Establish a foundation in Thailand is a structured legal process governed by the Civil and Commercial Code and the Ministerial Regulations on the Registration of Foundations (B.E. 2545 - 2002). Foundations are non-profit entities created for charitable, religious, educational, artistic, or social welfare purposes. Unlike businesses, they do not operate for profit and are strictly regulated by Thai authorities.
1. Legal Definition of a Foundation in Thailand
A foundation (มูลนิธิ - Munithi) is a legal entity created by endowed assets to support activities for the public benefit. These assets must be legally separated from the founders and governed by a board of directors.
Key legal characteristics include:
- Non-commercial purpose: The foundation cannot distribute profits to members.
- Asset requirements: A foundation must have a minimum registered capital to operate.
- Supervision by the Ministry of Interior: Oversight ensures compliance with legal and financial obligations.
2. Key Requirements for Registering a Foundation
2.1 Founding Members
- At least three founding members (can be Thai or foreign).
- Must submit identity documents and a clear mission statement.
2.2 Initial Capital and Assets
- The foundation must have an adequate initial fund (typically at least 500,000 THB or higher for international activities).
- The funds must be verifiable and legally sourced.
2.3 Objectives and Activities
- Must serve charitable, religious, scientific, cultural, or public welfare purposes.
- Cannot be politically motivated or profit-oriented.
2.4 Office Location and Address
- A registered physical office in Thailand is required.
- The foundation’s activities must align with local laws and government oversight.
3. Registration Process for a Foundation in Thailand
Step 1: Preparing Documentation
The following documents must be prepared:
- Application letter signed by the founders.
- Articles of Association outlining the foundation’s objectives.
- Details of the board of directors (at least three members).
- Financial statements proving adequate capital.
- Property ownership or lease agreement for office premises.
- Copies of ID cards or passports of the founding members.
Step 2: Submission to the Ministry of Interior
- The application must be submitted to the Department of Provincial Administration (DOPA) under the Ministry of Interior.
- The review process may take 6–12 months, depending on the complexity of the foundation's purpose.
Step 3: Government Review and Approval
- Authorities will assess whether the foundation serves a genuine public benefit.
- Additional information may be requested before final approval.
Step 4: Official Registration and Tax Exemptions
- Once approved, the foundation receives a Certificate of Registration.
- The foundation can then apply for tax-exempt status with the Revenue Department.
4. Financial and Operational Obligations
- Annual Financial Reports:
- Foundations must submit audited financial statements annually.
- Activity Transparency:
- The foundation’s operations must be non-profit and comply with approved objectives.
- Supervision by Authorities:
- The Ministry of Interior has the power to audit, dissolve, or revoke foundation status if laws are violated.
5. Foreign-Owned Foundations and Special Considerations
- Foreigners can establish and manage foundations, but they may face stricter regulations.
- International Non-Governmental Organizations (NGOs) operating in Thailand must obtain additional approvals from the Ministry of Foreign Affairs.
6. Restrictions and Legal Risks
- A foundation cannot engage in commercial business activities.
- Political or advocacy-based foundations require extra scrutiny.
- Misuse of funds or non-compliance can lead to dissolution or legal penalties.
Conclusion
Setting up a foundation in Thailand is a legally structured process requiring thorough documentation, government approval, and financial transparency. While it provides a platform for charitable and social causes, strict regulatory compliance is essential to maintain legal standing. Consulting legal professionals can help navigate the complexities of registration and ensure long-term sustainability.
