There is nothing easier than registering a company in Thailand. A company without employees, work permits, VAT registration, or other complexities can be set up within a single day. It can then be used as intended — to hold real estate, obtain business licenses, or even start operations (provided no staff or office is required).
But what should you do if the company turns into a “suitcase without a handle” — difficult to carry, but a pity to throw away? Simply abandoning it is not an option, as the company must at least file annual reports with the authorities. Otherwise, penalties will apply.
Let’s look at the available options for a company that is no longer relevant.
1. Selling the Business
From the seller’s perspective, this is the most optimal solution. It allows you not only to avoid liquidation costs but also to recover your investment — and ideally, to profit from selling a successful business.
This requires preparation from multiple angles. First, marketing efforts to attract potential buyers. Second, proper documentation confirming the company’s financial position: tax reports, accounting records, payroll statements, etc.
2. Selling a Dormant Company
This typically applies to companies that once held real estate or were registered but never became operational.
You can approach several legal firms, including the one that originally registered the company.
However, most buyers prefer registering a new company rather than purchasing an existing “clean” one. The reason is simple — no one wants to risk unknown liabilities, review accounting records, or deal with potential contractual obligations. Additionally, the registered capital and business activities may not match the buyer’s needs.
That said, there is still a chance to find a buyer who urgently needs a company with specific characteristics — in which case only changes to directors and shareholders would be required.
Keep in mind that legal fees for transferring ownership are usually comparable to registering a new company. Therefore, the seller typically only recovers government fees unless they find a buyer independently.
3. Company Liquidation
The first question is whether to formally close the company or simply abandon it. “Abandoning” means failing to hold annual shareholder meetings and submit financial statements.
The government strictly enforces compliance. Penalties may reach up to 20,000 THB for the company and 50,000 THB for the director for each violation.
Currently, voluntary settlement of violations may cost approximately 2,000 THB to the Revenue Department and 12,000 THB to the police per year of non-compliance.
Even if the company has never been operational, liquidation still requires time and proper procedure.
Shareholders may decide to liquidate the company in the following cases:
- As provided in the Articles of Association
- Upon expiration of a fixed company term
- Upon achieving the company’s objectives
- In case of bankruptcy
- By shareholder resolution
In practice, the most common scenario is voluntary liquidation by shareholder resolution.
Key Steps in Liquidation:
- Shareholders’ Meeting
- Notice published in a local newspaper at least 7 days prior
- Written notice sent to shareholders at least 14 days prior
- At least 75% approval required
- Minimum quorum: 25%
- Registration of Resolution
- Must be filed with the Department of Business Development within 14 days
- Appointment of Liquidators
- Responsible for settling debts and distributing remaining assets
- Must:
- Publish notices to creditors twice in a local newspaper
- Notify known creditors by mail
- Prepare financial statements
- Notifications
- Social Security Office (if applicable)
- Revenue Department, including final financial statements
- Final Registration
- Completion of liquidation with the Department of Business Development
- Submission of all corporate and accounting records
If the company is no longer needed, it is generally advisable to complete the liquidation process properly. While penalties for non-compliance may currently be inconsistently enforced, there is a clear trend toward stricter regulation.
For any questions related to business closure in Thailand, you may contact Investeast Consulting. We will help you find the most suitable solution.
Author: Alexandra Agapitova.
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