Representative office.

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Representative office in Thailand

Setting up a representative
office in Thailand.

Establishing a 100% foreign owned company can be a lengthy process in Thailand, with the Foreign Business Act applying strict requirements to meet the approval for a Foreign Business License. Establishing a representative office in Thailand, on the other hand, is effortless and is usually considered by foreign companies wanting to conduct market research and assist in finding new partners or opportunities in the market, before setting up a permanent entity in Thailand. A foreign company is permitted to establish a representative office according to the Civil and Commercial code in Thailand without seeking a Foreign Business License. Being an extension or subsidiary of the head office, this structure is only allowed to undertake certain activities as explained below. Generally, however, there are fewer conditions to meet for a representative office than other categories of foreign entities in Thailand. The primary distinguishing factor between this structure and a limited company, is the representative office cannot invoice within Thailand. Accordingly, there will no income tax to be paid by the representative office, which makes tax reporting and accounting obligations simpler.

Rights.

  • Sourcing of goods and services in Thailand for the head office
  • Checking and controlling the quality and quantity of goods or services purchased or commissioned in Thailand by the head office
  • Marketing and disseminating information concerning new goods and services of the head office
  • Report of business activities in Thailand for the head office

Obligations.

  • Must only engage in non-revenue generating activities
  • No authority to accept purchases, place orders, or to make offers for sale directly within Thailand
  • All expenditures incurred by the representative office must be borne by the head office

  • It is not subject to corporate income tax, in accordance with the Revenue code except interest on deposit of remitted funds

The representative office can readily hire local staff under contracts, lease office premises, open a local bank account to pay for expenses and receive remittance from the head office. It must have a “principle manager” appointed to manage the day-to-day operations of the office in Thailand. The manager must be appointed by the head office directly and can be a foreign or Thai national. Appointing a foreign national for this position will require the individual to be resident in Thailand and meet the requirements to legally work in Thailand.

Important points to note when establishing a this structure:

  • Must only engage in non-revenue generating activities

  • All required application forms will be in Thai language issued by the Ministry of commerce. The application must be signed by the appointed representative manager. If a foreign manager is appointed, the application must be signed in person in Thailand.
  • The registration and representative license will be completed and issued within 15-20 working days once completed documents are submitted

Closing of representative office.

The closing process for a representative office in Thailand is a simpler process than a company. Once the structure has fulfilled its purpose, the closing can be completed tentatively within 60 days. As a representative office is considered to be the same legal entity as its head office, it will not be required to follow the normal closure process for a company.

Ready to get started?

We specialise in registering business structures for foreign companies to establish a presence in Thailand.

Not sure where to begin?

Get a free 30-minute consultation on starting and operating your company in Thailand.

Ashmin, Acclime business services coordinator

Questions? Speak to our experts.

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