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COMPANY INCORPORATION

COMPANY INCORPORATION

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COMPANY INCORPORATION

REPRESENTATIVE OFFICE

A Representative Office is usually considered by foreign companies wanted to conduct market research and assist in finding new partners or opportunities in the market before setting up a permanent legal entity in Thailand. The purpose is to provide services and advice to its foreign head office or affiliated companies. The services it can provide are limited and is not allowed to generate any revenue. 

OVERVIEW 

Up to 100% Foreign Ownership

Prohibited to earn revenue and restricted to certain activities

Registration takes 2-4 weeks 

3M THB paid up capital 

No corporate income tax obligations

Foreign Business License issued upon approval of registration

RESTRICTED SCOPE OF ACTIVITIES

Under Thai regulations, Representative Offices scope of activities is restricted to 5 categories as follows: 

1. To report the business trends, developments and activities in Thailand to the head office or affiliated companies 

2. To advise on various aspects on the goods distributed by the head office or affiliated companies

3. To seek for the supply source of products or services in Thailand for the head office or affiliated companies

4. To inspect and control the quality and quantity of the goods purchased or ordered to be manufactured in Thailand

5. To market and disseminate information about new goods or services of the head office or affiliated companies

The Representative Office is strictly limited to the five activities above and may engage in any or all of them. The following business activities are outside the scope of activities of a Representative Office:

  • Making any purchases or payments or any related business transactions on behalf of the head office or affiliated companies

  • Making exports of any products ordered by the head office or affiliated companies

  • Performing quantity and quality control for unaffiliated companies

  • Performing after-sale services such as installation or maintenance

  • Providing advice regarding products that are produced by unaffiliated companies

  • Accepting purchase orders on behalf of the head office or affiliated companies

  • Coordinating the sales of products on behalf of the head office or affiliated companies

  • Publicizing products or service which are already available in Thailand

  • Acting as an agent or distributor between the head office or affiliated companies

  • Performing any planning or coordination with other entities on behalf of the head office or affiliated companies

  • Acting as an agent of the head office or affiliated companies in any contracts or any business transactions

  • Making business reports to unaffiliated companies

Regulatory Requirements

1. Capital Requirements: Certain capital amounts have to be remitted from the head office into Thailand. Updated regulations require to maintain at least 2M THB in minimum capital

2. DBD Registration: The Representative Office has to be registered at the Ministry of Commerce, obtain a 13-digit registration number, and has the same reporting requirements as a corporation. The registrar requires information and documents of the head office containing name, capital, address, directors, authorized signatories, financial statement of the past 3 years and etc. Additional information would be required are business plan, financial forecast, and similar information.

3. Representative Officer: Fulfilling requirements such as qualification, Thai residency, employment arrangements and other supporting documents

4. Work Permit: Securing a work permit with the usual Thai to foreign employee ratio of 4:1 quota

5. Tax Registration: Although Representative Offices are not subject to taxation in Thailand, they are still required to obtain a tax registration and submit tax returns to the Revenue Department.

6. Accounting and audit: The Representative Office requires monthly bookkeeping and financial statements have to audited by a qualified and licensed Thai auditor on a yearly basis.

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