Thai Representative Office
The services that a representative office can provide are limited. The Representative Office cannot take orders, make sales, engage in business negotiations, or even make any profit. Moreover, a representative office can only sign contracts necessary for its activities, such as lease agreements. In addition, the activities of the representative office must be fully funded by the foreign head office.
Characteristics of the Representative Office as a legal entity
- Foreign ownership - up to 100%;
- Capital requirement is a minimum of THB 2 million paid-in capital;
- Tax rate - no tax liability as the Representative Office in Thailand cannot generate income;
- License to conduct foreign business - issued after approval of registration;
- Restrictions on doing business - it is forbidden to receive payment and is limited to the company for which the Representative Office is registered.
Permitted activities
It should be noted that the Representative Office has a strict limitation on five types of activities carried out on behalf of its foreign head offices, namely:
- Search for local sources of goods or services;
- Inspection and control of the quality and quantity of goods purchased or ordered for production in Thailand;
- Providing information about head office products sold directly to local distributors and consumers;
- Introduction of new products or services of the head office;
- Report to head office on trends, developments, and activities in Thailand.
Regulatory requirements
- Business license for foreign capital - not required;
- You must register with the DBD and obtain a 13-digit registration number;
- Fulfilling the requirements for the representative, such as qualifications, residence in Thailand, employment, etc.;
- Work Permit: Reduced from the usual ratio of Thai to foreign workers from 4:1 to 1:1;
- Tax registration: They still have to register and file tax returns despite not being subject to taxation;
- Accounting - monthly and annual tax reporting.
Register
List of documents
- Foreign head office documents showing name, capital, location, directors, signatories, and financial statement for the last three years;
- number of shareholders - indicating nationality and number of shares held;
- office address in Thailand indicating the map and ownership or ownership of the office space (lease agreement);
- employee data - number, name, salary;
- reason for creating the representation.
Extra
- business forecast for the next three years;
- type, size, and period of the proposed activity;
- activity steps;
- used machines/equipment;
- impact on the Thai economy;
- cost estimate for three years;
- plan to import foreign technology.