Although the process of registering a Branch Office in Thailand is not as straightforward as it sounds due to the several restrictions imposed by the Foreign Business Act, the professional lawyers at Umpire Legal are here to simplify the requirements and expertly guide you through the application process.
Overview of Branch Office in Thailand
- Same entity as the foreign company
- Must obtain Foreign Business License
- Capital requirements – 3 million THB+
- Allowed to earn income in Thailand
- Tax compliance same as a foreign-owned company registered in Thailand
A Branch Office is fundamentally a foreign company that registers its presence in Thailand in the form of a branch. The branch in Thailand is not considered as a separate entity from the foreign company, but it is merely an extension of its foreign head office. Therefore, the branch will not have separate shareholders or Bylaws from those of the head office. The activities of the branch may differ from those of the foreign head office.
The Branch Office in Thailand is required to appoint an individual or local representative to act as the manager of the branch on its behalf. The local representative has the same rights and duties as that of a director in a limited company in Thailand, for overseeing the day-to-day operations and representing the office in Thailand.
The application process for registering a Branch Office in Thailand requires the company documents of the foreign head office to be notarized, translated to Thai language, and a complete business plan to be provided for the intended activities to be carried out in Thailand. Please find here a list of documents which should be prepared for this application with the Ministry of Commerce:
- A copy of a certificate or evidence of juristic person status containing particulars of the company’s name, registered capital, business objectives, official place of business, list of members of the board of directors and authorized signatories of the juristic person
- A letter of appointment of an individual in Thailand (may be a foreigner or Thai national) issued by the authorized signatory of the foreign juristic person for appointment as the agent to be in charge of the operations of the branch in Thailand on behalf of the juristic person
- A copy of the appointed individual’s passport, identification document for foreigners or identification card as well as house registration or certificate of residence in Thailand, or evidence of permission to enter Thailand for temporary stay under the immigration laws
- A declaration by the foreign juristic person certifying that the applicant, directors, managers and appointed individual satisfy the qualifications and do not possess any prohibited characteristics under section 16 of the Foreign Business Act, B.E. 2542 (1999)
- A map indicating the approximate location of the place of business operation in Thailand
- A power of attorney in the case where another person has been authorized to act on the applicants behalf for establishment of the Branch Office in Thailand
- Other evidence or documents, such as confirmation from the head office of the salary and other remuneration of the person in charge of the operations in Thailand, the head office’s annual audited financial report for the last three years, and so forth
- A declaration detailing the type of business for which a license application is made to establish the branch:
- The type of business for which the application is made, including the stages of operations
- An estimate of the expenditure as regards the amount of funds which the applicant will expend in Thailand for the acquisition of fixed assets and for the operational expenses of the business in each year over a period of three years or over the actual period of business operation in the case where the business was operated for less than three years
- The size of the operations
- The size of workforce in Thailand employed by the applicant (e) A plan for the import of foreign technology and the transfer of technology
- A plan for research and development, with an explanation of the working plan for the proposed research and development
- The intended period of business operation
- The overall benefit to the economy which Thailand is expected to receive from the business operation
- The source of income and estimated revenue to be derived from the project of the Branch Office in Thailand
The process of registering a Branch Office in Thailand is slightly more complex than registering a limited company due to the lengthy duration and cost of incorporation, but several multinational companies may choose to proceed with this option. It should be noted that since the branch is a foreign entity, its activities must not fall under the Foreign Business Act’s lists of prohibited activities. The minimum capital required for establishment is at 3 million THB, and there is also a 3 million THB investment required for every business activity which the Branch Office will operate in Thailand. Once registered, the Branch Office will also receive a Foreign Business License to operate its business in Thailand.
Unlike the Representative Office, a Branch Office is allowed to earn income in Thailand. The general legal and tax related compliance for a Branch Office in Thailand are the same as that of a foreign-owned company registered in Thailand.