A representative office is a great way for a foreign company to set up a wholly owned entity and explore the Cambodian market.
Representative offices are limited in the business activities they can undertake and cannot engage in any taxable activities.
What is a Representative Office in Cambodia?
Representative offices are permitted to perform the following activities:
- Contacting and introducing customers to the parent company
- Researching commercial information and providing information to the parent company
- Conducting market research
- Promoting and exhibiting goods at trade fairs
- Renting an office and employing local staff
- Entering into contracts with local customers on behalf of the parent company
• Foreign ownership
100% foreign ownership
• Minimum Capital Requirements
• Business Activities
Restricted business activities.
• Business Restrictions
Cannot earn revenue
• Legal status of a Representative Office
Same legal entity as their parent company
• Hiring of Foreign employees
It is possible to hire foreign staff.
USD 1,650 *
+ 10% VAT
About 20 business days
(Average time from the moment
we receive complete information from you)
* Official Fee:
USD 1,350 (USD 650 Ministry of Commerce & USD 560 USD Tax Registration)
Scope of work
- Review and filing of the applications by a qualiﬁed corporate expert ﬂuent in Khmer and English.
- Preparing the constitutional documents for registering a Representative Office (in English and Khmer).
- Answering questions in relation to the Representative Office setup during this setup process.
- Advising you on the post registration duties to ensure a smooth business operation.
Additional services that you may need
- Monthly Accounting and Tax filings From USD 100
What is the process for registering a Representative Office?
Collecting documents and filing the application
Our team of experts will collect, collate and fill in all the required documents, ready for your signature.
A few days to collect documents from the parties and prepare the application.
Registration of the Representative Office
Our team of experts will file all the documents and application forms with the relevant Government Departments; Cambodia Data Exchange (CamDX), General Department of Taxation (GDT) and Ministry of Labour and Vocational Training (MLVT).
- Registering the representative with the DamDX.
- Tax registration with the GDT (General Department of Taxation).
- Register the representative office with the National Social Security Fund registration at MLVT.
The whole process of registering a limited company usually takes around 30 days
Our experts can assist with you the next necessary steps to start your business:
- Work Permit for foreign employees
- Open a corporate bank account
Frequently asked questions
What is a Representative Office?
Under Thai law, a Representative Office is an office established by a foreign company that is treated as the same entity of its parent company (this is not a separate entity from the head office unlike a limited company). As a consequence, the head office is liable for the action of the Representative Office in Thailand.
What are the advantages of a Representative Office in Thailand?
The main advantages of setting up a Representative Office in Thailand is the possibility to support one work permit per foreign employee with only one Thai employee (the ratio for a limited company is 4 Thai employees per foreign employee except if the company has obtained a promotion from the Board of Investment). The maximum number of foreign employees is usually 2 (it is sometimes possible to obtain several more work permits depending on the activity of the Representative Office).
As the Representative Office cannot generate income in Thailand, it is not subject to corporate income tax. However, the employees are still subject to the personal income withholding tax on their salaries.
To cope with the inability of the Representative Office to enter into commercial agreements and generate income, it is a common practice for foreign companies to set up an invoicing company in Singapore or a limited company in Thailand with a local partner to support its business activities in Thailand. Our market entry expert will advise you on the best entry strategy.
How to obtain a work permit for a Representative Office?
A distinction between the foreign director of the Representative Office and the other foreign employees of the Representative Office must be made following the Due to the abolition of the requirement to obtain a Foreign Business License a distinction must be made between the foreign director of the Representative Office and the other foreign employees.
Work Permit for the authorized director of a Representative Office
The foreign authorized director of a Representative Office must obtain a work permit unless the Representative Office holds a Foreign Business License. The process to obtain a Foreign Business License usually takes 4 to 6 months and requires a minimum investment of 3 Million Baht, which is higher than the 2 Million Baht required to obtain a work permit without a Foreign Business License.
Work Permit for the director and employees of a Representative Office
To support a Work Permit for a Representative Office in Thailand the following is required:
- A minimum Capital Investment of 2 Million Baht required
- One Thai employee must be hired.
Please note, that above only applies to 1 Work Permit. Each additional Work Permit required the above requirements as well i.e. 2 Work Permits = 4 Million THB and 2 Thai Employees.
Is a Representative Office allowed to generate any income?
A Representative Office is not allowed to generate any income nor enter into commercial agreements (on its own account or on behalf of the parent company). It can only sign the necessary documents for its operation in Thailand. The expenses of the Representative Office must be fully financed by its parent company.
What are the minimum investment requirements?
A minimum investment of 2 million Baht must be made within 3 years with minimum installments as follows:
- 25% within the first 3 months of registration;
- 25% within the first year;
- 25% within the second year; and
- 25% within the third year.
To hire a foreign employee, the 2 million Baht must be fully transferred into the Thai bank account of the Representative Office and one Thai employee is required to support the work permit. To hire a second foreigner, another 2 million Baht (a total of 4 million Baht) will have to be transferred.
Representative Office vs Thai Limited Company?
A Representative Office has the ratio of 1 Thai employee per foreign employee but its activities are limited and it cannot generate income while a Thai Limited Company with a local partner can carry out most business activities without any specific restrictions. The key differences are highlighted below:
|REPRESENTATIVE OFFICE||THAI LIMITED COMPANY|
|Liability||No separate liability from the head office||Liability of the shareholders limited to the amount invested|
|Foreign ownership||Up to 100%||Limited to less than 50% in most activities|
|Thai to foreign employee ratio||1:1||4:1|
|Corporate income tax rate||No corporate income tax||20%|
|Business restrictions||Restricted to the business for which investment promotion is granted; Limited to 5 activities. Cannot generate income.||No specific restriction if more than 50% of the capital is held by Thais shareholders|
|Reporting and audits||Annual accounting audit||Annual accounting audit|
|Timeline||1 week||1 week|
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Question Before You Begin? *
(*) This Conversation is intended to provide basic answers to questions you may have about the Representative Office. But it is not a Lawyer’s Consultation.
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