Funding a Thai Company From Overseas: Capital, Loans and Bank Records

Name the transaction before sending money

Specify the obligation the payment will satisfy. “Working capital” describes how cash may be spent, while “share payment” and “loan drawdown” describe why the company receives it. A shareholder loan is not paid-up share capital. The same shareholder can supply both, but each amount needs its own basis and accounting treatment.

For a capital increase, the Department of Business Development (DBD) capital-increase manual describes a special shareholder resolution, new shares, amendment of the capital clause in the memorandum and registration. It also lists company-issued evidence of receiving the share payment. Its rules for offering new shares must be addressed before a proposed outside investor sends money. A payment reference cannot replace that corporate process.

For a loan, write down the principal currency, permitted drawdowns, interest or expressly agreed interest-free terms, repayment dates, allocation of bank charges and signing authority. These are transaction-planning fields, not a universal bank form. Have the relevant corporate and tax advisers review the terms before execution; an interest-free label alone does not establish the correct tax treatment.

This funding exercise assumes the Thai recipient is an established company with an account suitable for the transfer. If the entity is still being formed, complete the relevant company registration steps in Thailand and establish the proper recipient and share-payment arrangements for that stage. Do not insert a director’s personal account simply to get around an unfinished corporate process.

Build the file around the actual payer and recipient

Record the legal name and identifying details of the overseas funder, the account holder sending the money, the Thai company and the account receiving it. Add the shareholder or lender relationship. For a corporate funder, identify the entity that signs the documents and the person authorised to instruct its payment. Similar group-company names are not sufficient identification.

Where the sender differs from the documented shareholder or lender, explain the difference before remitting. A group treasury company, a founder’s spouse or a payment intermediary may appear on a bank record without being the party named in the agreement. Ask the receiving bank and the company’s advisers what evidence will make that payment chain acceptable. Do not silently credit the sender with shares or invent a loan from an entity that never agreed to lend.

Prepare a short instruction sheet containing the funding reference, payer and beneficiary names, currency, amount, intended purpose, relevant agreement or share-payment reference, and who bears charges. Send the same factual description to the company officer, accountant and person instructing the transfer. Consistent payment references make later explanations easier; they do not cure an incorrect underlying arrangement.

Ask the receiving bank which beneficiary details, purpose wording and supporting records apply to this account and transaction, and what transaction evidence it can issue. BOT’s documentation and reporting provisions require customers to provide foreign-exchange transaction details and describe banks issuing evidence after transactions. The supporting-document treatment includes conditions and a Know Your Business exception; there is no basis for assuming that every customer receives the same request.

Keep the distinction between shareholder funding evidence requested by DBD and banks clear. Registration evidence, the company’s own share records and the bank’s review answer different questions. The comparison below uses them together to check a payment, without treating any one document as proof of everything.

Reconcile legal purpose, bank evidence and the ledger

Use one reconciliation sheet per transfer, with a separate line for each obligation it settles. The following is a suggested internal control, not a statutory form or a bank approval checklist. Fill it from original documents, identify each unresolved item, and give one person responsibility for closing it.

Collect the sending confirmation and the receiving bank’s credit advice or equivalent transaction evidence, together with the relevant statement entry. A sending receipt may show a payment instruction rather than completed delivery. If the destination record does not show the overseas payer or origin clearly, ask for additional bank evidence before relying on it for a later review.

Preserve the foreign-currency amount separately from the amount credited in baht, where conversion occurred. Record the bank’s actual conversion information and separately identified fees. Do not estimate an exchange rate to force the numbers to agree. If funds remain in foreign currency, the accountant must apply the appropriate accounting and tax treatment rather than substituting a fictional baht bank credit.

For shares, the Civil and Commercial Code published by DBD distinguishes registered particulars from the shareholder register, which includes payment particulars under section 1138. A company affidavit or registered capital figure is therefore not a substitute for tracing an individual payment. The bank balance and paid-up capital measure different things. Cash can subsequently be spent, while the record of a supported share payment remains part of the corporate history.

For a loan, maintain the agreed principal currency , drawdowns, repayments and outstanding balance by lender. Keep interest separate from principal. Save the reconciliation with the receipt or posting reference, its preparation date and the name of the person who checked it. This provides an audit trail for future financial reporting and repayment planning.

One transfer, two obligations: allocate before posting

Consider a hypothetical planning example in which an existing overseas shareholder owes THB 300,000 on a valid share-payment instruction and separately agrees to lend THB 200,000. The example assumes both obligations are valid, denominated in baht, and supported by the necessary documents. It is not a recommended capital level or a quotation.

If one transfer produces a confirmed THB 500,000 credit, the company needs an allocation supported by those documents: THB 300,000 against the share obligation and THB 200,000 against the loan. The bank entry alone does not explain that split. Preserve a written allocation acknowledged by the relevant parties, and link both company records to the same transfer reference.

Now suppose the account receives THB 499,000. The THB 1,000 difference is an unresolved reconciliation item until the bank evidence and charge allocation explain it. If it is a documented charge borne by the company, the accountant evaluates that treatment separately. If it represents a short payment borne by the funder, identify which obligation remains unpaid and arrange the appropriate correction. Do not automatically certify the whole share obligation as paid.

Separate remittances may make evidence clearer when capital and loan funding have different approval dates or conditions. If one payment is used, agree the allocation and confirm that the receiving bank can handle the stated purpose before sending. Splitting transfers merely to avoid documentation requests is not a sound recordkeeping method.

Repair mismatches at their source

The bank description or recipient information is wrong

Retain the original instruction and contact the bank through the account’s established channel. Ask whether a correction, explanatory record, trace or return is appropriate for the actual error. Keep its response and any replacement evidence with the original. Do not edit a bank PDF or treat your own explanatory letter as a bank-issued correction.

The company posted a loan as capital

Give the accountant the agreement and payment trail, and ask the responsible officer to check receipts, shareholder records and any filings that relied on the entry. A ledger adjustment does not itself amend a company filing or turn debt into shares. Preserve the correcting entry and its reason; assess separately whether corporate records or filings need amendment.

Repayment terms were never properly established

Reconstruct the actual agreement and chronology with the funder, rather than backdating documents. Identify disputed principal, interest and charges separately. Under Revenue Code section 70 , specified income paid from Thailand to a foreign company not carrying on business in Thailand can require withholding by the payer. Before paying interest to that lender, establish the recipient’s status and applicable treatment.

The Revenue Department’s interest treaty-rate table distinguishes countries and recipient categories. Do not assume the overseas parent qualifies for a particular treaty result, or that calling a payment “repayment” settles its tax character. Assign the accountant to check withholding, treaty evidence and filing obligations for the proposed payment. A personal lender requires a separate assessment from the foreign-company case above.

Close the funding file when the allocation is supported

Treat funding as reconciled when the company can explain the payer, legal purpose, actual amount received and amount assigned to each obligation, and its bank and company records support that explanation. Keep any balance still unpaid or awaiting allocation visible. The person approving closure should be able to follow the transfer without relying on the founder’s memory.

If the amount arrived but its purpose remains disputed, record the receipt and its unresolved status with the accountant; do not leave the money out of the books or force a capital classification. If the bank trail is incomplete, pursue the missing evidence before a later capital certification or repayment makes the discrepancy harder to unwind. The next action belongs to the owner of the faulty record.