In H&P professional opinion, sometimes it is advisable for foreign entrepreneurs looking for business opportunities in Thailand to establish first a representative office before incorporating a limited company.
Although in the past it was extremely difficult to set up a Rep Office in Thailand, as it was required to obtain a Foreign Business License FBL that would take a minimum of 6 months, now, since 9th of June 2017 with the amendments of the regulation the process of setting up a Rep Office in Thailand is quite simple and straightforward as representative offices do not require foreign business license anymore.
To sum up, the timeframe 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.
The Thai Law that applies to representative offices can be found at 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 the representative offices are permitted to 5 business activities only:
1)Sourcing of Goods and Services in Thailand for its head office
2)Checking and controlling the quality and quantity of goods purchased and services hired in Thailand by its head office
3)Advising Thai customers or agents regarding goods and services sold by its head office in Thailand
4)Informing customers regarding goods and services of its head office in Thailand
5)Reporting on business trends in Thailand to its head office
H&P lawyers in Bangkok can assist you in the process of incorporating a Representative Office in Thailand, a process that can be divided in two parts:
A) Submission of documentation such as application, POA and copy of passports and affidavit among other documents an
B) Issuance of a registration number by DBD (a 13-digit registration number).
In the opinion of our lawyers in Thailand, the negative aspect of setting up a Rep 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 a Rep Office in Thailand don’t 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]
