Question 1

What is the difference between a foundation and an association?

Accepted Answer

Both foundations and associations 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 • Foundation = "Assets" allocated for the public benefit, focusing on using assets (funds) for purposes stated in the objectives • Association = "Group of People" who come together to carry out activities on an ongoing basis, focusing on the collective power of members 2. Structure • Foundations have a board of directors (minimum 3 persons) and no members • Associations have a board of directors and members who apply to join. Members have the right to vote at general meetings. 3. Initial Endowment Fund • Foundations must have cash of no less than 500,000 Baht (or 200,000 Baht for certain types as specified by the Ministry of Interior) • Associations have no fixed minimum capital requirement, but must have sufficient funds to carry out activities 4. Objectives • Foundations must operate solely for public charity, religion, arts, science, literature, education, or other public benefit purposes • Associations can be established for a wider range of objectives, such as professional associations, sports associations, business associations, alumni associations, etc., not limited to charitable purposes 5. Taxation • Both are subject to corporate income tax in the same manner if they have not received public charitable organization status (2% on donations, 10% on other income) • Both can apply for public charitable organization status to be fully exempt from income tax Which should you choose? • Choose a "Foundation" if you want to allocate assets specifically for charitable work, do not need a membership system, and want a credible image for receiving donations • Choose an "Association" if you want to bring together people with shared interests, need a membership system where members participate in governance, and your objectives are not limited to charity alone (e.g., professional associations, trade associations)

Question 2

How much initial endowment fund is required to establish a foundation?

Accepted Answer

According to the Ministry of Interior's criteria, the initial endowment fund has 2 tiers. 1. Standard Foundation • Cash only not less than 500,000 Baht • Cash + other assets cash not less than 250,000 Baht, and when combined with other assets, the total value must be no less than 500,000 Baht 2. Foundation for Social Welfare / Education / Sports / Religion / Disaster Relief / Drug and AIDS Patient Assistance, or Foundation Established by a Government Agency • Minimum endowment fund of 200,000 Baht Note: The initial assets must be supported by evidence such as a bank passbook, bank deposit certificate, or property ownership documents.

Question 3

How many board members are required for a foundation? And what are the qualifications?

Accepted Answer

Under the Civil and Commercial Code, Section 111, the foundation's board of directors must have at least 3 members. However, the recommended number is 5 members to ensure all positions within the management structure are filled and there are sufficient votes for passing resolutions. Recommended Positions: • Chairperson • Vice Chairperson • Secretary • Treasurer • Director (Public Relations or other roles) Qualifications: • Must be of legal age (20 years or older) • Must not be a bankrupt person • Must not have been convicted by a final judgment of imprisonment, except for offenses committed by negligence or petty offenses The Registrar will also consider whether each board member has the appropriate status and conduct for carrying out the foundation's objectives.

Question 4

How long does the process take?

Accepted Answer

Establishing a foundation takes significantly longer than registering a company or a limited partnership, as the documents must pass through multiple levels of government agencies. Estimated Timeline: • Document preparation, bylaws drafting, and signing approximately 1-2 weeks (after receiving all information) • Government processing approximately 90 days, with the following steps: Bangkok — Submit at the Administration Division of the District Office, then forwarded to the Central Department of Provincial Administration (Wang Chaiya), then forwarded to the Foundation Registrar for approval in queue Other Provinces — Submit at the District Office, then forwarded to the Administration Division at the Provincial Hall, then forwarded to the Foundation Registrar for approval in queue • Royal Gazette publication the Registrar will arrange this after approval Cases that may take longer than usual: • Objectives involving other agencies the Department of Provincial Administration must forward the matter for comments from the relevant agencies. If that agency requires amendments, the matter is sent back to the Department, which then notifies us to make corrections. This back-and-forth between government agencies can extend the timeline beyond 90 days. • Leased premises as the registered office additional lease agreements and supporting documents must be prepared • Officials' processing queues during certain periods when officials are occupied or the document queue is long, approval may be delayed In total, the average timeframe is approximately 3-6 months (some cases may take longer). Our team will continuously coordinate and track the status with officials throughout the process, to ensure the fastest possible completion.

