Closing a Company in Thailand: How to Shut Down and Retain Key Talent

1. Introduction: Why Companies Close Entities (But Keep Talent)

Businesses—especially those based in Singapore—often reduce or close operations in Thailand to optimize costs, restructure, or redirect strategic focus. During such transitions, you might believe shutting down your legal entity means losing all local talent. But your Thai employees hold vital knowledge, relationships, and regional expertise that continue to drive value.

By retaining your high-performing local team, you maintain operational continuity, preserve institutional knowledge, and remain well-positioned for future market reentry. This guide explores how to close a company in Thailand and retain employees without entity, utilizing an Employer of Record (EOR) Thailand solution—letting you hire in Thailand without entity and transfer employees after entity closure without disruption.

2. What Happens When You Close a Company in Thailand

A. Legal & Compliance Requirements

Thailand’s company closure process includes dissolution (legal termination) and liquidation (settling debts and assets). Here's a streamlined breakdown:

1. Board/shareholder resolution to dissolve 
2. File dissolution notification with the Department of Business Development (DBD)
3. Public announcement of intent to dissolve (newspaper notice, creditor notification) 
4. Liquidator appointment, often a director or external party
5. Asset appraisal, debt settlement (including final payroll, tax, and social contributions) 
6. File final returns with DBD, Revenue Department, and Social Security Office, then deregister
7. Final court or administrative approval ≅45–90 days for branch, and 3–6 months for full liquidation

B. Timeline & Steps

Delays often stem from unresolved liabilities, tax audits, creditor disputes, or BOI/FBL obligations

C. Obligations to Employees

Under Thailand’s Labour Protection Act (LPA) and Civil & Commercial Code, you must:

• Provide written notice at least one full pay cycle in advance—or equivalent payment in lieu
• Detach overtime, final wages, and accrued leave fully at termination
• Calculate severance per service duration:
  • 120–365 days: 30 days’ pay
  • 1–3 years: 90 days
  • 3–6 years: 180 days… up to 400 days for >20 years
• Pay severance within 7 days of termination
• Follow fair procedures—grievance, written warnings, proper notices—when terminating for misconduct

Non-compliance can lead to employee claims, government penalties, or delayed liquidation.

3. Risks of Talent Loss During Entity Closure

• Operational Disruption: Losing local skills interrupts client service and project delivery. 
• IP & Knowledge Drain: Departing employees take accumulated insights. 
• Client Fallout: Relationship shifts reduce customer trust. 
• Costly Re-entry: Rebuilding a team later is expensive and time-consuming. 

4. Retaining Employees Without a Legal Entity: Your Options

A. Freelancers or Contractors

• Pros: Quick to implement 
• Cons: High misclassification risk, no statutory protections, low retention 

B. Set Up a New Entity

• Pros: Full legal control 
• Cons: Takes inflexible 3–6+ months, expensive, admin-heavy 

C. Employer of Record (EOR) – Best Practice

An EOR Thailand provider like AYP becomes the legal employer. Your staff remain fully compliant, with contracts, benefits, and local protections—all without managing a Thai entity.

This lets you hire in Thailand without entity, retain employees without entity, and transfer employees after entity closure smoothly.

Learn more in AYP’s Employer of Record Thailand solution.

5. How EOR Helps You Retain Employees in Thailand

What an EOR Does

AYP acts as the legal employer in Thailand, handling:

• Employment contracts compliant with LPA
• Payroll, withholding, and social insurance
• Statutory entitlements and dismissals
• HR administration: onboarding, payroll support, queries

You maintain operational and performance control.

Transition Workflow

1. Planning: Identify key employees 
2. Issue termination with required notice or payout 
3. EOR onboarding: AYP rehiring staff under new contracts 
4. Ensure continuity: pay, benefits, and admin remain seamless 
5. Operational execution: you direct tasks; AYP handles employment 

This ensures workforce continuity, enabling you to retain employees without entity and hire in Thailand without entity, while legally closing your company.

Why Choose AYP

• Fast onboarding—usually within 1 business day 
• Compliance expertise with Thai labor law 
• Advisory from local HR experts

6. Case Study: Smooth Transition Post-Closure

Company: Singapore-based digital services firm

Thai Team: 10 key roles

Situation: Strategic shift led to Thai entity closure

Solution: Partnered with AYP EOR before termination

Outcome:

• 100% staff retention 
• Zero disruption to ongoing projects
• Fully compliant—notice, severance, filings
• Entity wound up in ~5 months

“AYP helped us close our Thai entity yet retain our team and client commitments smoothly. No hiccups, fully compliant.” — Regional HR Director

7. Key Considerations Before You Close an Entity

1. Timing: Initiate EOR onboarding before termination notices to avoid gaps. 
2. Legal Compliance:
   • Follow notice, severance, and advance pay regulations
   • Document misbehavior per LPA Article 119 prior to dismissals
3. Employee Communication:
   • Be transparent about the transition
   • Assure employment continuity and benefits
   • Coordinate onboarding rhythm with AYP
4. HR & Payroll Preparation:
   • Process final payroll and benefits before handover
   • Transfer payroll systems and clean records to EOR
   • Communicate timelines clearly to staff

8. Conclusion: Shut Down with Confidence, Keep Your Team Intact

Closing your Thai company doesn’t need to mean losing your team. By engaging an Employer of Record, you can:

• Cut entity upkeep costs
• Retain vital local talent
• Stay compliant with Thailand’s strict labor laws
• Position yourself for future operations

With AYP’s EOR Thailand solution, you can close a company in Thailand and simultaneously retain employees without entity, ensuring business continuity and readiness for growth.

9. Call to Action: Speak to AYP’s Local Experts

Thinking of shuttering your Thai operations—but don’t want to lose your team?

✅ Schedule a free EOR + entity closure consultation

✅  Get a complimentary cost simulation

✅ See how AYP can onboard your remaining team within days, not months

Retain Your Team Without a Local Entity →