Company Registration in Thailand for Foreign

Small Claims

While most people find it more suitable, and easier, to open a Thai Limited Company it is important to note that there are other types of companies that you can open in Thailand that may fit your needs better, especially if you already have a business in another country. Sunbelt Asia’s team of lawyers can help you determine which of the following suits your requirements.

If you own an overseas business, then you may want to consider a Representative Office, a Branch Office or a Regional Office or Regional Operational Headquarters. Others may find that their desired business objectives fit in better with the Board of Investment’s targeted industries and wish to take advantage of the excellent tax benefits on offer while Americans will want to consider a Thai-Amity treaty company which can allow for full ownership of the business or majority American ownership.

For those looking to expand into Thailand and considering the different options they may ask how the Representative Office , Regional Office, Branch Office, Regional Operating Headquarters differ. In a nutshell, the Representative Office and Regional Office are here to represent the home office and may not generate income and are limited to certain activities, while the Branch Office and Regional Operating Headquarters are incorporated and may earn revenues and act the same as a Thai company.

Representative Office
Let’s start with the Representative Office, which is limited to non-income generating activities. There are some benefits to opening a Representative Office, especially if you aren’t actually looking to earn revenues in Thailand.

A Representative office is limited in its scope of activities to;

  • Report the business’s movements in Thailand to the head office (or affiliated company or group company).
  • Advise on various aspects of the goods distributed by the head office to distributors or other users in Thailand.
  • Source products or services in Thailand for the head office or affiliated company or the group company.
  • Quality and quantity control of goods purchased or hired to manufacture in Thailand for and by the head office.
  • Disseminate information about new goods or services of the head office.

It is important to note that Representative Offices cannot

  • Purchase, order or pay goods on behalf of the head office or any activities related to this.
  • Receive purchase orders from any individual or juristic person.
  • Provide after-sales service for installation and maintenance.
  • Provide advice concerning goods not produced or sold by the head office or affiliated companies.
  • Provide sales for any natural or juristic person.
  • Coordinate either sales or purchases for the head office.
  • Provide information concerning goods that have already been sold in Thailand.
  • Act as a middleman or agent between a customer in Thailand and the head office.
  • Coordinate with any organization on behalf of the head office.
  • Represent the head office in contract negotiations or activities.
  • Report information to any company that is not the head office or an affiliated company.

If the representative office does any of the prohibited activities, such as buying and selling goods for the head office, then they will be considered as doing business in Thailand and will most likely end up being liable for tax on all income received from Thailand.

A representative office does not need a Foreign Business License. Thai law requires that certain amounts of capital be sent from the head office into Thailand. The office must be registered with the Department of Business Development and do the same reporting as a corporation.

To register a representative office the DBD needs;

  • Documents regarding the head office and its shareholders,
  • Current office address, employment details, etc.,
  • The business plan, financial forecast, and similar information and any other information the officer may request.

The minimum investment capital must not be less than 25 percent of the estimated average annual operating expenses of the operation calculated over 3 years, but not less than 3 million baht. The first 25 percent of minimum investment must be made within the first 3 months and another 25 percent of minimum investment within the first year. The next 25 percent within the second year and the last 25 percent in the third year.

The appointed representative officer for the head office managing the representative office has needed a work permit in the past, and usually the Labor Department required one Thai employee per work permit. However, the changes in Thai law under Section 4 (8) of the Foreigners’ Working Management Emergency Decree Number 2, published on March 27, 2018 may allow a sole representative officer to work without a work permit;

The new regulation states that among those not requiring a work permit are “representatives of foreign juristic persons obtaining a license to business under the law on foreign business operation”

All representative offices are required to obtain a tax registration number and submit tax returns to the Revenue Department although they are not subject to taxation in Thailand. They are also required to maintain accounts and the financial statements must be audited by a qualified and licensed Thai auditor on a yearly basis. Sunbelt Asia’s accounting team have years of experience in such audits and can assist your representative office in this matter.