Question 5

Does a foundation have to pay taxes?

Accepted Answer

A foundation has the legal status of a juristic person and therefore has tax obligations as follows. 1. Standard Foundation (not yet declared a public charitable organization) Must pay corporate income tax on gross income (before deducting expenses), categorized by income type: • Income from donations taxed at 2% • Income from activities, interest, rent, or other sources taxed at 10% 2. Foundation Declared as a Public Charitable Organization (as announced by the Ministry of Finance) • Fully exempt from income tax regardless of income source • Donors can claim their donations as tax deductions (individuals may deduct up to 10% of net income; juristic persons may deduct up to 2% of net profit) Tax Forms to File: • Annual: File Form PND.55 (ภ.ง.ด.55), the 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): - Form PND.1 (ภ.ง.ด.1): Withholding tax on employee salaries (if there are employees) - Form PND.3 (ภ.ง.ด.3): Withholding tax on payments to individuals (e.g., contract work, service fees) - Form PND.53 (ภ.ง.ด.53): Withholding tax on payments to juristic persons Must be submitted within 7 days from the end of the month in which payment was made. In summary, every foundation must file Form PND.55 (ภ.ง.ด.55) annually. The monthly forms (PND.1/3/53) are filed only in months where payments were made and withholding tax was deducted.

Question 6

What obligations does a foundation have after establishment?

Accepted Answer

After the foundation is successfully established, it has ongoing legal obligations that must be fulfilled regularly. Annual Obligations: 1. Prepare Accounts and Annual Balance Sheet • Maintain income and expense records throughout the year • Prepare the annual balance sheet certified by a Certified Public Accountant (CPA) 2. Hold an Annual General Meeting • The foundation's board of directors must hold at least 1 meeting per year as specified in the bylaws • Key agenda items include approving the annual balance sheet and income/expense accounts, reporting on operations, appointing the auditor for the following year, and other matters as required by the bylaws 3. File Tax Form PND.55 (ภ.ง.ด.55) with the Revenue Department • File 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 carried out that year 4. Submit the Annual Report to the Registrar (District Office / Provincial Hall) The following documents must be submitted to the Foundation Registrar: • Minutes of the Annual General Meeting • Balance sheet and income/expense accounts for the previous accounting period • Foundation activity report form specifying the number of meetings held, expenditures, and details of activities conducted In addition, the Registrar/inspection officer will prepare an Inspection and Supervision Report on Foundation Operations (Form 1), covering the inspection of the registered office, objectives and activities/projects, income and expenses, assets, board of directors, balance sheet preparation, PND.55 filing, and public charitable organization status (if applicable). Monthly Obligations (if applicable): • File withholding tax forms (PND.1/3/53) only in months where payments were made Additional Recommended Actions (not mandatory, but advised): • Obtain a fundraising license if the foundation wishes to receive donations from the public, it is advisable to obtain a license from the Department of Provincial Administration for legal compliance and credibility • Apply for public charitable organization status to receive full income tax exemption and allow donors to claim tax deductions (see the FAQ on "What is a public charitable organization?" for details) Note: Failure to comply with the above obligations may result in the Registrar ordering the foundation to take corrective action. In serious cases, the Registrar may order the dissolution of the foundation under Section 131 of the Civil and Commercial Code.

Question 7

What is a public charitable organization? And how can a foundation apply for this status?

