Setting Up a Representative Office in Thailand: Legal Guide for Foreign Companies

Setting Up a Representative Office in Thailand: Legal Guide for Foreign Companies

Setting Up a Representative Office in Thailand: Legal Guide for Foreign Companies

Foreign SMEs and multinational corporations often consider Thailand as a gateway to Southeast Asia. For those not ready to establish a full-scale legal entity, setting up a Representative Office in Thailand offers a strategic, low-risk entry point.

This legal guide by GENTLE LAW IBL outlines everything you need to know to stay compliant with Thai regulations while using a Representative Office to support your international expansion.

What This Guide Covers

• What a Representative Office in Thailand can and cannot do

• Legal eligibility and registration requirements

• Step-by-step setup and compliance process

• Tax and visa obligations

• When to upgrade to a Branch Office or Limited Company

• How GENTLE LAW IBL can help you avoid common pitfalls

What Is a Representative Office in Thailand?

A Representative Office in Thailand acts as an extension of a foreign company, operating under strict non-revenue-generating conditions. It is not a separate juristic person, and the parent company abroad remains fully liable for its actions.

Permitted Activities

• Market research and feasibility studies

• Product quality control and supplier coordination

• After-sales support, training, and service

• Public relations and promotional efforts

• Acting as a liaison between the foreign headquarters and local businesses

Prohibited Activities

• Engaging in any income-generating business

• Issuing tax invoices or collecting fees from Thai clients

• Signing contracts with Thai entities on behalf of the parent company

These restrictions are strictly enforced under the Foreign Business Act B.E. 2542 (1999).

Eligibility & Legal Limitations

Aspect	Representative Office in Thailand
Juristic Status	Not a separate legal entity
Revenue Activities	❌ Prohibited under Thai law
Local Contracting Power	❌ Cannot sign contracts with Thai customers
Tax Registration	Must obtain Withholding Tax ID for employee salary tax
Work Permits	Required for each foreign staff (Non-B Visa + Work Permit)
License Validity	1-year license, renewable up to 3 years (non-BOI route)
Reporting Obligation	Submit annual operational report to DBD or BOI (if applicable)

⚖️ Legal Reference: Revenue Department and BOI regulations (Foreign Business Act B.E. 2542)

How to Set Up a Representative Office in Thailand

To establish a Representative Office in Thailand, you must follow a clear regulatory process outlined by the Department of Business Development (DBD):

Step 1: Reserve Office Name

File for a name reservation with the DBD using the Thai legal entity registration system.

Step 2: Prepare Legal Documentation

• Certificate of Incorporation and company Articles from head office

• Board resolution authorizing RO setup and appointing local manager

• Power of Attorney for representative

• Proof of office lease in Thailand

• Business scope and staffing plan

Step 3: Submit Application to DBD

Submit the application with supporting documents and pay government fees (approx. THB 2,000–5,000).

Step 4: Tax and Customs Notifications

• Apply for Withholding Tax ID (if hiring expats)

• Notify Customs if demonstration or promotional goods are imported

Step 5: Apply for Visas and Work Permits

Each foreign staff member must obtain a Non-B Visa and Work Permit.

💼 Note: A Representative Office must maintain a minimum capital of THB 2 million per foreigner and a 4:1 Thai-to-foreigner ratio unless BOI-promoted.

Ongoing Compliance Obligations

To maintain its license and legal standing, a Representative Office in Thailand must:

• Submit an annual operations report to DBD or BOI

• Renew the office lease to match license term

• Renew visas and work permits in accordance with Immigration Bureau timelines

• Refrain from income-generating activities

❌ Violation of RO conditions can result in penalties, license suspension, or revocation by Thai authorities.

When to Upgrade: From Representative Office to Branch or Limited Company

While a Representative Office in Thailand is a practical starting point, it is not a long-term solution if you:

• Intend to sign client contracts

• Plan to collect revenue or invoice customers

• Require operational scalability within Thailand

In such cases, GENTLE LAW IBL can advise you on converting to:

• A Branch Office (not a separate entity but allowed to earn income)

• A Thai Limited Company (preferred for full commercial operations)

We provide legal structuring and conversion support with zero disruption to ongoing operations.

How GENTLE LAW IBL Can Support Your RO Setup

Our team offers end-to-end legal and compliance support for foreign SMEs setting up a Representative Office in Thailand:

• Strategic feasibility comparison: RO vs Branch vs Ltd.

• Drafting, notarizing, and filing all required legal documents

• Liaising with DBD, Revenue Department, and BOI

• Immigration support for Non-B Visas and Work Permits

• Post-establishment compliance tracking and annual filing

🛡️ With deep legal knowledge and practical insight, we ensure your structure aligns with both your business model and Thailand’s legal framework.

Final Thoughts: Is a Representative Office in Thailand Right for You?

A Representative Office in Thailand is ideal for foreign companies wishing to:

• Explore the Thai market

• Coordinate with local suppliers

• Conduct promotional and liaison activities without revenue

However, if you anticipate revenue-generating operations, it’s essential to plan your upgrade pathway early.

📩 Ready to establish your Representative Office in Thailand or plan your next step?

Contact GENTLE LAW IBL for tailored legal advice that aligns with your strategic goals: https://www.gentlelawibl.com