The good standing of a Thai business

Certificate of Good Standing for a Thai company

Good standing describes the status of any entity as in compliance with certain standards. In the usual business life, a company is in good standing, if it is in-line with its legal, tax, financial, and reporting obligations. Contractual violations and defaults as well as fraud and other criminal activities are usually not included in this definition. However, the term must be formulated and defined individually for each specific case and intended use. 

Seven categories in Thailand: Concerning the good standing of a Thai company, these seven aspects should be considered: (i) proper registration at the company register as an operating business with no current action to strike the company off the register, (ii) compliance with the registration requirements, including confirming the directors and the registered address, (iii) compliance with the corporation requirements for the company formation as well as operations, (iv) proper accounting and audit, filed within the legal deadlines, (v) compliance tax filings and payment requirements, (vi) availability of the required business licenses and permissions, not suspended or disbarred, and finally (vii) compliance with Thailand’s foreigner legislation regarding the Foreign Business Act, Land Code and work permit requirements, if applicable. 

Enhanced good standing adds to the corporate level the shareholders, directors, officers, and other stakeholders. These background checks cover, as examples, the question of whether PEPs (politically exposed persons) are involved, or stakeholders being subject to any form of sanction, suspension, or disciplinary censure. It might deal also with the sources of the financing, the ultimate beneficial owners, environmental policies and compliance, and other aspects following the predefined specifications.

The consequences of the lack of good standing are manifold. If a company fails to maintain good standing, this fact might be noted accordingly in the public register. The business might be suspended or put in an inactive status, or even fully struck off from the public register. The process to restore a Thai Co., Ltd. is described in “The forgotten land: Successful reclamation of delisted Thai property holding companies“. Besides, private parties might require the proof of good standing for a finance decision, for a company acquisition, a bank account opening, or in other cases. The third category covers the civil and criminal aspects of such incompliance in case of intention, serious negligence, or even without any fault test.

Certificates, credit reports, and clearance papers to witness good standing

The certificate of good standing confirms this status in a formalized way or, as the case may be, by expert opinion. The COGS can witness uninterrupted good standing if the company has been in continuous, unbroken existence since its incorporation or it can confirm only its existence on a certain reference date. The latter case would implicit The latter case would imply that non-compliance could be rectified and cured afterward. And original documents may be translated into the English language and/or be issued with an apostille or similar Thai or foreign certification. Thailand is not a member of the Hague Apostille Convention.

Thailand’s Police Clearance Certificate of Good Conduct deals with the individual’s crimes to confirm the integrity of the person, to witness by the certificate of innocence that he/she is free from charges, suspicions, and convictions, taking into account Thailand’s statute of limitations. The police clearance certificate (“PCC”) can be acquired in a formalized procedure.  It has its area of application, above others, for Thai and foreign passport matters.

The Tax Clearance Certificate is issued by Thailand’s Revenue Department to confirm that the foreigner is tax compliant and of good standing. This involves the settlement of corresponding taxes or by providing a guarantor or securities as a guarantee for potential tax liabilities. A Tax Clearance Certificate is required in certain cases as an exit paper to allow crossing the border and departing Thailand. 

Professional services from Bangkok to maintain and proof good standing of the Thai company 

PUGNATORIUS Ltd. advises on a broad scope of corporate and investment tasks in Thailand. The Bangkok-based law firm has particular experience and know-how to keep the business entity in good standing and compliance with Thailand’s legal, tax, accounting, and financial compliance regulations. 

Credit reports: Apart from acquiring governmental certifications, the law firm prepares expert opinions and credit reports on the company level, as well as concerning its shareholders, directors, and officers.  Such a custom-made report covers incorporation details, share capital, shareholders information, directors, allowed business activities, premises, and location, financial information as available, as well as an independent risk assessment. 

Clearance Certificate: The law firm assists and supports regarding Thailand’s Police Clearance Certificate of Good Conduct, the Thailand Tax Clearance Certificate, and similar government certifications. 


Disclaimer: A little knowledge is a dangerous thing. This low-resolution high-level outlook constitutes neither legal advice nor an attorney-client relationship. 

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