A non-profit organization (NPO) or a non-governmental organization in Thailand (NGO) is established with certain purposes like research in health, education, science or can have activities for the benefit of the society in the form of charities or foundations. NGOs in Thailand can be set up as companies or associations, where the profit or the donations will be reinvested for further activities or projects. People from abroad interested in opening a non-profit organization in Thailand can obtain suitable assistance and complete information from our Thai company formation specialists. You can also receive details about how to open a company in Thailand.
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Details about non-profit organizations in Thailand
Foundations or charities in Thailand are partially exempt from taxation, for example, if the revenue for the tax year exceeds the outflow, the owner will only pay a 2% (or 10% in some cases) tax rate on such profits. This is a special and notable tax rate that is considerably lower compared to those imposed on companies in the country. Individuals create NGOs in Thailand for varied reasons, like:
• research in health;
• economic development;
• donations;
• community development;
• charity;
• education;
• public interests.
In practice, some examples of the objectives of an NGO include the following:
- Promote and develop the quality of life;
- Promote integrated agriculture;
- Help farmers increase their income as well as provide them with solutions for introducing agricultural technology;
- Promoting sustainable natural resources management;
- Local environment and culture development.
The examples listed above are taken from NGOs that have been established and have worked over the years in the country, even if their activity has ceased. Please keep in mind that the objectives can also include different other categories and that the type of number of NGOs has varied over the years in Thailand.
International NGOs go through a comprehensive evaluation from the Ministry and, in practice, their assessment is made in collaboration with other Ministries (the members from the evaluation committee come not only from the Ministry of Interior but also from other Ministries). Some of the conditions that are worth mentioning are listed below:
- the association or foundation must be non-profit making and it must have no political affiliations;
- the stated objectives must be to assist the general population or, alternatively, to assist local NGOs or government agencies;
- the stated objectives must be acceptable in terms of the applicable government policies for national security or social development; these objectives cannot oppose any government policies.
NGOs in Thailand engage in many types of activities and the varied work that they do makes them subject to meeting several requirements and regulations in many different fields. Understandably, the conditions for operation are different for international NGOs compared to locally registered associations or foundations. As a general distinction, an international NGO will report to a local Thai organization or perform some of their activities in the name of a Thai counterpart company or agency.
Any foundation or NPO in Thailand needs to be registered with the Thai Ministry of Interior, as a legal entity with owners and regulations. If you are interested in opening a non-profit organization in Thailand, we invite you to ask for comprehensive guidance from our experts in company registration in Thailand. It is good to know that the company registration procedure in Thailand can be done within a few days, with help from our advisors.
The foreign private organization used as an NGO
International NGOs that wish to enter the Thai market have the option to register as a foreign private organization. This is a form of registration that does not allow the NGO to register as a local entity in the country. In practice, our Thai company formation agents recommend that entrepreneurs avoid this type of registration as there will be limitations on the manner in which the NGO will be able to operate or obtain the work permits/visas for their foreign volunteers when needed.
If the foreign NGO does decide to register as a foreign private organization, then an approval from a special committee will be required. This approval will only be issued for the specific activities of the NGO in the country and not for allowing the foreign private organization to also bring the needed volunteers to work in the country. The visa applications will include a separate process during which our agents can help you.
The Thailand foundation used as an NGO
Foreign non-governmental organizations have a second option when entering the Thai market: they can register as a local foundation. By doing so they will be able to better integrate into the Thai market. When operating as a non-profit Thai entity, the NGO will be registered with the Ministry of Interior and will list an objective that serves the public interest such as education, charity, religion, arts, and others.
An important condition is that the Thai foundation will have at least three board members, either Thai or foreign, and a minimum capital. Having a Thai national on the board of the foundation has practical if not legal advantages. The NGO will generally benefit from having a board member who is a native language speaker and who will be able to handle some of the procedures.
As a foundation in Thailand will choose a name that will also incorporate the word “foundation” and it will use it in all official communications and on all documents, as required by law.
As far as the management of the foundation is concerned, its committee is the one that will have the power to amend the regulations, as and if needed. Any amendments can only be made if they are useful for allowing the foundation to meet its objectives. Foundation directors who harm the activities of the foundation or exhibit the wrongful performance of their duties can be dismissed from their position by court.
During the course of its existence, the foundation can be subject to an inspection from the Registrar. It has the power to supervise, control and inspect its activities and make sure that they are performed in accordance with the stated objectives and by observing the national Thai laws. A Registrar inspector has the power to enter the premises of the foundation during its work hours and inspect the business and to request that the acting foundation officers or directors provide him with needed documents for inspection.
A foundation in Thailand can be dissolved when: it was incorporated for a pre-defined period, as expressed in its constitutive documents, its objective becomes impossible, it becomes bankrupt or a Thai court orders its dissolution.
How to register an NGO in Thailand
Individuals interested in opening a non-governmental organization in Thailand must submit the documents to the local Thai registrar and need to consider the rules and regulations stipulated in the Operation and Registration of the Foundation B.E. 2545. We remind that the following documents need to be prepared when registering an NGO in Thailand:
• details about the owners and board of executives;
• information about the purposes of the foundation;
• the rental agreement or ownership title of the location of the NGO;
• copies of the identification cards of the foundation members;
• information about the address of the institute;
• if assets are registered, a copy of the documents must be provided.
