What is an Representative Office in Thailand for?
A foreign entity may establish a representative office in Thailand to engage in limited non-revenue-earning activities.
What can I do with an Representative Office?
It is only possible to
- Searching for local sources of goods or services for its head office
- Inspecting and controlling the quality and quantity of goods procured by its head office
- Providing advice in various fields relating to products directly sold by its head office to local distributors or consumers
- Disseminating information about new products and services of its head office
- Reporting to its head office on local business developments and activities
What are the benefits?
The company gets benefits like
- The first few initial work permits at easier conditions then i.e. a regular Thai company would
- The Representative Office is exempted of paying corporate income tax
- Once closed funds can be remitted back to head office
What are the downsides?
A representative office is always considered to be foreign which can create additional documentation requirements of several government agencies and other pitfalls.
This means paperwork will be extensive and comparable with BOI requirement and benefits way higher…
Must remit 2 million Baht in the first year of business and a total of 3 million over 5 years.
What are the work permit requirements?
Up to two foreigners who advise or distribute information about their company’s products or provide reports about the Thai market to their home offices can qualify for a work permit.
However up to five foreigners may qualify for a work permit who source goods and services in Thailand for the foreign company or who are responsible for quality control for such goods and services. If the representative office sources at least 100 million Baht in goods and services from Thailand during the preceding year then the work permit limit may be expended.
Are there other things to consider?
It is quite essential to understand that the foreign company and the Representative office are considered to be the same single legal entity, with the result that the foreign company is bound to third parties by the acts which its Representative office has conducted within the scope of authority granted to it. If the Representative office commits an act without authority or acts beyond the scope of its authority, that act would not bind the company as a matter of Thai law unless the company has ratified the act.
We are looking forward to help you grow your business and as well to receive your inquiry soon.
|■ Acting beyond authority is not binding for foreign company||■ Very limited in business activities|
|■ Forced to remit capital|
|■ Limited number of work permit|
|■ Strictly regulated and controlled|
Legal Disclaimer: All information displayed on this site are compiled with the most amount of care. As law and life is bound to changes we cannot warrant that all information is accurate at all time and intended to be a guideline. In order to provide you a correct and up to scratch information please do contact our experienced business lawyers and accountants.