Representative Office
A Representative Office is a popular choice for foreign companies wishing to explore the Thai market or allow their head office to liaise with their business interests in Thailand.
A Representative Office provides non-commercial services, primarily promoting and representing its parent company and cannot generate any revenue.
Representative Office at a glance
Wholly owned by the parent company, the Representative Office in Thailand operates under the direct liability of the parent company, without any separate liability.
Representative Offices are not permitted to generate income, there they are not subject to Corporate Income Tax in Thailand.
The ratio for Representative Offices is 1:1 (1 Thai employee for every foreign employee), in contrast to the general 4:1 ratio for limited companies. In practice, Representative Offices can employ up to 3 foreign workers.
Why work with VB Partners?
Embarking on a business venture, especially in a foreign country, can appear overwhelming. At VB & Partners, we understand this challenge and our experts are ready to assist with your needs. Our comprehensive range of services covers every step, from initial business feasibility assessments to complete incorporation and starting your business operations.
Navigating local laws and regulations is an essential concern for foreign enterprises. Our tailored solutions are designed to ensure adherence to all legal requirements. Backed by a team of experts who are familiar with the Thai market and regulations, resulting in the smooth operation of your business.
VB & Partners takes pride in its assembly of seasoned experts. Ranging from Incorporation, Accounting & Secretary Services to Immigration and Real Estate, VB & Partners stands as your premier destination for all your legal and accounting needs.
What does this package include
- Coordinate and submit the necessary documentation to the Foreign Business Administration Office for the establishment of a Representative Office. This entails the meticulous gathering and organization of requisite documents from the parent company, as well as detailing the intended structural framework of the Representative Office.
- Address any inquiries concerning the setup of the Representative Office throughout this foundational process.
- Provide advisory regarding post-registration obligations to guarantee seamless business operations.
Reduced ratios for hiring foreign employees
Price: + 7% VAT
What you must know before applying
Book a Call with our expert
Up to an hour consultation on the process of starting and running a business in Thailand.
During this session, our lawyer will provide insights into key areas, including company structure, outsourced employment services, taxes, accounting, and other general facets of running a business in Thailand. Additionally, we are here to address any other legal queries you might have, ensuring you have a comprehensive understanding of the topic at hand.
Our responses will be pragmatic, breaking down both the legal aspects and local practices in a manner that’s easy to grasp.
Should your questions require additional research, our experts will delve deeper and follow up with further insights via email.
This consultation is offered by legal experts fluent in English, French, or Thai.
Frequently Asked Question
The main advantages of setting up a Representative Office in Thailand is the possibility to support one work permit per foreign employee with only one Thai employee (the ratio for a limited company is 4 Thai employees per foreign employee except if the company has obtained a promotion from the Board of Investment). The maximum number of foreign employees is usually 3 (it is sometimes possible to obtain several more work permits depending on the activity of the Representative Office).
As the Representative Office cannot generate income in Thailand, it is not subject to corporate income tax. However, the employees are still subject to the personal income withholding tax on their salaries.
The main advantages of setting up a Representative Office in Thailand is the possibility to support one work permit per foreign employee with only one Thai employee (the ratio for a limited company is 4 Thai employees per foreign employee except if the company has obtained a promotion from the Board of Investment). The maximum number of foreign employees is usually 2 (it is sometimes possible to obtain several more work permits depending on the activity of the Representative Office).
As the Representative Office cannot generate income in Thailand, it is not subject to corporate income tax. However, the employees are still subject to the personal income withholding tax on their salaries.
To cope with the inability of the Representative Office to enter into commercial agreements and generate income, it is a common practice for foreign companies to set up an invoicing company in Singapore or a limited company in Thailand with a local partner to support its business activities in Thailand. Our market entry expert will advise you on the best entry strategy.
To qualify for a work permit for a Representative Office, the following criteria must be met:
- A capital investment of a minimum of 2 Million Baht.
- Employment of at least one Thai individual.
It's important to note that the above specifications pertain to a single work permit. For each additional work permit, the same conditions apply. Nonetheless, in current practice, the immigration authority is willing to issue work permits as long as there's a maintained 1:1 ratio and the investment adheres to the prescribed schedule.
A Representative Office is not allowed to generate any income nor enter into commercial agreements (on its own account or on behalf of the parent company). It can only sign the necessary documents for its operation in Thailand. The expenses of the Representative Office must be fully financed by its parent company.
Remove the last sentence “To hire a foreign employee, the 2 million Baht must be fully transferred into the Thai bank account of the Representative Office and one Thai employee is required to support the work permit. To hire a second foreigner, another 2 million Baht (a total of 4 million Baht) will have to be transferred.”
A Representative Office has the ratio of 1 Thai employee per foreign employee but its activities are limited and it cannot generate income while a Thai Limited Company with a local partner can carry out most business activities without any specific restrictions. The key differences are highlighted below:
| REPRESENTATIVE OFFICE | THAI LIMITED COMPANY | |
| Liability | No separate liability from the head office | Liability of the shareholders limited to the amount invested |
| Foreign ownership | Up to 100% | Limited to less than 50% in most activities except with BOI Licence |
| Thai to foreign employee ratio | 1:1 | 4:1 |
| Corporate income tax rate | No corporate income tax | 20% |
| Business restrictions | Limited to 5 activities. Cannot generate income. | No specific restriction if more than 50% of the capital is held by Thai shareholders |
| Reporting and audits | Annual accounting audit | Annual accounting audit |
| Timeline | 2 week | 1 week |