Accounting for Foreign-Owned Companies in Thailand

Map the transactions before choosing the package

The first discussion should identify the systems, people and evidence behind each flow. Agree which records the business supplies, how often they are delivered and which exceptions require management approval. A clear transaction map is more useful than a package based only on the number of bank entries.

On smaller screens, scroll the table sideways to see all columns.

Sales, collections and revenue cut-off

Set up a chart-of-accounts mapping that supports local statements and the parent’s reporting requirements. Keep adjustments made only for group reporting separate from entries in the Thai statutory ledger. Agree reporting currency, cut-off, materiality and intercompany reconciliation dates. A management instruction from headquarters should not override a local filing requirement without reviewing the legal and accounting consequences.

For Thai VAT, registration, tax invoices and return obligations must be reviewed separately from the management report. The Revenue Department VAT guidance and tax-invoice provisions provide the official starting points. Use the dedicated VAT guide for the wider filing workflow.

Costs, balances and operating controls

Document the commercial reason for management fees, software charges, royalties, financing and other intercompany items. Retain contracts, allocation methods and evidence of the underlying benefit or activity. Cross-border payments may raise withholding, VAT, treaty or transfer-pricing questions; the answer depends on the parties and transaction. Avoid applying a single “foreign payment” rule to every invoice. Reconcile disputed or unmatched balances before the group closes its period.

Payroll, responsibilities and approvals

Define who in Thailand approves accounting entries, payroll inputs, bank payments and tax submissions, and who at headquarters receives reports. Maintain an access register for banking and government systems. Foreign directors and employees should coordinate their roles with the relevant immigration and work-permit route. A shareholder or director title does not by itself resolve whether an individual may work in Thailand.

Connect this work with payroll administration and, where relevant, work-permit preparation. Payroll processing does not replace management approval or employment-law review.

A monthly close that management can use

Use a close timetable that identifies local document deadlines, reconciliation owners, management review and group reporting dates. Reconcile banks, receivables, payables, payroll and intercompany accounts before preparing the group pack. Keep the local tax working papers linked to the ledger. For BOI-promoted activity, coordinate the project records, conditions and reporting with the promotion certificate rather than treating promotion as a blanket exemption.

The final handover should include the agreed financial statements, key reconciliations, an outstanding-items list and the status of relevant submissions and payments. Keep evidence of both filing and payment. Explain any estimates or unresolved records so the owner understands what can safely be concluded from the figures.

Reports and indicators worth discussing

On smaller screens, scroll the table sideways to see all columns.

Define the calculation and comparison period before judging performance. Management reporting and cash-flow planning can be included in the agreed scope; it should not be assumed to come with every bookkeeping quotation.

An illustrative workflow

Illustrative scenario: headquarters records a management-fee receivable in a different month from the Thai subsidiary’s payable. The two ledgers then disagree even though the bank transfer later matches. A reconciliation identifies the invoice, service period, currency, tax assessment and reporting adjustment before settlement. This illustrates a working-paper process, not a claimed client saving.

Documents for an initial review

• Company affidavit, shareholding structure and operating permissions
• Parent reporting instructions and the group chart of accounts
• Intercompany contracts, funding records and balance confirmations
• Local payroll, tax registrations and government-filing history
• BOI certificate and project records where relevant

Provide one representative month and identify known gaps rather than sending an unstructured archive first. If the business is changing providers, use the accountant handover guide. If several periods are incomplete, start with catch-up bookkeeping so historical work and ongoing monthly work can be priced separately.

Agree the scope, outputs and fee

A quotation should specify the entities and locations covered, source systems, transaction complexity, payroll population, reporting frequency, tax-return responsibilities and annual work. It should also state who collects missing evidence, what is excluded, how additional work is approved and who controls payments. Do not infer an audit, a licence review or unlimited historical corrections from the phrase “full accounting”.

Use the accounting package comparison to prepare the discussion. The document checklists and working-paper templates help organise the information before the engagement begins.

Illustrative engagement example

Explore the fictional company setup through first payroll example for a proposed work plan, document requests, deliverables and review criteria. This teaching scenario is not a record of a completed client mission.

Frequently asked questions