How To Establish A Representative Office In Thailand

A representative office according to Wikipedia is an office established by a company to carry out marketing and other non-transactional operations, generally in a foreign country where a branch office or subsidiary is not warranted. Representative offices are generally easier to establish than a branch or subsidiary, as they are not used for actual “business” (e.g. sales) and therefore there is less incentive for them to be regulated.

Foreign businesses wanting to establish a representative office in Thailand may do so if the entity will engage in non-revenue earning activities such as:

• Sourcing of goods or services for its head office
• Inspecting and controlling the quality and quantity of goods procured by its head office
• Providing advice in various fields relating to products directly sold by its head office to local distributors or consumers.
• Disseminating information about new products and services of its head office.
• Reporting to its head office on local business developments and activities

To set up a representative office in Thailand, the following steps are to be followed:

1. The following documentation requirements should be complied with by foreign corporations wishing to engage in business in Thailand through a representative office:

• An affidavit from the manager or corporate officer, stating the following:
  • name of the corporation, registration member, and date of registration;
  • address of the registered office;
  • jurisdiction under which the corporation is registered;
  • name, address, nationality, age and race of each director, number of shares held by each, and identification of the director (s) with the power to bind the corporation;
  • authorized capital of the corporation, number of shares and par value of each, and amount of paid-up capital stock, total number of shareholders, their nationalities, and number of shares owned or held by each national group
• A power of attorney for the manager in Thailand giving him or her, in addition to the normal powers, the power to register the branch office with the pertinent Thai government authorities, and to act as the manager thereof.
  • Certified photocopies of the passport of the manager of the representative office if he is foreign or the personal I.D. and household registration of the manager if he is Thai must be provided.
• Brief description of the objectives or details of the business and steps of work. Brochure or profile of the business is required as well.
• Office address in Thailand and map thereof with contract of lease, landlord consent, etc.
• Reasons why the representative office is necessary
• Positive and negative impacts on the Thai economy and society
• Last three year’s annual financial report of the head office translated in Thai by an accredited Thai translator
• Details of technology transfer to Thai staff.
• Number and name of staff together with their salaries.
• Well known projects/ clients/ products or track record
• Business forecast plan and amount of expenses for the next three years.
• Type, value and number of machinery/office equipment to be used in the business.
• Alien Business Permit. A representative office must obtain an Alien Business Permit valid for five years which will serve as the permission/license to establish a representative office.

2. Copies of all documents must be certified to be true copies by a notary public or other official. Signatures on original documents such as the power of attorney should be certified to be true signatures and the authority of the person should also be certified by a notary public. All such notarized or otherwise certified documents must then be authenticated by a Thai Embassy or Consulate. All documents are to be submitted to the Ministry of Commerce.
3. Work permits are allowed for up to two foreigners if business is engaged in advising or disseminating information about their company’s products or provide reports about the Thai market to their home offices or up to five foreigners if business is engaged in sourcing goods and services in Thailand for the foreign company or who are responsible for quality control for such goods and services.
4. Taxation Representative Offices are income-tax exempt but they need to register for other tax purposes (e.g. withholding tax on employee’s salaries, etc.)
5. Capital Requirements.A representative office is required to remit into Thailand for its operating expenditure, a total of 3 million Baht over a period of five years, with 2 million Baht being remitted within the first year. These funds may later be remitted out to the head office if the Thai office is closed. The capital may be used for normal working capital requirements such as salaries and rent.