Accepted Answer

A public charitable organization is a foundation or association that has been declared by the Minister of Finance as a public charitable organization under the Revenue Code. Benefits: • The foundation is fully exempt from corporate income tax regardless of the type of income • Individual donors can deduct donations up to 10% of their net income • Corporate donors can deduct donations as expenses up to 2% of their net profit • Goods donated are exempt from value-added tax (VAT) Key Qualifications and Conditions: • The foundation must be a registered legal entity in full compliance with the law • Its objectives must be for public charity within Thailand only • It must have been in operation for at least 1 year with tangible activity results • At least 60% of total income must be spent on public charitable purposes • Charitable expenditure must account for no less than 65% of total expenditure • The foundation's name must not be a trade name, and its objectives must not benefit any specific individual • It must have a balance sheet and income/expense accounts certified by a Certified Public Accountant (CPA) Application Process: 1. Prepare documents: foundation bylaws, balance sheet for at least 1 accounting period, operations report, evidence of charitable activities 2. Submit a written application to the Revenue Department 3. The Revenue Department reviews the documents, evidence, and historical operations 4. The Revenue Department submits the matter to the Ministry of Finance for consideration 5. The Minister of Finance issues an announcement designating the organization as a public charitable organization Obligations After Receiving the Status: • Must issue official receipts to every donor, specifying the Ministry of Finance announcement serial number • Must continue to operate in accordance with the stated objectives • The Revenue Department will periodically review operations; if they do not meet the criteria, the status may be revoked Note: The foundation must have been in operation for at least 1 year and have a balance sheet for at least 1 accounting period before applying. In practice, the more tangible and verifiable charitable activities the foundation has conducted, the higher the chances of approval.

Question 8

Where is a foundation registered? And what types of premises can be used?

Accepted Answer

Foundation registration is not done at the Department of Business Development (DBD) like companies or limited partnerships. Instead, it is registered with the Foundation Registrar. • In Bangkok submit at the District Office where the foundation's office is located • In other provinces submit at the District Administrative Office where the foundation's office is located Premises that can be used as the foundation's registered office • Residential houses (most common, typically the home of a foundation board member) • Shophouses, commercial buildings • Offices, office buildings Premises that often cause issues • Condominiums: In most cases, officers will not accept foundation registration at a condominium address. Important limitation One house registration can only be used for one foundation. Regardless of the building type.

Question 9

Can foreigners or juristic persons establish a foundation?

Accepted Answer

Yes, both are possible. Thai law does not restrict foundation establishment to Thai nationals only. 1. Foreigners Foreigners can be founders or board members of a foundation. Additional documents required include: • Copy of valid passport • Copy of Work Permit or valid visa (if applicable) • Proof of address in Thailand • Some documents may need to be certified by an embassy or consulate Note: In practice, the Registrar will assess whether each board member has suitable qualifications on a case-by-case basis. It is recommended to have Thai nationals on the board as well for easier coordination with government agencies. 2. Juristic Persons (Companies/Partnerships) A juristic person can serve as the "asset allocator" for a foundation (e.g., a company donates money or assets to establish a foundation). However, the foundation's board members must be natural persons only. A juristic person cannot serve as a board member. Example: ABC Company Limited wishes to establish the "ABC Foundation for Education." The company can allocate 500,000 Baht as the initial endowment fund, but the foundation's board members must be natural persons, such as the company's managing director or executives.

Question 10

What are the naming requirements for a foundation?

Accepted Answer

The foundation name has the following key requirements. General Requirements: • The name must always include the word "Foundation" ("มูลนิธิ") (e.g., "Thai Education Foundation" / "มูลนิธิเพื่อการศึกษาไทย") • The name must not duplicate the name of any already-registered foundation • The name must not be vulgar, contrary to public order, or contrary to good morals • If you wish to use the name of the King, Queen, or members of the Royal Family, Royal Permission must be obtained first Using the Names of Other Persons or Organizations: If you wish to use the name of a person, surname, government agency, or another juristic person as part of the foundation's name, you must obtain written consent from the name owner or the relevant organization and attach it to the registration application. Otherwise, the Registrar will not accept the registration. Example: If you wish to name the foundation "Mr. Somchai Jaidee Foundation for Education," you must provide a consent letter from Mr. Somchai Jaidee (or his heirs, if deceased).

Establish a Foundation Legally. Bylaws Drafting and Registration All in One Place

What You Get from Our Service

Foundation Legal Consultation

Foundation Bylaws Drafting

Complete Document Preparation

Registration Filing and Follow-Up

Exclusive Benefits When You Choose Our Service

What You Need to Prepare

Documents to Prepare

Information to Prepare

Foundation Establishment Process

Consultation and Information Gathering

Preparing Government Forms and Drafting Bylaws

Filing the Application with the Registrar

Follow-Up and Receiving the Registration Certificate

Frequently Asked Questions

Related Services

Company accounts

Audit

Annual accounts