It is a great challenge for a foreigner to open and operate a business in Thailand. It is difficult to get the business up and running. The arcane bureaucratic rules in Thailand makes the process to create the company, establish utilities, and hiring workers demanding. This requires the completion of forms in a foreign language and hiring Thai employees to may not be able to communicate in English. The differences in culture can generate conflicts and disagreements between the employer and employees. Sometimes all of these issues will create problems in maintaining the business. This may end in the business having to close down. The process is lengthy and needs to be done properly to minimize the risks of future lawsuits on the business owner or managers. So what needs to be done.
First, file for dissolution with Department of Business Development (DBD) and begin the process of legally shutting down the company. If the company is solvent, the company must liquidate its assets. If the company is insolvent, the shareholders can put additional capital into the company or the liquidator must start bankruptcy proceedings. The company’s debts needs to be legally cleared before it is closed.
Then the Company must file its tax return and pay all taxes due. Employees should be paid their salary and any severance that is due to them .A bankruptcy will not discharge a tax debt or employee salaries. If there are any foreign employees, the work permits need to be returned to the Ministry of labor within seven days of employment.
Suppliers and customers need to be legally notified of the termination of business operations. Arrangements should be made to terminate any existing contracts for services. Banks and financial accounts should be closed down and settled. The landlord of the business should be sent notice of the end of business operations and the lease should be properly terminated. If the taxes and debts are paid, any surplus is paid out to the shareholders.
It is necessary to ensure the business is properly closed down. Outstanding debts or legal issues can lead to lawsuits against the directors, managers, and owners of the business. It would be prudent to contact a licensed Thai business attorney to ensure that the business closed down. The business that is properly shutdown will reduce the potential of continued liability after the business is closed.
See also Company Liquidation: Closing a Thai Limited Company.