Registering a regional
office in Thailand.
Regional offices in Thailand date back to 1992, when the then Prime Minister’s office sought promoting Thailand as the Southeast Asia’s commercial centre. Creation of such offices would enable trans-national corporations and companies to establish their presence in the Thai Kingdom, which would, in turn, strengthen the country’s position.
A regional office is able to co-ordinate and supervise the company’s branches and its affiliated companies in the region on behalf of the foreign head office. As such, it may provide respective branches/affiliated companies with the following services:
- Advisory and management
- Financial management
- Training and personnel development
- Marketing control and sales promotion plans
- Product development
- Research and development
Benefits of having a regional office.
One of the main benefits of establishing a regional office in Thailand is the fact it is not obliged to be registered or incorporated as a juristic person and thus does not have to submit any financial statements to the government (the Department of Commercial Registration). Furthermore, the department will provide support to companies transferring their foreign staff to Thailand and also help with securing necessary visas and work permits.
Requirements and conditions.
While regional offices enjoy a number of benefits in the Kingdom, there are also some limitations they must respect. Regional offices must not:
- Derive any income from its activities. Should the company make any profit, it must be borne by the head office.
- Have the power to accept a purchase order or make a sales offer
- Negotiate or enter into business arrangements with any natural or juristic person within the Kingdom
A foreign company can apply for a permit to establish a regional office at the Alien Business Section of the Department of Commercial Registration at the Ministry of Commerce. The permit is valid for five years and is subject to the registration fee of 5 THB per every 1,000 THB of registered capital (maximum of 5,000 THB).
After a successful application, a newly established regional office may be subject to the following conditions:
- The total debt financing of the business cannot exceed seven times the portion of the capital owned by shareholders or the owner of the business
- Money used to finance the regional office must come from abroad. Over the five years of the permit’s validity, the business must bring in at least 5,000,000 THB, 2,000,000 THB of which must be remitted in the first year (half of which must be once again remitted in the first six months). After the first year, the company must bring in at least 1,000,000 THB each year until the full amount has been transferred.
- At least one person who is responsible for operating the regional office must reside in the Kingdom