Certain types of representative offices do require additional licenses and include finance, security, credit financier offices, and foreign bank offices. Our Bangkok based lawyers will be able to assist you in determining if you need licenses and what licenses you should be applying for.

Regional Office
A Regional Office has similar requirements and restrictions to the Representative Office , it must not earn revenues, and it must have a Foreign Business License. It can provide services to affiliates in the region falling under the auspices of providing the following:

  • Personnel training and development
  • Financial management
  • Marketing and sales promotion planning for regional affiliates
  • Product development
  • Research and development

Other requirements are generally the same, especially those regarding auditing requirements and standards and the minimum capital requirements are the same as for the Representative Office.

A Regional Office is a good idea for an overseas company that is looking to work in South East Asia and wishes to expand its business using Thailand as a base. With its modern infrastructure and experienced personnel, may corporations do set up offices to represent them in Bangkok.

As the business still falls under the Alien Business Act, a work permit may not be required for the manager of the office.

Branch Office
Another option for those with a company overseas but who want to earn income in Thailand is the Branch Office. The Branch Office operates in Thailand like a Thai Limited Company but is wholly owned by the foreign company. It can engage in revenue generating activities such as sales but such a process is generally time consuming and fairly costly.

The Head office must show why a branch office is necessary and would benefit Thailand and apply for a Foreign Business License. All activities must be permitted under Thai law, including those restricted professions. The Branch Office is required to show a certain amount of income and must pay corporate income tax and follow the same accounting procedures required of Thai Limited Companies. Sunbelt Asia’s expert accountants will make sure all your documents are filed on time.

A Branch Office is also required to remit into Thailand a certain amount of investment capital. The minimum investment capital must be greater than 25 percent of the estimated average annual operating expenses of the operation calculated over 3 years, but not less than 3 million baht. It is important to note that the first 25 percent of minimum investment must be made within the first 3 months and another 25 percent of minimum investment within the first year. The next 25 percent within the second year and the last 25 percent in the third year.

There are no directors or shareholders in a Branch Office, but a manager will be required. The manager may not need a work permit as the business falls under the new regulations as it has a Foreign Business License; under Section 4 (8) of the Foreigners’ Working Management Emergency Decree Number 2 (2018).

The Department of Business Development under the Ministry of Commerce requires

  • Details of the business in its home country including directors, license, company name, registered capital, place of business, and objectives.
  • A letter appointing an individual as the authorized signatory for the company and that person’s information including passport, visa, and ID card and house registration if a Thai national and the address and map of the location of the branch office in Thailand.

Also required are

  • The type of business, including the stages of operations
  • Estimate of amount of funds to be spent in Thailand to acquire fixed assets and operational expenses for each year over a period of 3 years.
  • The size of the operations including size of workforce in Thailand, and any plans for the import of foreign technology and transfer of that technology.
  • Working plan for research and development.
  • Intended period of business operation
  • Source of income and estimated revenues.
  • And, as stated above, the benefits this branch can bring to the Thai economy.

As the leading Bangkok law firm our lawyers have experience setting up Branch offices and can assist you in determining your benefit to the country, applying for the Foreign Business License and setting up the Branch Office with all necessary documentation.

Regional Operating Headquarters
Similar to a branch, the Regional Operating Headquarters is registered as a Thai company and can earn profits. It must provide services to its affiliates in a minimum of three countries and can actually apply for BOI promotion status. There is no minimum capital requirement unless the company applies for BOI promotion incentives and then it needs at least 10 million Baht in paid up capital.

The ROH is limited in its scope as well;

Its purpose is to provide management and technical services to enterprises in its network or to its branch offices in Thailand or in another country.

It may also provide support services involving

  • General management, business planning and coordination
  • Sourcing and acquisition of materials
  • Product development
  • Technical support
  • Marketing and promotion of sales
  • Management and training of regional personnel
  • Financial advice
  • Financial and economic analysis
  • Credit management and control

ROH have some benefits in the forms of reduced corporate tax, and reduced income taxes for foreign personnel working in the ROH. They have even greater benefits for those who apply for BOI status.

