🏢 Setting Up a Branch Office in Thailand: A Legal Guide for Foreign Companies 2025

🏢 Setting Up a Branch Office in Thailand: A Legal Guide for Foreign Companies 2025

Why set up a branch office in Thailand

Expanding via a branch office lets foreign companies maintain full control without forming a separate legal entity. But under Thai law it carries legal obligations and liability, and may require a Foreign Business License (FBL) for restricted activities .

What is a branch office?

A branch office operates in Thailand under the foreign parent company’s name and identity. It can earn revenue but is not a separate juristic entity under Thai law.

Who should consider a branch office?

Ideal for: technical consultants, firms handling government contracts, and companies wishing to retain direct corporate control. Not ideal for: SMEs wanting limited liability or significant autonomy.

🏛 Legal Framework

• Subject to Foreign Business Act B.E. 2542, especially Section 17 for FBL .

• Must apply for FBL before engaging in activities listed in Schedule 2 or 3 of the Act.

📌 Branch office key characteristics

Feature	Description
Legal status	Extension of head office—not separate entity
Liability	Parent company fully liable
Taxation	Taxed as a foreign entity
Ownership	100% by foreign parent
Minimum capital	THB 3 million over three years (per FBA rules)
Reporting	FBL/BOI/DBD annual compliance and filings

🧭 Step-by-Step Setup Process

1. Appoint Authorized Branch Manager Must be Thai-resident or hold a valid Non-B visa if foreign.

2. Tax ID & Registration Apply within 60 days of starting operations.

3. FBL Application Submit to Ministry of Commerce with documents: Articles, head office affidavit, objectives, manager CV, office address, financial statements.

4. Capital Injection Inject at least 25% of THB 3 million within three months; balance within three years.

5. Bank Account Setup Used for capital, operations, and tax.

6. VAT & Social Security Registration Required if turnover exceeds THB 1.8 million or hiring employees under Social Security Act B.E. 2533.

Timeframe: 3–6 months, depending on completeness and approvals.

👥 Employment & Visas

• Can employ foreign workers; must sponsor Non-Immigrant “B” Visa and work permits.

• Thai-to-foreigner ratio 4:1 applies unless BOI/exemption in place.

💰 Tax & Accounting Obligations

Tax / Compliance	Rate / Requirement
Corporate Income Tax	20% on net profit
Withholding Tax	Applicable on repatriated profits
VAT	7% when applicable
Financial Audit	Annual audited statements by Thai CPA
Transfer Pricing Rule	Must follow OECD-aligned rules

Note: Withholding tax on profit remittance may reduce to 10% under applicable Double Tax Agreement.

🔁 Renewal & Ongoing Obligations

• Annual corporate income tax filing

• Social Security reporting monthly

• Annual audited financial statements

• FBL compliance review yearly

• Capital injection report over 3 years

⚠️ Key Risks of a Branch Structure

• Unlimited liability—parent company exposed to all Thai liabilities

• Reputational impact—Thai activities affect global image

• Complex regulation—FBL is reviewed case-by-case

• No corporate buffer—unlike Thai limited companies

🛠 Alternative Structures Considered

• Thai Limited Company (Ltd.) — protects liability with foreign shareholding up to 49% (or higher with BOI/FBL)

• Representative Office — ideal for non-revenue activities

• BOI-promoted company — offers special benefits, simplified FBL requirements

🤝 How GENTLE LAW IBL Supports You

As a global legal team with deep knowledge of Thai law and modern SEO, we support:

• Pre-feasibility assessments

• Step-by-step FBL application and follow-up

• Capital planning and accounting setup

• Visa & work permit assistance

• Full compliance representation

Our approach ensures your branch office launch is legally sound, efficient, and strategically aligned with business goals.

Final Recommendation

A branch office grants direct access to the Thai market, but carries significant responsibility and legal risk. Using GENTLE LAW IBL gives you a seasoned partner to manage complexity—so you can focus on growth.

📩 Contact us today at Inbox for a free legal consultation.