Currently, a Representative Office in Thailand of a foreign company (“Rep Office”) is no longer required to obtain a foreign business license (“FBL”) from the Department of Business Development.
Nevertheless, the Rep Office is still required to carry out only the non-taxable activities permitted under the Thai Foreign Business Act (“FBA”) and receive no income in Thailand.
The Rep Office’s activities must be limited to only the following activities:
For the FBA purpose, a Rep Office must have a minimum capital of Baht two million even though the FBL is not required.
Although the FBL is no longer required for a Rep Office in Thailand, a Rep Office is still subject to other Thai legal and tax compliance including a duty to file required tax returns in Thailand.
For Thai tax purpose, each of the Rep Office’s proposed activities should also be carefully reviewed as to whether they could give rise to any Thai tax implications for the foreign head office and/or any other companies related to the Rep Office’s activities. This is regardless of whether the proposed activities are permitted under the FBA.
We welcome any opportunity to discuss the relevance of the above matters to your business including providing advice on the Rep Office both before and after its registration in Thailand.
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