How to Pay a Dividend?

A dividend can be declared and allocated to all shareholders proportionally from the amount paid of each share.

Keywords: Mazars, Thailand, Legal, AGM, EGM, Legal Reserve, BOI

 05 August 2013

Such declaration must be approved by the resolution of the Meeting of Shareholders (i.e. AGM/ EGM) and it can be paid only when the Company has earned profit. If the Company has incurred losses, the dividend cannot be declared unless such losses have been made good.

However, the Board of Directors may pass a resolution and declare an interim dividend from time to time if it appears to the directors that the Company has the profits to do so. However, the articles of association of the Company may specify that the dividend declaration must be passed at a shareholders’ meeting.

Please note that the Company must also appropriate a reserve fund (called “Legal Reserve”), at each distribution of dividend, being at least one-twentieth (5%) of the profit or more until such appropriation reaches one-tenth (10%) of the registered capital of the Company. In addition, payments of dividends are subject to withholding tax of 10% (except for a BOI Company or other tax exemptions).

For instance, the Company has registered capital of THB 5,000,000 and has profit from the year ended 2012 of THB 1,000,000. The dividend was declared by an AGM resolution. The allocation of dividend and the appropriation of the reserve fund will be computed as follows:




(Thai Baht)

The Company’s registered capital



Total reserve fund of the Company that must be appropriated

(10% of the registered capital of the Company)



Profit gained in the year ended 2012



Appropriate to a reserve fund for the year ended 2012

(5% of the profit or more)

At least 50,000


Dividend that can be allocated to all shareholders



Remaining reserve fund to be appropriated until reaches 10% of the registered capital of the Company