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Representative office, Regional Office or Branch Office which one is suitable for your business expansion into Thailand
A limited company would be one of the most common solution for international companies that are looking to expand its business activities into Thailand market. However, there are alternative options available as described herein.
Representative Office & Regional Office
Representative Office (“Rep-office”) and Regional Office (“Regional Office”) are suitable options for any international companies who wish to simply obtain the juristic person number from Thai government authority – without setting up a separate entity or applying the Foreign Business License (“FBL”) – and be able to establish their physical offices in Thailand in order to conduct the following “non-income related activities” as permissible by laws:
| No | Rep-Office |
|---|---|
| 1 | Sourcing of goods or services in Thailand for the head office |
| 2 | Checking and controlling the quality and quantity of the goods purchased or hired to manufacture in Thailand by the head office |
| 3 | Giving advice concerning goods of head office sold to agents or consumers |
| 4 | African (except South African), Cambodian, Burmese, Lao, and Vietnamese |
| 5 | Report on the business trends in Thailand to the head office |
| No | Regional Office |
|---|---|
| 1 | Communicating, coordination and directing, on behalf of the head office, the operation of branches and affiliates that are located in the region. |
| 2 | Consulting and management in training and human development |
| 3 | Provide financial management service |
| 4 | Marketing control and sale promotion planning |
| 5 | Product development |
| 6 | Services in research and development |
Both Rep-office and Regional Office cannot generate any income except for the financial support from its head office – which shall not be subject Corporate Income Tax – nor receive any purchase orders or make sales or negotiate business with any third party. The minimum capitalization required for registering Rep-office and Regional Office is THB 2 million, which shall be brought/transferred into their bank accounts in Thailand within 3 years as follows:
- The first 25% of the required registered capital is to be paid up within the first 3 months of operation;
- The second 25% to be paid within the first year of operation;
- The third 25% to be paid up within the second year of operation; and
- the remainder is to be paid up within the third year of operation
Branch Office
Although Rep-office and Regional Office would be considered as a branch office (“Branch Office”) in some countries, in Thailand, subject to the FBL, the Branch Office can obtain a juristic person number and perform any “income-related activity” in Thailand on behalf of its head office. The required minimum capitalization for the Branch Office is minimum THB 3 million (or higher as per the FBL’s requirement). The registration process of the Branch Office could be significant longer than Rep-Office or Regional Office depending on type of business activity.
For further information, please contact:
Mr. Bunnasomboon Chaiparinya (Aaron)
Partner
Email: aaron@jtjb.com
Mr. Yukgrit Kantamanee
Associate
Email: yukgrit.k@jtjb.com