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Thailand’s dynamic economy, strategic location in Southeast Asia, and growing consumer market make it a popular destination for foreign businesses looking to expand their regional presence. While some investors aim to establish fully operational companies in Thailand, others prefer to maintain a non-commercial presence to oversee activities, gather information, or support their head office abroad. In such cases, a Representative Office (RO) is an ideal option.
This article provides a comprehensive overview of what a Representative Office is, the legal framework in Thailand, its functions, limitations, setup process, and ongoing compliance requirements.
Under Thai law, a Representative Office may only engage in activities that benefit the parent company without generating income in Thailand. These activities include:
Sourcing Goods or Services – Finding suppliers, inspecting product quality, and coordinating purchases for the head office.
Market Research – Gathering commercial information related to the Thai market and reporting findings to the parent company.
Quality Control – Checking and controlling the quality and quantity of products ordered by the parent company.
Advisory Services – Providing information to the parent company’s customers or distributors regarding goods or services.
Business Communication – Acting as a communication channel between the head office and Thai business partners.
👉 Importantly, an RO cannot sell products, engage in trading, sign sales contracts, or receive income in Thailand. All expenses must be funded by the foreign head office.
Despite its limitations, a Representative Office offers several advantages to foreign businesses:
Full foreign ownership without the need for a Thai partner.
Market entry tool for companies not yet ready to fully commit to local incorporation.
Low risk as no revenue is generated locally, reducing exposure to taxation.
Facilitates visas and work permits for foreign staff employed by the RO.
Brand presence in Thailand without the cost and complexity of running a full business operation.
An RO is not suitable for businesses that intend to trade or generate income in Thailand. Some of its limitations include:
Prohibited from revenue-generating activities.
Cannot issue invoices or engage in sales transactions.
All operational funds must come from the parent company abroad.
Must be strictly limited to the five permissible activities.
Requires government approval under the Foreign Business Act, which can take time.
Companies seeking to engage in direct commercial activities may be better suited to establishing a Thai Limited Company or applying for Board of Investment (BOI) promotion.
Key requirements for establishing a Representative Office in Thailand include:
Parent Company: Must be a legally registered entity abroad.
Capital Injection: While there is no registered capital requirement, the law requires a minimum working capital of 3 million THB over three years, with at least 2 million THB injected in the first year.
Office Address: The RO must have a registered office in Thailand.
Chief Representative: The parent company must appoint at least one chief representative to manage the office.
Employees: Foreign staff may be employed, but work permits are subject to Thai labor laws. Typically, for each foreign employee, the RO must employ at least four Thai employees.
Define the purpose and scope of the RO’s activities.
Collect corporate documents from the parent company (certificate of incorporation, financial statements, board resolution).
Prepare translations into Thai where necessary.
Submit the application to the Department of Business Development (DBD) under the Ministry of Commerce.
Include supporting documents: business objectives, details of the parent company, capital structure, and planned activities in Thailand.
The DBD will review the application to ensure compliance with the Foreign Business Act.
Approval time varies but generally takes 2–3 months.
Once approval is granted, the RO must register with the relevant tax authorities.
Obtain a taxpayer identification number (TIN).
Register for Social Security if employing staff.
Apply for visas and work permits for foreign employees, subject to the capital and employment ratio requirements.
Although ROs do not generate income, they must comply with Thai regulations, including:
Accounting: Maintain proper accounts of expenses and submit audited financial statements annually to the DBD.
Tax Filing: Even though no income tax is paid, annual reports must still be filed with the Revenue Department.
Social Security: If employing staff, contributions must be made for both Thai and foreign employees.
Annual Renewal: The RO must demonstrate continued compliance with the permitted scope of activities.
Timeline: Establishing an RO typically takes 2–3 months, depending on the completeness of documents and government approval.
Costs: Government fees are relatively modest, but capital requirements and compliance costs (audits, accounting, office space, staffing) should be considered. Professional service fees may also apply for handling the application.
Foreign companies considering entry into Thailand should carefully weigh the RO option against alternatives:
Representative Office: Non-commercial, for liaison and research purposes only.
Branch Office: Allows revenue generation but subject to foreign business licensing and corporate tax.
Thai Limited Company: Commercially active, but generally limited to 49% foreign ownership unless BOI-promoted.
BOI Company: May allow majority or full foreign ownership with tax and non-tax incentives.
A Representative Office in Thailand is an excellent choice for foreign companies that wish to explore the Thai market, oversee quality control, or liaise with partners without engaging in direct business activities. It offers the advantage of full foreign ownership, minimal tax exposure, and the ability to employ foreign staff. However, its restrictions on income generation mean it is not suited for companies intending to actively trade or conduct business in Thailand.
For businesses looking to test the waters or maintain a non-commercial presence, the Representative Office provides a strategic, low-risk gateway into one of Southeast Asia’s most promising markets.
