Representative Office in Thailand

Setting Up a Representative Office in Thailand

Representative Office in Thailand. Representative offices manage service businesses on behalf of a head office or affiliated company in different countries. They can only conduct certain activities and should not exceed those parameters as it will violate the license to operate.

Setting up a Representative Office in Thailand can be difficult for foreign companies and it is important to understand the legal requirements before making a decision.

Requirements for a Representative Office

A Representative Office is an establishment set up by a foreign company to perform non-revenue-generating activities, for example, carrying out research and marketing purposes in Thailand. It cannot accept purchase orders, make offers for selling, or negotiate business with a juristic person established in Thailand. Since the Representative Office doesn’t generate any income, its head office must bear any expenditures that it incurs. The Representative Office isn’t subject to corporate income tax with the exception of deposit interest on remitted funds from the head office, according to the regulations stipulated by the Revenue Code.

Setting up a Representative Office in Thailand is much simpler than establishing a branch or subsidiary company, but it still involves significant amounts of paperwork and time. Let a law firm in Thailand take care of your Representative Office registration so that you can concentrate on your business. They will help you submit all the required documents to the Foreign Business Administration Office and follow up on any post-registration duties, such as submitting taxes.

Requirements for a Manager

The foreign company that establishes the Representative Office must appoint a local manager who will be responsible for the day-to-day operations of the Representative Office. This person must be a Thai national or have the permission to work in Thailand from the head office. The manager of the Representative Office must file a letter of appointment along with other documents to the Ministry of Commerce. These include a declaration that the applicant, directors, managers, or appointed representatives satisfy the qualifications and do not possess prohibited characteristics under Section 16 of the Foreign Business Act.

A Representative Office is a popular choice for foreign companies exploring the Thai market or seeking to liaise with their current partners in the country. However, unlike a limited company, the Rep Office cannot generate income and its employees are subject to personal tax. This makes it a good option for businesses with limited resources and who are unsure of their future plans in the country.

Minimum Investment Requirements

Before a foreign company can open up a Representative Office in Thailand the mother company must transfer a minimum of 5 Million baht. The Department of Business Development will issue a certificate or registration number to the liaison office once all of the necessary documentation has been submitted.

A Representative Office is a type of business entity that manages service businesses on behalf of the head office or an affiliated company in different countries. A Representative Office is limited in its scope of activity and cannot accept purchase orders or offer sales, conduct business negotiations, or generate profits on its own.

Instead, it must report information back to its head office or affiliated company. This includes a detailed study of the local market economy, related investments, marketing, manufacturing, distribution, and demand for products in Thailand. It must also provide reports on any issues that may affect its parent company. It is important to note that a Representative Office does not require approval from the Ministry of Foreign Affairs like a Branch Office does.

Activities Permitted by a Representative Office

A Representative Office is a non-revenue-generating foreign business entity. Its activities are limited to conducting non-expenditure-related activities on behalf of its head office and providing important support for the company’s business in Thailand. It cannot accept purchase orders; offer sales or negotiate on business dealing with any persons or juristic entities in Thailand; and it is not permitted to earn income on its own.

As such, it does not pay any corporate taxes in Thailand, as the income tax is incurred by its head office abroad. The Rep Office must also remit its remittances to its head office according to a stipulated schedule, and it should register the remittances received to demonstrate its compliance with the law.

Typically, the Department of Business Development (DBD) issues a certificate/registration number within two to four weeks after receiving the complete set of required documentation. The Rep Office can begin operations once this is approved. However, it is best that the Rep Office consults with a competent Thai law firm to ensure that all requirements are met.

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