Thailand is one of Southeast Asia’s most attractive markets for foreign investors due to its strategic location, robust infrastructure, and economic openness. However, not every foreign company is ready to establish a full business operation immediately. For many, a Representative Office serves as a suitable starting point to explore opportunities, build relationships, and gather market intelligence—without engaging in commercial transactions. This article outlines everything you need to know about setting up a Representative Office in Thailand, from legal requirements to practical benefits.
A Representative Office is a type of non-trading entity that a foreign company can establish in Thailand to engage in limited, non-revenue-generating activities. It cannot earn income, enter into contracts, or sell goods or services in Thailand. Instead, it serves to represent the interests of its parent company and support its business goals indirectly.
Representative Offices are governed by Thailand’s Foreign Business Act B.E. 2542 (1999) and administered by the Department of Business Development (DBD) under the Ministry of Commerce.
A Representative Office is allowed to engage in five specific activities, as outlined by Thai law:
Sourcing goods or services in Thailand for the head office.
Checking and controlling the quality and quantity of goods purchased in Thailand.
Providing information about new products or services to the head office.
Reporting on business developments and trends in Thailand to the head office.
Liaising between the head office and Thai customers or business partners.
Important: Any activities outside of these five are not permitted. The office cannot generate revenue, issue invoices, or sign sales contracts.
A Representative Office is ideal for companies that:
Want to conduct market research before full investment.
Intend to build supplier or customer relationships.
Need to manage product quality control or oversee suppliers.
Wish to maintain a presence in Thailand without engaging in trade.
It provides a low-risk, cost-effective way to establish a legal footprint in Thailand while maintaining full foreign ownership.
Advantages:
100% foreign ownership is allowed.
No requirement for a Thai partner or shareholder.
Low taxation: Since it earns no income, it is not subject to corporate income tax (except for staff-related expenses like withholding tax on salaries).
Ideal for market research and business facilitation.
Limitations:
Cannot generate income or engage in commercial activities.
Limited to five permitted functions only.
All operational expenses must be funded from the head office.
Subject to annual reporting and possible audits.
To qualify for establishing a Representative Office in Thailand, the foreign company must:
Be legally registered in a foreign country.
Have been in operation for at least one year.
Provide documentation demonstrating financial stability.
Commit to funding the Thai Representative Office’s operations.
There is no requirement to obtain a Foreign Business License, but the company must notify the DBD and comply with regulatory procedures.
Although a Representative Office is not required to have registered capital like a limited company, the DBD requires it to remit at least 2 million THB from the parent company as working capital.
The remittance schedule is typically as follows:
25% within the first 3 months
50% within the first year
100% within the second year
This capital must be used for operational costs such as rent, staff salaries, and office expenses.
Here’s how to establish a Representative Office in Thailand:
Prepare Documentation
Company registration certificate from the parent company (with notarization).
Articles of association or incorporation.
Power of attorney appointing a local manager.
Passport or ID copy of the local manager.
Business plan and activity details.
Office lease agreement in Thailand.
Application to the Department of Business Development (DBD)
Submit all required documents and application forms.
The DBD reviews the documents for compliance with the five permitted activities.
Receive Approval
If approved, the DBD will issue a Certificate of Registration for the Representative Office.
Tax Registration and Other Formalities
Register for a Tax ID Number within 60 days.
Enroll in social security for any employees.
Open a Thai bank account in the name of the Representative Office.
Ongoing Compliance
File annual reports to the DBD.
Maintain proper accounting records, even though the office does not generate income.
Comply with labor laws and employment regulations.
A Representative Office can hire both Thai and foreign staff. For foreign employees, a work permit is required, and the office must employ at least four Thai employees per one foreign worker to meet immigration requirements.
The local manager, who represents the parent company, must reside in Thailand and ensure compliance with Thai laws.
While a Representative Office does not generate income, it is still required to:
Submit audited financial statements annually.
File withholding tax returns for employee salaries.
Pay social security contributions.
Failure to comply with these obligations may result in penalties or even revocation of the office registration.
Setting up a Representative Office in Thailand is an excellent first step for foreign businesses seeking to explore the Thai market, manage suppliers, or facilitate communication between Thai and overseas entities—without making a full commercial commitment. It offers a cost-effective, low-risk legal presence and can later be upgraded to a limited company if commercial operations are pursued.
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