Dividend Contributions in Thailand

Dividend Contributions for a Company Limited in Thailand

Dividend distribution is a formal process governed by Thai law. For a Company Limited (Co., Ltd.), dividends can only be paid out of net profits after deducting retained losses and statutory reserves.

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Dividend contributions for a Company Limited in Thailand are subject to specific legal and tax requirements.

If you’re unsure how to calculate dividends, allocate reserves, or file the correct forms, professional guidance is essential.

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1

Legal Reserve Requirement

By law, at least 5% of annual net profit must be set aside as a legal reserve until it reaches 10% of the company’s registered capital. Dividends cannot be distributed unless this reserve condition is met.

2

Declaration Process

There are two types of dividends:

  • Annual dividends – Approved by shareholders at the Annual General Meeting (AGM).

  • Interim dividends – Approved by the Board of Directors during the year.

All dividends must be paid within one month from the date of resolution.

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Dividend Contributions in Thailand
3

Withholding Tax on Dividends

Dividends are subject to 10% withholding tax for Thai shareholders. For foreign shareholders, tax rates may vary depending on Double Tax Agreements (DTA). The company must issue withholding tax certificates and file PND 2 and related forms with the Revenue Department.

4

Compliance Notes

  • Ensure accurate profit calculation and reserve allocation.
  • File board/shareholder resolutions with the Department of Business Development (DBD).
  • Record all dividend payments in the financial statements and maintain clear shareholder records.
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