A Thailand representative office ("rep office") of a foreign company is not subject to income tax provided that the services rendered by the rep office are only provided to and for use by its head office. However, please be aware the Ministry of Commerce scrutinizes rep office applications very closely now due to past abuse of its tax exempt status.
A rep office must be registered with the Thailand Ministry of Commerce (MOC) as such and is restricted to the following types of activities:
A rep office of a foreign company established under these regulations is not subject to taxation provided that the services rendered by the Thailand office are solely provided to its head office and are within those described above. The rep office will be allowed a reimbursement of all expenses incurred on behalf of its head office. If the rep office provides services to a non-head office, for which it directly or indirectly derived income for such services, then it can be deemed to be carrying on business in Thailand and subject to Thai taxes.
The rep office will be issued a business license under the Alien Business Law. The minimum capital required is 3 million Baht or not less than 25% of the average amount per year of the expenditure estimation for carrying on business for 3 years. 25% of the minimum capital must be brought into Thailand within the first 3 months and another 25% within 1 year. The remainder of the capital must be brought into Thailand in an amount not less than 25% each year thereafter. The rep office must register its remittances received with the Bank of Thailand as proof of meeting the above requirement.
Work permits issued by the Thailand Labor Department will be required for any foreign personnel. A rep office will be allowed up to two work permits. Receipt of a work permit is conditioned upon the remittance of 3 million Baht per work permit and there must be 1 Thai employee per 1 foreign employee. A non immigrant B visa issued by the Thailand Immigration Department will also be required in conjunction with the work permit.
A rep office is required to prepare and submit financial statements to the MOC within 5 months from the end of each fiscal period. Further, the MOC may request an annual report and summary of operations of the rep office each year.
Our Thailand rep office registration service includes the following: