Establishing a representative office in Thailand is an excellent way to explore the local market and assess the business environment. However, there are several requirements that need to be met before submitting the application.
A foreign company that intends to set up a representative office in Thailand must submit the following documents to the government. These include:
Location
Foreign companies that want to explore the Thai market can register a representative office. This type of entity can be 100% foreign-owned and is not subject to corporate taxes. Its activities are limited to market research and finding new partnerships. Representative offices must comply with several regulations and report their findings to the head office.
It must be established in the city of Bangkok or a major town. It must also be able to provide a business address, phone numbers, and email addresses. It should also have a meeting room that can accommodate up to 10 people. In addition, it must have a notarized power of attorney from the parent company and a certified copy of the passport of the person representing the office.
Representative offices manage service businesses on behalf of the head office or affiliated companies. However, they cannot sell goods or negotiate with natural persons. They also must submit their financial statements and audited financial reports to the Department of Business Development.
Business plan
A representative office is the ideal choice for a foreign investor exploring the Thai market. It is a non-trading business entity and can be 100% foreign owned. It is not required to have a corporate tax ID number or earn income in Thailand. However, it must report all expenses to the head office in its home country and be fully financed by the parent company. Its permitted activities include: sourcing and monitoring products purchased in Thailand by the head office; providing research reports to the parent company; and studying business information in the Thai market.
To set up a representative office in Thailand, the foreign parent company must submit a variety of documents to the Department of Business Development in the Ministry of Commerce. These include the certificate of incorporation, financial statements, and a letter of recommendation from the parent company. It must also submit notarized copies of power of attorney and passports for the manager, which can be either a Thai or a foreigner.
Letter of appointment
A letter of appointment is a document that confirms the authority of a foreign company to establish a branch office in Thailand. It must be signed by the Director of the head office and be notarized. The office also needs to submit a power of attorney for the agent or principal manager who will manage the day-to-day operations of the representative office. This person can be a Thai or a foreign national.
Representative offices are not allowed to generate revenue, but they can operate service businesses on behalf of the company’s head office or an affiliated office in another country. They can also report on business trends in the country to their head office.
A representative office must have a minimum capital requirement of 2 million baht. 25% of the capital must be injected within six months of the date the office is registered, and the rest by the end of the third year. It must also open a bank account and comply with tax reporting obligations.
License application
The license application includes documents containing information about the office, including its name, capital, directors and authorized signatories. It also requires a declaration on the business activities that will be conducted in Thailand. In addition, the representative office must have a bank account to receive funds from its head office. It must also register its Thai employees and comply with tax reporting requirements.
The representative office can perform non-revenue-generating services for its head office, an affiliate or a group company in another country. However, it cannot accept purchasing orders or offer to sell goods to persons or juristic persons in Thailand. It also cannot negotiate for carrying out business with such persons.
The representative office must have a manager to manage its operations in Thailand. The manager must be appointed through a Letter of Appointment, which must be signed by the Director of the foreign entity. The letter must include a statement that the applicant, directors, managers and appointed representatives satisfy the qualifications under section 16 of the Foreign Businesses Act.