Board of Investment
The Board of Investment offers tax breaks and other benefits to those who qualify, however, before qualifying for investment promotion status, you must first set up a Thai Limited Company. As Bangkok’s leading law firm, Sunbelt Asia has extensive experience in setting up companies and how to get started in the BOI application process.

After the Thai Limited Company is in place the application process begins. It is detailed and with our lawyers and accountants assisting you, all required information can be filled out.

The application requires

  • A copy of the current certificate of business registration issued within the last 6 months
  • Copy of the current list of shareholders or shareholding distribution report
  • Copy of most recent financial statements (if the company has any)
  • The authorized persons with a Power of Attorney, copies of their ID card or passport
  • Financial projections
  • Estimated number of employees
  • Any environmental impact reports if needed
  • Various other requirements depending on the business

The BOI will schedule an interview with the company founders once the application is made and the company must show a minimum capital investment of one million baht for each project. This does not include working capital and cost of land if you plan to buy land. The debt to equity ratio for newly established projects should not be more than 3 to 1. In knowledge-based services the minimum capital investment is based on the minimum annual salaries as shown in the list of eligible activities.

The BOI restricts activities that are eligible for promotion in regional clusters to the following:

  • Agro-industry and agricultural products
  • Bio-technology
  • Minerals, ceramics and basic metals
  • Light industry
  • Metal products
  • Machinery and transport equipment
  • Electronic and electrical appliances
  • Chemicals, plastics, paper
  • Service and public utilities
  • Technology and innovation development
  • Creative product design and development centers
  • Electronic design
  • Software
  • Cloud services
  • Research and development
  • Biotechnology
  • Engineering design
  • Bio and Medical Industries
  • Creative and Digital Industries

There are also Special Economic Zones or SEZs in Tak, Mukdahan, Sa Kaeo, Songkhla, Trat, Nong Khai, Narathiwat, Chiang Rai, Nakhon Phanom, and Kanchanaburi. Different zones will have different targeted industries but will also have additional incentives for those investing in the SEZs.

It is important to note that BOI promoted companies are not limited in the number of foreign experts they wish to bring into the country either for visas or work permits. Section 26 of the Investment Promotion Act states:

“Subject to the law on working of foreign nationals, only in so far as it is not otherwise provided herein, foreign nationals who are granted permission under section 24 and foreign nationals who are skilled workers or experts and who are permitted to stay in the Kingdom under section 25, shall be granted a work permit for a specific position approved by the Board for the period of permitted stay in the Kingdom.”

Navigating the visa and work permit process can be complicated as they are processed simultaneously, our team of expert lawyers and legal advisors can ensure that all visas and permits are processed as needed while ensuring your BOI application is correct and moves through the system.

Amity Treaty
If you are a US Citizen you may want to consider a Thai –American Amity Company, also more widely known as an Amity company. This treaty, which was signed on May 29, 1966, allows U.S. citizens and businesses the right to establish a company or branch office and to do almost anything a Thai company does with some exceptions.

The Treaty of Amity and Economic Relations between the United States of America and the Kingdom of Thailand allows American companies or American nationals to own a majority of the shares in the company, to have branch offices located in Thailand and to receive national treatment. This means that they may engage in business on the same basis as Thais, are exempt from most of the restrictions on foreign investment imposed by the Alien Business Decree of 1972. However, there are restrictions on Amity companies.

Amity companies may not be involved in

  • Communications
  • Transportation
  • Fiduciary functions
  • Banking involving depository functions
  • Land Ownership, exploitation of land or other natural resources
  • Domestic trade in indigenous agricultural products.

Only the following are eligible

  • Applicant must be registered and established as an American sole proprietorship, partnership, representative office , branch office, joint venture or limited company.
  • For a sole proprietorship, the applicant must be an U.S. citizen either by birth or naturalization.
  • For a partnership, branch office, joint venture, or limited company, a majority of the shareholders and directors must be U.S. citizens either by birth or naturalization.
  • For an U.S. company that is a subsidiary the parent company also must have U.S. citizen majority ownership and management.

