Conducting a foreign business in Thailand is a thrilling experience. There are new markets, opportunities, and an entirely new business culture to be familiar with. However, once the thrill dies down, many foreign investors soon learn another thing: Thailand also has its own set of financial regulations, and complying is not always easy.

Whether you are starting a tech startup or a boutique hotel, an early understanding of your financial obligations can save you much stress down the line. Here is how to ensure your company is in compliance since day one.

Know what you need to file monthly

In Thailand, filings are done monthly, as opposed to quarterly or annually. You’re required to submit:

·      VAT returns (PP30) in case your company is VAT registered.

·      Withholding tax (PND 1, 3, 53) based on who you pay.

·      Employee Social Security contributions.

Failure to meet deadlines, even accidentally, can result in sanctions.

Keep all the supporting documents

In Thailand, receipts, tax invoices, and paperwork are crucial for examining company expenses. Even justifiable costs may be denied in the absence of supporting documentation.

This means keeping:

·      Tax invoices from suppliers

·      VAT-compliant receipts

·      Proof of payments

·      Service contracts and agreements.

You just need to ensure that your accounting department can confirm everything when the time to file comes.

Learn how withholding tax works

Withholding tax is another thing that surprises the foreign business owners since it does not apply in most other countries. When you are paying for some services, you must withhold some percentage and submit it as tax on behalf of the service vendor.

Typical cases involve payment of:

·      Freelancers

·      Service providers

·  Rental expenses.

You leave this out, and you not only have to pay the tax. You might have to pay penalties, too. It is one of those rules that seem strange at first, but you get used to them afterward.

Prepare your annual audit of financial statements

Thailand has legal requirements for all companies, local or foreign, to go through an annual financial audit. The auditor examines the compliance of your accounting with the Thai Financial Reporting Standards and your filings with your books.

To facilitate this, it is better to maintain regular and consistent records of accounting during the year rather than attempting to rectify matters right before the deadline. Most foreign companies turn to Thai accounting specialists like Vbapartners.com to make sure their annual audit goes smoothly and their financial statements follow local standards.

Do not neglect corporate governance requirements

Foreign-owned companies usually have other obligations, including the maintenance of the board minutes, updating the shareholder records, and capital requirement management. These tasks may seem like administrative work. However, they are necessary to comply with the Thai government’s regulations.

The takeaway

Being financially compliant in Thailand is easy when you know the rules. Most foreign-owned companies ultimately prefer to use local accounting services. This eliminates doubt and enables them to operate their business instead of dealing with tax obligations. In a state where rules change frequently, having an accounting expert by your side is important.