Representative Offices in Thailand

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Representative Offices in Thailand

If you’re the head of a foreign company looking to establish business within Thailand, there are several issues that should be in the forefront of your mind. Perhaps the most important of these is that the Foreign Business Act B.E. 2542 (A.D. 1999) prohibits foreign companies from doing just that.

Under the above regulation, the business activities that representative office can carry out are limited to 5 business activities:

  1. Sourcing of goods or service in Thailand for the head office.
  2. Checking and controlling the quality and quantity of goods purchased or hired to manufacture in Thailand by the head office.
  3. Giving advice concerning goods of the head office sold to agents or consumers.
  4. Propagation of information concerning new goods or services of the head office.
  5. Report on business trends in Thailand to the head office.

General characteristics of the representative office

  1. Non revenue-generating activities.
  2. No authority to accept purchasing order or to make offer for selling or to negotiate for carrying out of business with person or juristic person in the country in which it is established.
  3.  All expenditures incurred by the representative office must be borne by the head office.
  4. It is not subject to corporate income tax, in accordance with revenue code except deposit interest of remitted funds from the head office has to pay tax.

Out of scope activities of the representative office

  1. Purchasing order or payment of goods on behalf of the head office or its affiliated companies or any activities concerning the purchasing.
  2. Shipment the goods of the head office or its affiliated company already purchased.

 

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