A Representative Office in Thailand is a popular option for foreign companies seeking to establish a presence in the country without engaging in direct revenue-generating activities. This structure allows overseas businesses to explore the Thai market, support their head office, and coordinate operations while remaining compliant with Thai law. Understanding the legal framework, permitted activities, and registration process is essential before setting up a Representative Office.
1. What Is a Representative Office?
A Representative Office is a business unit established by a foreign company in Thailand that is not permitted to generate income within the country. Unlike a Thai Limited Company, a Representative Office does not have separate legal personality; it operates as an extension of the foreign head office.
Representative Offices are governed by the Foreign Business Act B.E. 2542 (1999) and are allowed to operate without a Foreign Business License, provided their activities remain within the legally permitted scope. This makes the Representative Office an attractive option for companies that want a low-risk and compliant entry into the Thai market.
2. Permitted Activities of a Representative Office
Thai law strictly limits the activities of a Representative Office. The office may only engage in non-commercial, non-income-generating functions on behalf of its head office. Permitted activities include:
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Sourcing goods or services in Thailand for the head office
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Conducting quality control and inspection of products
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Providing advice, information, or support to local distributors or agents
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Disseminating information about products or services of the head office
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Reporting on market trends and business opportunities in Thailand
Any activity involving sales, contract execution, invoicing, or receipt of income in Thailand is strictly prohibited. Violating these restrictions may result in penalties or forced closure of the office.
3. Advantages of a Representative Office
Setting up a Representative Office offers several advantages for foreign businesses:
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No corporate income tax on revenue, as the office cannot generate income
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No requirement for Thai shareholders or partners
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Lower compliance burden compared to a Thai Limited Company
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Ability to legally station foreign staff in Thailand
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Useful for market research and long-term expansion planning
However, it is important to note that a Representative Office must still comply with employment, immigration, and reporting obligations.
4. Capital Requirements
There is no formal minimum registered capital requirement under Thai law for a Representative Office. However, in practice, the authorities generally expect the head office to remit sufficient funds to cover operating expenses.
Typically, the recommended capital is THB 2–3 million, especially if the office intends to employ foreign staff. The capital is not registered as share capital but is recorded as operational funding from the head office.
5. Application and Registration Process
The process of setting up a Representative Office involves registration with the Department of Business Development (DBD) under the Ministry of Commerce.
Step 1: Prepare Required Documentation
Key documents include:
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Application form for establishment of a Representative Office
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Certificate of incorporation of the foreign head office
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Articles of Association of the head office
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Financial statements of the head office
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Power of Attorney authorizing a representative in Thailand
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Description of proposed activities in Thailand
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Office address lease agreement
All foreign documents must be notarized and legalized, and documents in foreign languages must be translated into Thai.
Step 2: Submit Application to the DBD
The application is submitted to the DBD for review. Authorities will examine whether the proposed activities fall strictly within the permitted scope for a Representative Office.
The review period generally takes 2–4 weeks, depending on the completeness of documentation and the complexity of the proposed activities.
Step 3: Registration Approval
Once approved, the Representative Office is officially registered and may commence operations within its approved scope. Any changes to activities or address must be reported to the DBD.
6. Tax and Accounting Obligations
Although a Representative Office does not generate income, it is still subject to certain tax and accounting requirements:
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Registration for Corporate Income Tax (for reporting purposes)
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Monthly withholding tax filings if salaries are paid
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VAT registration may be required if the office engages in VAT-liable transactions, though this is uncommon
The office must maintain proper accounting records and submit annual financial statements, even if it reports zero revenue.
7. Employment and Work Permits
A Representative Office may employ both Thai and foreign employees. Foreign employees must obtain:
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A Non-Immigrant “B” visa
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A valid work permit
The number of foreign employees permitted depends on the office’s operational budget and justification. The office must also register with the Social Security Office if it hires Thai staff and make monthly contributions.
8. Office Address and Physical Presence
A Representative Office must have a physical office address in Thailand. Virtual offices are generally not acceptable. The lease agreement must be valid and compliant with local regulations.
The office address is part of the official registration and must be updated if the office relocates.
9. Ongoing Compliance and Reporting
After registration, a Representative Office must comply with ongoing obligations, including:
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Annual submission of financial statements
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Notification of changes to authorized representatives
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Renewal of visas and work permits for foreign staff
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Compliance with labor and social security laws
Failure to meet compliance requirements may result in fines or revocation of registration.
10. Representative Office vs Thai Limited Company
A Representative Office is suitable for companies that want to explore the market or support existing operations without conducting business transactions. In contrast, a Thai Limited Company allows full commercial activities but involves higher compliance and ownership restrictions.
Choosing the correct structure depends on long-term business goals, budget, and operational needs.
Conclusion
Setting up a Representative Office in Thailand is an effective way for foreign companies to establish a compliant and low-risk presence in the Thai market. While the structure offers significant advantages in terms of simplicity and control, it comes with strict limitations on commercial activities. Careful planning and adherence to legal requirements are essential to ensure smooth operations. For many companies, a Representative Office serves as a strategic first step toward future expansion in Thailand.