As previously stated, the application for the registration of a foundation in Thailand can be refused on grounds concerning the fact that its objectives may be contrary to national security or public order. In this case, the Registrar will communicate its refusal and the applicant has the chance to appeal in writing against this decision. This can be done within 30 days of receiving the refusal. The Minister of Interior is expected to issue a decision within another 30 days and this decision is the final one on the approval or the rejection of the foundation.
Even if it’s a non-profit organization in Thailand, one should know that a deposit of a minimum of THB 200,000 needs to be registered in a bank account. Additional information about how to set up a non-governmental organization in Thailand can be obtained from our Thai company formation specialists.
Although the country does not have firm legislation in place for the NGOs, the manners of registration described above are sufficient to serve the purposes of foreign entrepreneurs willing to open this type of establishment in the country.
Options for foreign NGOs in Thailand
Investors in Thailand can choose to open a company that will engage in activities that are often common for NGOs, such as education or community development or health research, among others. One reason why this can be a suitable option is the fact that foreign investment in certain fields is promoted and, depending on the chosen business sector, foreign investors will have a satisfactory level of control. For example, for the private limited company, the founders or promoters can be Thai or foreign. However, for the public limited company, at least 15 promoters are required and more than half of them must reside in Thailand (although no nationality restrictions apply).
When setting up a company to invest and promote activities related to education, charity, or health purposes, investors will need to observe the regular company formation steps. These include a number of formalities for the chosen legal entity, most importantly, registering the business with the Department of Business Development and the Revenue Department for various tax purposes (value-added tax). In addition to these registrations, companies that are subject to corporate income tax (as will be the case when setting up a corporation and not a foundation for the purposes of the NGO), will also need to obtain a tax identification number from the Revenue Department, a mandatory step that needs to take place within 60 days from registration.
Charitable corporations abroad can set up a branch in Thailand, an office that will be treated as an office under Thai law and that will be considered a permanent establishment of a foreign entity in Thailand. A foreign company engaged in charity or other activities will be fully liable for the debts and liabilities of its Thai branch and it can be sued should the branch enter into a legal dispute. When choosing this manner of establishment, at least one representative is appointed and domiciled in Thailand and he will oversee the activities of the branch. A particularity of this form, one that can be suitable for companies that engage in NGO activities, is that the branch is involved in the same activities as its foreign counterpart and nothing more. If the foreign company has educational purposes or ones related to community development and aid, so will its Thai branch.
Business regulations are in place both in the case of the branch (concerning the minimum capital brought or remitted into the country) and for the two other types of companies, the private and the public one.
Foreign NGOs can establish an office or open a corporation in Thailand, however, they can also offer financial assistance in the country via other routes. It is possible to offer support when no office is established, however, in this case, the domestic company that will offer the needed assistance to the NGO will need to provide details of the said activities to the Department of Employment as well as to other Thai authorities. Part of the information that is disclosed when a foreign NGO without a local office works via a Thai company includes the activities and objectives of the NGO that will provide services, details of the project for which the NGO will provide assistance as well as a certificate of a foreign private organization that is issued by the embassy or consulate of the country in which the NGO is based.
When a foreign NGO wishes to organize a seminar, conference, or a similar event in Thailand, working with a locally registered company is also required and the application submitted by that company with the Thai authorities will include information about the objective of the event, its topic, the names of the speakers as well as the schedule. The foreign NGO does not necessarily need to organize the event, it can only restrict itself to supplying financial support and in this case, the Thai company that receives support from the NGO will be the one to handle the formalities as well as make the applications on behalf of the NGO within a prescribed period before the date of the event.
When foreign NGOs are permitted to work with local Thai companies, the permissions granted by the authorities may be limited in time. The license will also include specific conditions for operating in the country, which must be observed by the NGO. The entity can also be asked to submit reports on the results of their work in the country.
Invest in Thailand
Bangkok is a modern and vibrant city with multiple cultural influences when non-profit organizations can benefit not only from having access to a large number of individuals but also the city’s efficient infrastructure and connectivity.
Some Thai statistics, as per the data released by the National Statistical Office, include the following:
– according to the 2010 Census, there were 65,926,261 people living in Thailand;
– the overall unemployment rate in 2017 was 1.1%, with 1.2% for men and 1.0% for women;
– the average monthly income in 2015 was 26,915 Baht per household and the average monthly expenditure per household was 21,157 Baht.
Opening a non-government organization (NGO) in Thailand is a process that takes into consideration the special regulations for these types of entities as well as the fact that they need to have clear objectives and, in most cases, work with or be set up in the presence of a Thai national. For some interested entrepreneurs or organizations, setting up an NGO in Thailand can also be accomplished not necessarily in the form of a foundation or an association, but in that of a Thai company that is chartered to make charitable donations to an existing Thai foundation, with the Thai entity established in this manner effectively serving the purpose of a fund-raising consultancy company.
Our team can help you explore the available options of opening an NGO in Thailand is a necessary step. Legal counsel is advisable for these types of establishments as the government regulations can be complex, depending on the field in which the NGO activates and the types of financial support or activities it offers.
You can contact us if you want to know more about how to open a company in Thailand and the specific rights and conditions applicable to foreign investors.