Overview of Representative Office in Thailand
The Representative Office (or so-called “Rep-Office”) is one type of the legal vehicles available for a foreign entity to expand its existence in Thailand. Nevertheless, under Thai laws, the Rep-Office is allowed to conduct only non-income related activities to support the head office as follows:
- Sourcing of goods or services in Thailand;
- Checking and controlling the quality and quantity of the goods purchased or hired to manufacture in Thailand by the head office;
- Giving advice concerning to goods of the head office sold to agent or consumers;
- Propagating of information concerning new goods or services of the head office; and
- Report on business trends and movement in Thailand
Recently, the processes and information and documentation required for applying the Rep-Office with the related government authority were considerably complicated and thus consume several months (occasionally up to 6 months). However, due to the recent Ministry Regulation issued on May 26, 2017, which reduces the complexity, requirement and lengthy processes of applying the Rep-Office. Resulting that the whole processes of applying the Rep-Office would be significantly faster than before.
In terms of taxation, the Rep-Office, in general, does not hold a tax burden for income received from its parent company for operational cost in Thailand – and it is barred from generating any income or engaging in any income related activity. Moreover,
The Rep-Office can employ from 2 to 5 expatriated employees based on the its business activity and the number of its local Thai employee.
In summary, with related laws gearing toward lifting restrictions and tax advantages, the Rep-Office is attractively found as a suitable choice for any foreign/international companies that are seeking to establish its supporting office in Thailand.
Should you need any further assistance regarding to establish the Rep-Office in Thailand, please contact Mr. Bunnasomboon Chaiparinya (or Aaron) or Mr. Phutthaphot Nonthree.