Question 1

What is the difference between an association and a foundation?

Accepted Answer

Both associations and foundations are legal entities that are not established for profit distribution and are registered with the Registrar (Department of Provincial Administration / District Office) in the same manner. However, there are several key differences. 1. Core Purpose of Establishment • Association = "Group of People" who come together to carry out activities on an ongoing basis, focusing on the collective power of members • Foundation = "Assets" allocated for the public benefit, focusing on using assets (funds) for purposes stated in the objectives 2. Structure and Number of Persons • Associations must have at least 7 board members + at least 10 general members = totaling no fewer than 17 persons. Members have the right to vote at general meetings. • Foundations must have at least 3 board members (5 recommended) and have no membership system 3. Initial Endowment Fund • Associations have no minimum fund requirement and do not need to provide a bank deposit certificate. Primary income comes from membership registration fees and annual dues. • Foundations must have cash of no less than 500,000 Baht (or 200,000 Baht for certain types of foundations) and must provide a bank deposit certificate. 4. Objectives • Associations can be established for a wide range of objectives, such as professional associations, sports associations, alumni associations, religious associations. They are not limited to charitable purposes. • Foundations must operate solely for public charity, religion, arts, science, literature, education, or other public benefit purposes. 5. Post-Registration Obligations • Associations must maintain accounting records, prepare annual financial statements, file the Por.Ngor.Dor.55 (ภ.ง.ด.55) tax return, and hold an annual general meeting. • Foundations have the same obligations as associations, plus they must submit an annual report to the Registrar (District Office / Provincial Hall) and may be subject to periodic inspections by officials. Which should you choose? • Choose an "Association" if you want to unite people with shared interests, need a membership system where members participate in governance, your objectives are not limited to charity alone, and you do not want to prepare a large initial endowment fund. • Choose a "Foundation" if you want to allocate assets specifically for charitable work, do not need a membership system, want a credible image for receiving donations, and have sufficient initial funds to meet the requirements.

Question 2

How many board members and general members are required?

Accepted Answer

Under the Civil and Commercial Code, establishing an association requires no fewer than 17 persons in total, divided as follows. Board of Directors: at least 7 persons Recommended positions include • President • Vice President (1-2 persons) • Registrar • Public Relations Officer • Social Director • Treasurer • Secretary • Other board positions (if any) 3 Founding Promoters The registration application must name 3 founding promoters, who are typically the President, Vice President, and Secretary. General Members: at least 10 persons General members are persons who apply to join the association. They have the right to attend general meetings and vote. Board Member Qualifications • Must be of legal age (at least 20 years old) • Must not be bankrupt • Must not have been sentenced to imprisonment by a final court judgment, except for offenses committed by negligence or petty offenses The Registrar will also consider whether each board member has the status and conduct appropriate for carrying out the association's objectives.

Question 3

How long does the process take?

Accepted Answer

Establishing an association takes approximately the same amount of time as establishing a foundation, since the documents must pass through multiple government agencies in a similar manner. Approximate Timeline • Document preparation, bylaws drafting, and signing approximately 1-2 weeks (after all information is received) • Government processing approximately 90 days, with the following steps Bangkok — file at the Administrative Division of the District Office → forwarded to the Central Department of Provincial Administration (Wang Chaiya) → forwarded to the Association Registrar for approval in queue Other provinces — file at the District Administrative Office → forwarded to the Administrative Division of the Provincial Hall → forwarded to the Association Registrar for approval in queue • Royal Gazette announcement the Registrar will arrange this after approval Cases That May Take Longer Than Usual • Objectives involving other government agencies the Department of Provincial Administration must send the matter to the relevant agency for comments first. If that agency requires amendments, the matter is sent back to the Department of Provincial Administration, which then notifies our team to make corrections. This back-and-forth between government agencies may extend the timeline beyond 90 days. • Leased premises used as the association's office a lease agreement and additional supporting documents must be prepared. • Officials' document queue during busy periods when officials have a large backlog, approval may be delayed. Overall, the entire process takes approximately 3-6 months on average (some cases may take longer). Our team will continuously coordinate and track the status with officials until everything is completed.

Question 4

Does an association have to pay taxes?

Accepted Answer

An association has the status of a legal entity under the law, and therefore has tax obligations similar to a foundation. 1. General Association (not yet declared a public charitable organization) Must pay corporate income tax on income before deduction of expenses, categorized by income type • Income from membership dues / donations taxed at 2% • Income from activities, interest, rent, or other sources taxed at 10% 2. Association Declared a Public Charitable Organization (per Ministry of Finance announcement) • Fully exempt from income tax regardless of income source Tax Returns That Must Be Filed • Annually file the Por.Ngor.Dor.55 (ภ.ง.ด.55) (income tax return for foundations and associations) within 150 days from the end of the accounting period. Must be filed every year even if there is no income. • Monthly (only for months with payments) - Por.Ngor.Dor.1 (ภ.ง.ด.1) withholding tax on employee salaries (if there are employees) - Por.Ngor.Dor.3 (ภ.ง.ด.3) withholding tax on payments to individuals - Por.Ngor.Dor.53 (ภ.ง.ด.53) withholding tax on payments to legal entities Must be submitted within 7 days from the end of the month in which payment was made. In summary, every association must file the Por.Ngor.Dor.55 (ภ.ง.ด.55) annually. Monthly returns (Por.Ngor.Dor.1/3/53) are filed only for months in which payments were made and withholding tax was deducted.

