A Representative Office (RO) in Thailand is a legal business structure that allows foreign companies to establish a non-revenue-generating presence in the country. It serves as a liaison office to facilitate market research, quality control, and business coordination. However, it cannot engage in direct trading, sales, or profit-generating activities.
Many international companies set up a Representative Office in Thailand to explore business opportunities, oversee suppliers, and provide customer support before committing to a full-scale investment.
This guide explains the purpose, legal framework, registration process, benefits, and limitations of a Representative Office in Thailand.
1. What is a Representative Office?
A Representative Office is a business structure wholly owned by a foreign company. It is not allowed to generate revenue but can perform certain non-commercial activities.
✔ Acts as a liaison between the parent company and Thai businesses.
✔ Cannot sign contracts or issue invoices in Thailand.
✔ Must be fully funded by the parent company.
✔ Suitable for market research, business coordination, and product quality control.
💡 Example: A Japanese electronics company establishes a Representative Office in Bangkok to oversee quality control of its suppliers in Thailand.
2. Activities Allowed for a Representative Office in Thailand
Thai law permits a Representative Office to perform the following five (5) activities:
1️⃣ Sourcing and reporting business information to the parent company.
2️⃣ Promoting exports from Thailand to foreign markets.
3️⃣ Assisting in technical support for products sold by the parent company.
4️⃣ Inspecting and controlling product quality before shipment.
5️⃣ Liaising between the parent company and Thai businesses for operations support.
🔴 Important: The Representative Office cannot generate income, trade, or provide paid services.
3. Advantages of Establishing a Representative Office
✔ Low Legal and Financial Risks – Since it cannot engage in revenue-generating activities, financial and legal risks are minimized.
✔ Easy Market Entry – Allows foreign companies to study business opportunities before making major investments.
✔ 100% Foreign Ownership Allowed – Unlike other business structures, an RO does not require Thai shareholders.
✔ No Corporate Income Tax (CIT) – Since it does not generate income, there are no corporate taxes.
✔ Lower Operating Costs – Compared to a full subsidiary, running an RO is more cost-effective.
💡 Tip: A Representative Office is ideal for companies that want to test the Thai market without financial risk.
4. Disadvantages of a Representative Office
❌ Cannot Engage in Profit-Generating Activities – An RO is strictly limited to non-commercial operations.
❌ 100% Funding from Parent Company – The parent company must provide all operational funds.
❌ Limited Business Scope – The Thai government monitors RO activities to ensure compliance.
❌ Requires Licensing from the Department of Business Development (DBD) – Additional paperwork and approval are needed.
💡 Tip: If you plan to sell products or provide paid services, consider setting up a Thai Limited Company instead.
5. Requirements for Setting Up a Representative Office
To establish an RO in Thailand, the parent company must meet the following requirements:
✔ The parent company must be a legally registered foreign business.
✔ The RO’s activities must be within the five permitted activities.
✔ The parent company must fund all operating expenses of the RO.
✔ At least one foreign or Thai director (Chief of RO) must be appointed.
💡 Tip: A strong business justification is required when applying for an RO license.
6. Registration Process for a Representative Office in Thailand
Setting up an RO involves several legal steps and approvals.
Step 1: Gather Required Documents
The following documents are needed:
✔ Application form (DBD form for Representative Office)
✔ Parent company registration certificate (notarized)
✔ Company affidavit (company name, business scope, and ownership details)
✔ Letter of appointment for the Chief of Representative Office
✔ Business operation plan for the first three years
✔ Power of Attorney (if using a legal representative)
✔ Financial statements of the parent company
💡 Tip: All foreign documents must be translated into Thai and notarized.
Step 2: Submit Application to the Department of Business Development (DBD)
✔ The application is submitted to the DBD under the Ministry of Commerce.
✔ The approval process takes 3-4 weeks.
✔ Once approved, the DBD issues a Business License for the RO.
Step 3: Register for a Tax Identification Number (TIN)
✔ Even though an RO is not taxable, it must obtain a Tax ID from the Revenue Department.
✔ The TIN is used for employee taxes and social security registration.
Step 4: Open a Corporate Bank Account
✔ A Thai bank account is necessary for managing business expenses and payroll.
✔ The Chief of the Representative Office can legally sign on behalf of the RO.
Step 5: Apply for Work Permits (if hiring foreign staff)
✔ The Chief of RO and foreign employees must obtain work permits and non-immigrant B visas.
✔ The RO must comply with Thailand’s foreign employment laws (at least four Thai employees per foreign worker).
💡 Tip: Work permits are issued by the Department of Employment under the Ministry of Labor.
7. Costs and Taxes for a Representative Office
🔴 Setup Costs: THB 20,000 – THB 50,000 (legal and government fees).
🔴 Annual Operating Costs: THB 500,000 – THB 1,500,000 (rent, salaries, and expenses).
Taxation for Representative Offices
✔ No Corporate Income Tax (CIT) – Since an RO does not earn revenue, it is exempt from corporate tax.
✔ Withholding Tax (WHT) – The RO must withhold tax on salaries paid to employees.
✔ Value-Added Tax (VAT) – An RO is not required to register for VAT unless it imports goods.
💡 Tip: Even if the RO has no taxable income, it must file annual financial reports with the Thai Revenue Department.
8. Alternatives to a Representative Office
If your business requires revenue-generating activities, consider these alternatives:
✔ Thai Limited Company – Allows 100% business activities, including sales and services.
✔ Branch Office – Can conduct business but must pay Thai taxes.
✔ BOI-Promoted Company – If eligible, provides tax incentives and foreign ownership benefits.
💡 Tip: If you need full business operations in Thailand, a Thai Limited Company is the best option.
9. Conclusion
A Representative Office in Thailand is an excellent choice for foreign companies looking to establish a presence without engaging in profit-making activities.
✔ Key Takeaways:
- An RO is 100% foreign-owned and serves as a liaison office.
- It can conduct market research, quality control, and business coordination.
- It cannot generate revenue, trade, or issue invoices.
- The parent company must fully fund all RO expenses.
- The setup process includes DBD approval, tax registration, and work permits.
- No corporate income tax applies, but payroll taxes must be filed.