Representative Office in Thailand

Foreign companies looking to establish a presence in Thailand for marketing or business support purposes can set up a Representative Office. While a Representative Office is not allowed to generate revenue directly, it plays a crucial role in supporting the operations of the head office. The office is entirely funded by the parent company and cannot receive income from clients or invoices.

What a Representative Office Can Do

A Representative Office in Thailand is limited to five specific activities:

1. Business Reporting: The office can gather and report on business activities occurring in Thailand, providing valuable insights to help the head office grow and expand.

2. Product Information: While it cannot sell products directly, the Representative Office can provide information to customers and distributors about the company's offerings.

3. Sourcing Goods and Services: The office can source products and services for shipment back to the headquarters, allowing businesses to save on procurement costs.

4. Quality Control: The office can perform inspections, ensuring the quality and quantity of goods that the headquarters manufactures or sources from Thailand.

5. Marketing New Products/Services: The Representative Office can introduce and market new products or services to the Thai market, helping the company build a presence before fully launching.

These are the only activities legally allowed for a Representative Office. Any attempt to expand beyond these functions could jeopardize its operating license.

Advantages of a Representative Office

Setting up a Representative Office offers a major advantage for companies looking to enter the Thai market or manage products sourced from Thailand, without the need to establish a fully-fledged business. Unlike a limited company, a Representative Office does not require Thai majority ownership (51%). This makes it a convenient option for foreign companies seeking to establish a foothold in Thailand without the complexities of full company formation.

Additionally, a Representative Office is not subject to corporate income tax, as it does not generate any revenue. It also doesn’t have to adhere to the same staffing requirements as a limited company, such as hiring Thai nationals for each foreign employee.

Challenges of a Representative Office

While the Representative Office structure is beneficial for many companies, it does come with limitations. The primary drawback is its restriction on earning revenue. If a company later identifies opportunities to generate income in Thailand, it will need to establish a separate business entity to take advantage of these prospects.

Moreover, setting up a Representative Office can be a complex process, especially for foreign business owners who may struggle with the necessary paperwork and regulations. Fortunately, Lotus Ledger can handle all the logistics and legal requirements for you, ensuring a smooth setup.

Legal Requirements

To set up a Representative Office in Thailand, certain legal requirements must be met. The office is restricted from engaging in any income-generating activities. Additionally, the office must appoint a local manager (representative) and submit the appropriate paperwork for approval.

Timeline for Setting Up a Representative Office

Setting up a Representative Office in Thailand can take as little as one week, provided the necessary steps are followed. The process begins with the director of the parent company issuing a Letter of Appointment for a local representative. The representative will then sign and submit the required documents, which are in Thai, before submitting them in person. After submission, the office can typically receive its operating license within a few days.

If you decide to close the office later, the process is relatively straightforward, often taking as little as 60 days to complete. A Representative Office does not require the same closure process as other types of businesses in Thailand.

If you're ready to set up a Representative Office in Thailand, Lotus Ledger can handle everything for you—from paperwork to legal compliance. Let us take care of the details so you can focus on growing your business.

Contact us to get you started.