How to Set Up a Representative Office in Thailand ?
In H&P’s professional opinion, it is advisable for foreign entrepreneurs looking for business opportunities to establish a representative office in Thailand before incorporating a limited company.
What is the representative office ?
The representative office is the go-to option for overseeing specific non-expenditure activities of a foreign company within Thai territory. A representative office focuses on strategic support without directly generating income in the country. Establishing one might be more straightforward than setting up a branch office in Thailand, making it an appealing choice for foreign enterprises.
In the past, it was extremely challenging to set up a Thai representative office, as it was required to obtain a Foreign Business License (FBL) that would take a minimum of 6 months. Now, since the 9th of June 2017, with the amendments of the regulation, the process of setting up a representative office in Thailand is quite simple and straightforward as they do not require foreign business licenses anymore.
To sum up, the timeframe was shortened from 6 months to 5 working days, which from H&P Bangkok lawyers’ experience, has incentive the interest of foreign business people in representative office in Thailand.
5 Permitted Activities for Representative Offices
The Thai Law that applies to representative offices can be found in List three of Foreign Business Act B.E. 2542 (A.D. 1999) and B.E. 2544 (A.D. 2001). The representative offices are not similar to limited companies as they are permitted to 5 business activities only:
- Sourcing of goods and services in Thailand for its head office.
- Checking and controlling the quality and quantity of goods purchased and services hired in Thailand by its head office.
- Advising Thai customers or agents regarding goods and services sold by its head office in Thailand.
- Informing customers regarding goods and services of its head office in Thailand.
- Reporting on business trends in Thailand to its head office.
Set up a representative office in Thailand with H&P
H&P law firm in Bangkok can assist you in the process of incorporating a representative office in Thailand, the process of representative office registration can be divided into 2 parts :
- Submission of documentation such as application, POA, and copies of passports and affidavits among other documents.
- An issuance of a registration number by DBD (a 13-digit registration number).
In the opinion of our law firm in Thailand, the negative aspect of setting up a representative office in Thailand is that representative offices cannot generate income or profits.
On the other hand, the most attractive aspect of a representative office in Thailand is that it does not need to follow the quota of 4 Thai employees per 1 foreigner as it’s the basic rule for limited companies. Regarding the quota to obtain a work permit and Non-B Visa for a foreign employee in a representative office, the quota is only 1 Thai employee per 1 foreign employee.
Please contact our Bangkok Law firm if you are interested in setting up a Representative Office in Thailand at [email protected]
FAQs about Representative Office in Thailand
1. Can a representative office generate income?
No, representative offices in Thailand are restricted from engaging in income-generating activities. Their primary functions are strategic and supportive.
2. What are the permitted business activities for representative offices?
Representative offices in Thailand are limited to sourcing, quality control, customer advisory, information dissemination, and business reporting.
3. What is the employee quota for representative offices in Thailand?
Unlike limited companies bound by a 4:1 ratio (4 Thai employees per 1 foreigner), representative offices operate with a more flexible employee quota of 1 Thai employee per 1 foreign employee.
4. How long does the setup process take for a representative office?
If you wish to set up a representative office in Thailand, please note that the streamlined process would take approximately 5 working days.
5. What documents are required for representative office setup?
Necessary documents include the application, Power of Attorney, copies of passports, and additional documents as specified.