Setting Up a Branch Office in Thailand
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Overview
A Branch Office in Thailand is an extension of your foreign business, allowing you to operate and generate income within the Thai market under your existing company’s name and structure. Unlike a representative office, a branch office can engage in commercial activities, invoice customers, and earn revenue. However, it remains legally dependent on the parent company, meaning liabilities incurred locally extend directly to the foreign parent company.
Establishing a branch office is ideal for foreign companies looking to explore or expand their market presence in Thailand while maintaining their brand identity and centralized control.
Essential Requirements for Establishing a Branch Office in Thailand
To set up a branch office in Thailand, the foreign parent company must meet several regulatory requirements:
Minimum Capital Requirement:
- At least THB 3 million is required, transferred from abroad.
- An additional THB 3 million per activity for specific regulated businesses.
Registration
Process:
- Obtain approval from the Foreign Business Committee if applicable.
- Register with the Department of Business Development (DBD), Ministry of
Documents
Required:
- Certified copy of the parent company’s incorporation documents.
- Company profile, financial statements, and director list.
- Letter of appointment for the local branch manager.
- Proof of address for the branch office in Thailand.
- Power of Attorney for representative handling the setup.
Taxation and
Compliance:
- Branch offices must comply with Thai tax laws, including corporate income tax (CIT), VAT, and withholding taxes.
- Regular financial reporting and auditing according to Thai accounting standards are mandatory.
Representative Office vs. Branch Office: What’s the Difference?
Understanding the distinction between a representative office and a branch office is crucial when considering your company’s expansion strategy in Thailand.
Feature | Representative Office | Branch Office |
|---|---|---|
Commercial Activities | Not allowed; only non-income generating activities such as market research, promotion, and support | Allowed; can generate income and invoice customers |
Taxation | Not subject to corporate income tax (CIT), but required to submit tax returns | Subject to corporate income tax and VAT compliance |
Legal Liability | Liability directly extends to the foreign parent company | Liability directly extends to the foreign parent company |
Capital Requirement | Minimum THB 2 million (non-revenue generating) | Minimum THB 3 million (revenue generating) |
How Act & Align Advisor Can Help
At Act & Align Advisor, we specialize in guiding foreign businesses through every step of establishing a Branch Office in Thailand. Our comprehensive services include:
- Expert Consultation: Thorough evaluation of your business objectives and strategic advice tailored to your specific needs.
- Documentation Assistance: Preparation and submission of all required documents, ensuring full compliance and accuracy.
- Legal Support: Liaising with government agencies and obtaining necessary approvals swiftly and efficiently.
- Financial and Accounting Services: Assistance with capital transfers, tax registration, accounting setup, and ongoing financial compliance.
- Local Representation: Provision of qualified local branch managers or representatives if needed.
Our goal is to simplify the complexities of Thai business regulations, allowing you to focus on expanding your business operations successfully.
Ready to Set Up Your Branch Office in Thailand?
Connect with Act & Align Advisor today for a consultation and take the first step towards successful business expansion in Thailand.
Act & Align Advisor – Your Key Partner for Business Success.
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to get personalized guidance and take the first steps toward setting up your entity. We are gladly to support.