Application for registration of a representative office in Thailand of a foreign company engaged in international trading business
Scope of Activities of a Representative Office
As required by the Thai law, the business activities that a representative office can carry out in Thailand are limited to five business activities concerning:
- Sourcing of goods or services inThailand for head office
- Checking and controlling the quality and quantity of goods purchased or hired to manufacture in Thailand by the head office
- Giving advice concerning goods of the head office sold to agents or consumers in Thailand
- Propagation of information concerning new goods or services of the head office
- Reporting on business trends in Thailand to the head office.
The above activities are regarded as service activities under List 3 (21) of the Thailand Foreign Business Law, and thus the registration of a representative office requires a Foreign Business License from the Director-General of the Department of Business Development.
General Characteristics of a Representative Office
- It has non income-generating activities;
- It has 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 registered;
- All of its incurred expenditures must be shouldered by its head office;
- Normally, it is not subject to Corporate Income Tax, in accordance with the Revenue Code except for deposit interest of remitted funds from the head office has to pay tax.
Out of scope activities of a Representative Office
The following are the services that a representative office is not permitted to do otherwise it will be considered as an entity doing business here in Thailand and may be subject to the revocation of its license:
- Purchasing order or payment of goods on behalf of the head office or its affiliated companies or any activities concerning purchasing;
- Shipment of goods of the head office or its affiliated companies already purchased;
- Checking and controlling the quality and quantity of goods for any companies that are not the head office nor its affiliated companies;
- Executing after sale service concerning installation and maintenance;
- Performing advice concerning goods that were not produced nor sold by the head office or its affiliated companies;
- Receiving purchase order or service on behalf of the head office or its affiliated companies;
- Coordinating in purchasing or selling on behalf of the head office or its affiliated companies;
- Propagation of information concerning previous goods or services that are already sold inThailand;
- Carrying out activities as middleman or agent between customers in Thailand
and head office or its affiliated companies;
- Planning and coordinating with any organization in terms of business on behalf of the head office or its affiliated companies;
- Being a representative in making any contracts or activities on behalf of the head office or its affiliated companies;
- Reporting information to any companies that are not the head office nor its affiliated companies
Government Fees for a Representative Office
Application fee (nonrefundable) is THB 2,000. If the application is approved, the government fee will be set at the rate of THB 5 for every THB 1,000 or a fraction thereof of the registered capital, with a minimum of THB 20,000 and a maximum of THB 250,000.
Tax Position of Representative Office
The representative office is required to obtain a corporate tax identification number and submit income tax returns and balance sheets, even if there was no transactions in the past accounting period.
Individual aliens and all local staff of a representative office are required to obtain taxpayer cards and pay personal income tax.