Branch office in Thailand is a 100% foreign-owned branch of a foreign company. Unlike representative office that may only engage in certain non-revenue-raising activities (non-trading activities), a branch office may in fact be involved in generating profit for the parent company (it is therefore called a trading entity).
The established branch office operates normally just as a regular limited company would only with one exception – there are no shareholders, directors etc. On the other hand, setting up this structure in Thailand is fairly time consuming and involves high establishment costs. A foreign company interested in opening it has to submit an application that is reviewed and approved by the committee on its merits. In order to be successful, the parent company needs to explain how opening a this structure in Thailand would benefit the country in terms of finances or development.
Foreign businesses seeking to establish their presence in form of a trading branch office have to meet the local requirements. The company must first verify that the business activities it would perform in Thailand fall within the scope of regulations and laws. Next, income and corporate income tax are considered and thoroughly discussed.
Besides following Thai laws and regulations, a foreign company is, moreover, obliged to bring in capital amounting to 5M THB, spread over a five-year period. Should the company meet all requirements and succeeds in opening a branch office, the branch is then allowed to operate in Thailand for a period of five years (unless specified otherwise). After this period is over, the extension of the Foreign Business License is possible provided the foreign company successfully brought in the required amount of capital.
Ashmin, Acclime business services coordinator
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