directors of the company must present the financial statements to shareholders. This is done at the at the Annual General Meeting (AGM) within four months of the fiscal year-end.
Filing: Now after the shareholder approval is given. Then the financial statements must be filed with the Department of Business Development (DBD) of the Ministry of Commerce within one month of the AGM.
Language: Financial statements must be prepared in Thai, although bilingual formats are common in Thailand. Failure to file timely financial statements may result in fines imposed on both the company and responsible directors.
Within the Civil and Commercial Code, it mandates that companies convene at least one Annual General Meeting (AGM) every year.
Private limited companies: Private companies must hold an AGM within four months before the end the fiscal year-end. The directors and auditor needs to approve the financial statements.
Public limited companies: Must comply with the Public Limited Company Act B.E. 2535 (1992), This law is much more stringent with its requirements regarding its quorum and more than a private regarding notice, quorum, and procedures.
Notice of the AGM must be sent to all shareholders and published in a local newspaper or electronic portal (depending on the Articles of Association). This is part of corporate compliance.
In addition to financial statements:
Companies must file their annual list of shareholders with the DBD, reflecting the shareholder register as of the AGM date.Changes in directors which is covered on this website. Likewise the auditors, registered capital, or Articles of Association must be reported promptly to the DBD.
There are however certain companies. Those particularly those with foreign ownership which may have reporting duties under the Foreign Business Act (FBA) and sector-specific regulations.
Failure to comply with filing annually. Failure to comply with obligations can result in:
Fines will be leveled against the company for not reporting (this is typically in the range of THB 50,000–200,000).
Personal liability for directors, these will include fines and, in some severe cases, imprisonment.
Note that there may also be administrative consequences. These include difficulty in renewing work permits for the foreign directors or obtaining licenses. Annual filings therefore form the cornerstone of corporate compliance, linking financial transparency with shareholder governance.
The Accounting Act B.E. 2543 (2000) requires that all juristic persons (companies) operating in Thailand maintain their accounts in a proper manner.
Standards: Note that in Thailand all companies must comply with Thai Financial Reporting Standards (TFRS). This which is harmonized with IFRS. Small and medium enterprises (SMEs) may apply the simplified TFRS for Non-Publicly Accountable Entities (TFRS for NPAEs).
Books and Records: You must maintain accurate accounting books, including general ledgers, cash receipts, and disbursements, at their registered office in Thailand. You have to keep the records for five years (or seven years if subject to certain tax investigations).
Language: You have to keep the records in Thai or in English with the Thai translation. This is part of corporate compliance.
The Civil and Commercial Code requires that companies appoint an independent auditor at each AGM meetings to examine the financial statements.
Qualifications: The auditors appointed must be licensed under the Accounting Professions Act B.E. 2547 (2004).
Duties: The auditor’s primary role is to express his or her opinion on whether the financial statements present are a true and fair view of the company’s financial position. This is part of corporate compliance.
Independence: The auditors of the company must be independent. They will need to be independent from management and shareholders to avoid conflicts of interest.
You will note that audited financial statements must be filed with the following:
DBD – You have one month to complete this with shareholder approval.
Revenue Department – This is as part of the annual tax return the company has to complete.
Public limited companies or companies which are listed on the Stock Exchange of Thailand (SET). These companies are subject to an additional filing under the Securities and Exchange Act B.E. 2535 (1992).
If there are no appointed auditors or no filing of statements then there is a fine.
Directors of the company may be held personally liable. Right for inaccurate or misleading financial statements.
Reputation damage to the business may impair banking relationships and investor confidence.
You will note that Thai regulators have emphasized the following:
Electronic filing: This is done of annual accounts to streamline compliance.
Audit committee requirements: This is required by public companies and certain BOI promoted companies.
3.1 Emerging Importance in Thailand
Corporate Social Responsibility (CSR) has become a growing compliance for companies operating in Thailand. Even thought the CSR is not comprehensively codified in Thai law (there are now laws for it). There are certain statutes and regulatory expectations embed CSR principles into corporate practice already. This is part of corporate compliance.
3.2 Legal Foundations
CSR-related obligations in Thailand arise from several sources:
Public Limited Company Act – Listed companies in Thailand must disclose CSR activities in their annual reports.
Securities and Exchange Commission (SEC) – Mandates disclosure of environmental, social, and governance (ESG) activities.
Environmental Protection Laws – Companies in energy, mining, as well as manufacturing face stricter CSR-linked obligations under environmental regulations.
Labour Protection Act B.E. 2541 (1998) – There are embeds of the CSR principles by protecting employee welfare, health, and safety.
Corporate Social Responsibility in Thailand typically include:
Environmental initiatives: Likewise these include but not limited to energy efficiency and waste reduction. Some even include reforestation projects.
Community engagement: These can include educational programs as part of the corporate responsibility. The employing of local employment as well as the usual charitable contributions.
Employee welfare programs: These include corporate training as well as healthcare and fair wages.
The Stock Exchange of Thailand (SET). In the past they have promoted the concept of “Sustainable Development Reporting”. This now requires listed companies to include CSR and ESG initiatives in annual sustainability reports.
In Thailand the CSR initiative are mainly voluntary for private companies. With the larger businesses such as listed companies. They face mandatory reporting. However, the direction of CSR policies suggests a slow shift towards much stronger CSR obligations across all the sectors.
Benefits: The benefits are an enhanced corporate reputation. Likewise having much, better stakeholder relations. This also reflects on improved risk management, and access to ESG-focused capital.
Risks of Non-Compliance: The risk is reputational harm and investor withdrawal. This is part of corporate compliance.
Thailand has worked on its anti-corruption framework. This has been an issue as far back as the 90’s with the drafting of the Organic Act on Counter Corruption B.E. 2542 (1999), as amended, enforced by the National Anti-Corruption Commission (NACC).
The law criminalize bribery of public officials. Likewise impose disclosure obligations as well as extend liability to private sector actors, including corporations.
Bribery of Public Officials
As you are well aware that it is a criminal offence to offer, give, or to promise money or benefits to public officials. This to influence the performance of their duties. Note that both individuals and companies can be prosecuted.
Corporate Liability
Take not on the corporate responsibility for corruption. There have been amendments introduced to stop corruption done by employees, agents, or intermediaries for the benefit of the company. This is to allow companies to avoid liability if they demonstrate they had adequate internal controls and compliance programs.
Asset Disclosure
Much like all companies today globally, senior government officials must declare assets and liabilities, increasing transparency.
Individuals: For an individual who commits corruption. There is imprisonment (up to 5 years for bribery, or more for aggravated cases) and fines.
Corporations: These usually have substantial fines. Sometimes the fine is linked to the value or the bribe.
Anti-Money Laundering Act B.E. 2542 (1999) – This Act strengthens financial oversight linked to corruption in Thailand.
Public Procurement Laws – This allows for the regulating of bidding and contracts with government agencies to reduce corruption risks.
Securities and Exchange Commission Regulations – These regulations require listed companies to adopt anti-corruption policies and disclose compliance measures.
For companies in Thailand there has been a push to ensure that companies employ anti corruption programs. These may include:
This gave rise to the Private Sector Collective Action Coalition Against Corruption(CAC),This was started in Thailand and certifies companies that commit to anti-corruption programs. This will be in line with international best practices.
The NACC has intensified enforcement on anti corruption practices. This is very much in certain sectors. There sectors include the construction, energy, healthcare, as well as when it comes to government procurement. Companies in Thailand have noted that anti-corruption compliance is not only a legal obligation but also a prerequisite for maintaining investor confidence.
