Representative Office in Thailand

What is a Representative Office?

A foreign company will usually set up a Representative Office in Thailand, so that it can be responsible for certain non-expenditure activities of the said foreign company. A representative office is often easier to establish than a branch office. On the other hand, this Thai office cannot generate income for the foreign company in Thailand.

If a representative office engages in any of the approved activities without providing any service and abstains from any forbidden activities, it will not be liable for Thai taxation. Such a representative office will receive a subsidy from its head office to cover all expenses in Thailand. Revenues or gross receipts accepted by a representative office and received from its head office are not classified as revenue by the Revenue Department and are excluded from the calculation of juristic person income tax.

Although a representative office in Thailand will not be subject to Thai taxation, representative offices still need to get a Corporate Tax Identification number, as well as shall submit income tax returns along with audited financial statements to the Revenue Department and the Department of Business Development.

The Foreign Business Operation Committee have clarified the following activities a representative office is allowed to engage in, depending on the business characteristics of the office:

  • Sourcing goods or services in Thailand for the head office.
  • Checking and controlling the quantity and quality of goods purchased or hired to manufacture in Thailand by the head office or that the group company purchased.
  • Providing advice concerning goods of the head office sold to agents or consumers.
  • Spreading information concerning new goods or services of the head office.
  • Reporting information concerning new goods or services of the head office according to business trends.

Requirements for settinmg up A Representative Office In Thailand

The requirements to open and register a Representative Office in Thailand are as follows:

  • No specific Thai and foreign shareholder splits or ownership are required
  • At least one representative must be present to handle the day-to-day management.
  • Minimum of THB 3 Million shall be used as investment not paid up capital.
  • Submission of tax returns (only taxation of salaries paid to the employees of the office) is required.
  • An application fee of THB 2,000 (subject to change, so please check with us first) shall be paid.

Characteristics of the Representative Office In Thailand

Representative offices manage service businesses in Thailand on behalf of the head office,  group company, or affiliated company in different countries. Specifically, the representative office renders services to its head office or its affiliated company and does not receive payment for the business activities.

Strictly non-revenue-generating activities are allowed to be performed by the representative office. Moreover, a representative office cannot accept orders or make offers for selling. It also cannot negotiate business matters with a juristic person established in Thailand.

As representative offices cannot generate income in Thailand, the head office must bear any and all expenditures incurred by such offices. Therefore, the representative office isn't subject to corporate income tax with the exception of remitted funds from the head office, in accordance with the Revenue Code.

The following operations are not within the scope of a Representative Office in Thailand:

  • Shipping purchased goods of the head office or their affiliated companies.
  • Making purchase orders or payments for the head office or its affiliated companies or any other activities regarding purchasing.
  • Offering any after-purchase services like maintenance or installation.
  • Controlling and checking the quantity and quality of any goods for local or foreign companies that aren't the head office or its affiliated company.
  • Obtaining any purchase orders or services for the head office or its affiliated companies.
  • Offering advice regarding goods distributed or produced by any company other than the head office or its affiliated companies.
  • Information or propagation regarding goods or services already sold in the country.
  • Becoming involved in the purchase and selling process for the head office or any affiliated company.
  • Serving as a middleman between the head office and affiliated companies and customers based in Thailand.
  • Coordinating and planning any business operations with other organizations from the head office or its affiliated companies.
  • Reporting any information back to companies that aren't the head office or its affiliated companies.
  • Acting as a representative in structuring any contract or business development activities for the head office or any of its affiliated companies.

The director of the foreign entity will be required to sign a Letter of Appointment for the representative office. Thereafter, the representative office manager will need to verify the accuracy of all the documents before they submit the application. These documents include a declaration that the directors, applicant, managers, or the appointed representative satisfy all the qualifications and don't have any forbidden characteristics under Section 16 of the Foreign Business Act. The documents must be certified and notarised by a local Thai embassy.

Once the submitted application is approved, it will be granted a Foreign Business License to commence operations in Thailand. Then, the local manager designated by the head office will possess the authority to operate as a service business of the foreign head office.

Benefits Of Establising A Representative Office

  • It is completely owned by a company in a foreign country.
  • No corporate taxes apply to a representative office in Thailand.
  • No government fees are involved in setting up representative offices.
  • Representative offices in Thailand are not bound by the work permit ratio of employing four Thai employees for every foreign employee. A representative office can issue two to three work permits, but they are eligible for more if they have generated over 100 million baht.
  • Incorporating a representative office in Thailand is the easiest way to establish a local presence in Thailand.

Capital Requirements

Representative offices generally require a minimum capital influx of either 25% of the estimated expenses for the first three years or THB 3 million, depending on which amount is greater. This amount is transferred to the manager of the Thai office according to a predetermined schedule. 25% of the first required registered capital must be paid within the first three months of business operations. The next 25% must be paid in the first year of operations, and the last 25% must be finalised during the second year of business operations. The remaining amount must be paid during the third year.


There are several activities which are not listed here but may imply that the representative office may be liable for certain income and corporate taxes, for which the head office is responsible for, but the representative office may incur such taxes. Due to this and other reasons, and in order to undertsand the requirements and prerequisites for setup of a representative office, it is highly recommended to contact professionals from Juslaws & Consult for a FREE first consultation