Question 5

What are the obligations after the association is established?

Accepted Answer

After the association is fully established, it has ongoing legal obligations that must be fulfilled consistently. Annual Obligations 1. Maintain Accounting Records and Prepare Annual Financial Statements • Maintain income and expense records throughout the year • Prepare annual financial statements certified by a Certified Public Accountant (CPA) 2. Hold an Annual General Meeting • Must hold an annual general meeting as specified in the bylaws • Key agenda items include approving the annual financial statements and income/expense accounts, reporting on operational results, appointing the auditor for the following year, electing a new board (when the term expires), and other matters as specified in the bylaws 3. File the Por.Ngor.Dor.55 (ภ.ง.ด.55) Tax Return with the Revenue Department • Must be filed within 150 days from the end of the accounting period • Must be filed every year even if there is no income or no activities were conducted during that year Monthly Obligations (if applicable) • File withholding tax returns (Por.Ngor.Dor.1/3/53) only for months in which payments were made Additional Recommended Actions (not mandatory) • Apply for public charitable organization status to be fully exempt from income tax, and to allow donors to claim tax deductions Note: If the association fails to carry out activities according to its objectives, or acts in violation of the law or public morals, the Registrar may order the dissolution of the association under Section 102 of the Civil and Commercial Code.

Question 6

Is an initial endowment fund required for an association?

Accepted Answer

This is a significant advantage of associations compared to foundations. Associations have no minimum initial fund requirement and do not need to provide a bank deposit certificate during the registration process. The primary sources of income for an association typically include • Membership registration fees (initial fees) • Annual membership dues • Donations • Income from activities and events The registration fee and annual dues are specified in the association's bylaws, and clients can set the amounts as they see fit. Our team will help draft appropriate amounts based on the nature of the association. Example: An association may set the membership registration fee at 500 Baht and annual dues at 300 Baht. The actual amounts depend on the objectives and scale of each individual association.

Question 7

Where is an association registered? And what types of premises can be used?

Accepted Answer

General associations are not registered at the Department of Business Development (DBD) like companies or partnerships. Instead, they are registered with the Association Registrar under the Department of Provincial Administration. • In Bangkok file at the District Office where the association's office is located • In other provinces file at the District Administrative Office where the association's office is located Premises that can be used as the association's registered office • Residential houses (most common, typically the home of the association president or a board member) • Shophouses, commercial buildings • Offices, office buildings Premises that often cause issues • Condominiums: In most cases, officers will not accept association registration at a condominium address. Important limitation One house registration can only be used for one association. Regardless of the building type. (This is separate from foundations — a single house registration can have both one foundation and one association.)

Question 8

Can foreigners serve as board members or members of an association?

Accepted Answer

Yes. Thai law does not restrict association members or board members to Thai nationals only. Foreigners can serve as both members and board members of an association, with the following additional documents required • Copy of a valid passport • Copy of a work permit or valid visa (if any) • Proof of address in Thailand • Some documents may need to be certified by an embassy or consulate In practice, it is recommended to have Thai nationals on the board as well, to facilitate coordination with government agencies.

Question 9

What are the rules for naming an association?

Accepted Answer

The key rules for naming an association are as follows. General Requirements • The name must always include the word "Association" ("สมาคม" in Thai), e.g., "Thai Accountants Association" • The name must not be the same as any already registered association, or so similar as to cause confusion • The name must not be vulgar, contrary to public order, or offensive to public morals • If the name of the King, Queen, or members of the Royal Family is to be used, Royal permission must be obtained first Using the Names of Persons or Other Organizations If you wish to use a person's name, surname, government agency name, or other legal entity's name as part of the association's name, you must obtain a written consent letter from the owner of the name or the organization and attach it to the registration application. Example: If you want to name your association "ABC University Alumni Association", you must obtain a consent letter from ABC University. Note: Using a name that requires consent may extend the registration timeline, as you must wait for the consent documents before filing.

Question 10

What is the difference between a general association and a trade association?

Accepted Answer

Both are legal entities that are not established for profit distribution, but they have important differences. General Association • Governed by the Civil and Commercial Code, Sections 78-109 • Registered with the Association Registrar, Department of Provincial Administration (District Office / District Administrative Office) • Objectives can be diverse, such as professional associations, sports associations, alumni associations, social welfare associations, religious associations • Members are general individuals with shared interests; they do not need to be business operators • 3 founding promoters, minimum 7 board members, minimum 10 general members (17 persons total) Trade Association • Governed by the Trade Association Act B.E. 2509 (1966) • Registered with the Department of Business Development (DBD), Ministry of Commerce or Provincial Commercial Office • Objectives focus specifically on trade and business, to promote the shared commercial interests of members in the same or related industries • Members must be business operators in the same or related fields. General individuals who are not business operators cannot apply for membership. • At least 3 founding promoters, who must be business operators of good conduct • Must submit the membership register to the Registrar within 90 days of registration Which should you choose? • Choose a "General Association" if your objectives are not specifically focused on trade, such as professional associations, alumni associations, sports associations, social associations, or if your members are not all business operators. • Choose a "Trade Association" if you want to unite business operators in the same industry to promote shared commercial interests, and all members are business operators.

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