If setting up a Limited Company, it is possible to have non-Thai shareholders and directors but the majority of shares must be owned by the American shareholder (51 percent) and Americans must make up a minimum of 50 percent of the directors.

Documents required to set up an Amity company
Sole Proprietorship:  a notarized copy of the owner's passport or birth certificate to prove U.S. citizenship (either by birth or naturalization). This must be certified at the Commercial Service office at the U.S. Embassy in Bangkok.

Thai partnership , Thai branch office, joint venture, or Thai limited Company: the following documents must be notarized by a Notary Public and certified at the Commercial Service

Office at the Embassy in Bangkok:

  • The Articles of Incorporation
  • Bylaws of the Company
  • Affidavit by the Manager or Corporate Officer, stating the name of the company, registration number, date of registration and address of the registered office.
  • Jurisdiction under which the corporation is registered.
  • Name, address, nationality, age and race of each director, number of shares held by each director ID of the signing director.
  • Registered capital, number of shares and value of each and amount of paid up capital.

The process can take up to six weeks as after certification by the Ministry of Commerce the Department of Business Development of the Ministry of Commerce to complete the registration and issue the Foreign Business Certificate.

Under the new regulations issued in Section 4 (8) of the Foreigners’ Working Management Emergency Decree Number 2, published on March 27, 2018 a director of a Thai- Amity company may be able to work without a work permit;

The new regulation states that among those not requiring a work permit are “representatives of foreign juristic persons obtaining a license to business under the law on foreign business operation”

It is important to note, however, that regional Embassies and Consulates seem less informed about these changes and will not issue a multiple entry non-B visa based on ownership of an Amity company, they will still ask for the WP3 receipt. Nor will Immigration based in Thailand issue a one-year visa extension of a non-B visa based on ownership of a Thai Amity company.

It is possible to obtain a non-B visa in the United States but as with many things Immigration related, it can depend on the officer if they issue a multiple entry non-B visa . However, for those with an investment visa or extension based on marriage to a Thai national, this can be an ideal set up since the visa is not dependent on the company and no work permit is required.

Regular accounting laws and requirements must be followed as for a Thai Limited Company with semi-annual reports and audits, income tax payments, and licensing depending on the business.

The lawyers at Sunbelt Asia are extremely experienced in setting up companies under the Amity Treaty and Sunbelt Asia has performed more Amity set-ups than all other firms in Thailand combined.

Summary of options for companies in Thailand

  • Representative Office
    • Limited in scope, cannot earn revenue, must remit in a specified amount of capital, must follow tax reporting laws but does not pay tax.
  • Regional Office
    • Limited in scope of activities, cannot earn revenue, must remit in a specified amount of capital, must follow tax reporting laws but does not pay tax, provides services for affiliates in the region, cannot own land.
  • Branch Office
    • Registered as a Thai company with the same rights and requirements as a Thai company, can earn revenue, must remit in a specified amount of capital, must follow tax reporting laws and does pay tax, cannot own land, must show a reason for the branch office and benefits it brings to Thailand.
  • Regional Operating Headquarters
    • Registered as a Thai company but limited in its scope; provide management and technical services to enterprises in its network in three countries, can earn revenue, must remit in a specified amount of capital, must follow tax reporting laws and does pay tax, cannot own land.
  • BOI
    • Registered as a Thai company before applying for BOI promotions status, once approved receives tax benefits, can own land, must follow tax reporting laws.
  • Amity Company
    • Must be majority owned by an American or Americans, 50 percent of directors must be American, restricted in activities, cannot own or purchase land, registered as a Thai company with many of the same rights, must follow tax reporting laws and pay tax.

For those wondering which option to choose from, we offer a free initial consultation to meet with our lawyers in Bangkok to go over every option and determine which one best suits your needs. Please call 0943387625 to set up an appointment.

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