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incorporation/Open a branch office in Thailand
Set up Branch Office in Thailand
Having a Branch Office in Thailand is a great way for foreign companies to enter the Thai market with a 100% foreign owned vehicle and earn revenue from their derived business.
One major advantage to opening a Branch Office in Thailand is the reduced ratio of 1 Thai employee for every 1 foreign employee hired needed in order to support a work permit.
What is a Branch Office in Thailand?
Under Thai law, a Branch Office is essentially a foreign company that registers its presence in Thailand as a branch.
The Branch Office is not considered as a separate entity from the foreign company, therefore, is treated as the same entity as its parent. The head office is liable for any actions taken by the Branch Office in Thailand.
A Branch Office may generate profit for its parent company. The Foreign Business Act sets out the areas of the Thai Market that a Branch Office can operate in as either a restricted or unrestricted business.
If the business to be operated is not restricted under the Foreign Business Act, all that is required is a commercial registration certificate from the Ministry of Commerce. However, if the business to be operated is considered as a restricted business under the Foreign Business Act, a Foreign Business License must be obtained from the Ministry of Commerce.
• Foreign ownership
100% owned by the parent company (head office).
• Tax Rates
Corporate Income Tax rate of 20%
• Foreign Business License
A Foreign Business License is required for restricted activities.
• Minimum Capital Requirements
2 million Baht over 3 years for unrestricted business. 3 million Baht over 3 years for restricted business.
• Business Restrictions
Restricted to the business for which the Branch Office is registered
• Hiring of Foreign employees
A ratio of 1 Thai employee per foreign employee hired is required to support a Work Permit.
Pricing
FROM
THB 100,000 *
+ 7% VAT
5 business days
(Average time from the moment
we receive complete information from you)
* + Government Fees: THB 8,500
Application handled by a corporate expert.Scope of work
- Prepare and file documents with the Ministry of Commerce to register the Branch Office. This includes collecting and collating the required documents from the parent company and any required information about the Branch Office e.g. a declaration detailing the type of business for which a license application is made..
- Obtaining a Foreign Business License if the planned business activities are considered “restricted”
- Answering questions in relation to the Branch Office setup during this setup process.
- Advising you on the post registration duties to ensure a smooth business operation.
Need more?
Additional services that you may need as well
What is the process for registering a Branch Office?
Be prepared for registering your Branch Office with our comprehensive and free registration checklist.
Be prepared for registering your Branch Office
with our comprehensive and free registration checklist.
Collecting documents and filing the application
Our team of experts will collect, collate and fill in all the required documents, ready for your signature.
TIME LINE
A few days* to collect documents from the parent company and prepare the application. (up to one-month* if English translation required).
Registration of the Branch Office
Our team of experts will file all the documents and application forms with the Ministry of Commerce.
TIME LINE
One day for filing the application.5 business days to receive a 13-digit registration number.
Applying for a Foreign Business Licence
Our team of experts will assist you in applying for a Foreign Business Licence at the Ministry of Commerce. A Foreign Business Licence will be required if the intended business activities are considered to be restricted business under the Foreign Business Act.
TIME LINE
One day for filing the application.5 business days to receive the Foreign Business Licence.
Post-registration requirements
Our team of experts can help you open a bank account and also assist with the timely remittance of the minimum capital requirements.
Our team of experts can also assist with obtaining any Work Permits and Visas which are required.
TIME LINE
2 to 3 weeks* to open a bank account.2 weeks * to obtain a work permit.
Frequently asked questions
Thailand branch office, what it is ?
A branch office in Thailand is a 100% foreign-owned subsidiary of a foreign company. Unlike a representative office, which may only engage in certain non-profit activities (non-trading activities), a branch office may actually be involved in earning profits for the parent company (it is therefore referred to as a trading entity).
What are the advantages of a Branch Office in Thailand?
There are 2 clear advantages to setting up a Branch Office in Thailand. Firstly, the lower requirements needed to obtain a work permit . Secondly, the ability to generate income in Thailand without having to set up a Joint Venture with a local partner.
Branch Offices are able 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).
As the Branch Office is able to generate income in Thailand, it is subject to corporate income tax (20%). The employees are also still subject to the personal income withholding tax on their salaries, this also applies to normal Thai companies as well.
How to obtain a work permit for a Branch Office?
Work Permit for the authorized director of a Branch Office
The foreign authorized director of a Branch Office must obtain a work permit unless the Branch office holds a Foreign Business License. If the Branch Office is considered restricted under the Foreign Business Act, a Foreign Business License will be required anyway. Obtaining a Foreign Business License usually takes between 4 to 6 months and requires a minimum capital investment of 3 million Baht, as opposed to the 2 million Baht required for an unrestricted business.
Work Permit for the director and employees of a Branch Office
To support a work permit for a Branch Office in Thailand, there is a minimum of 3 million Baht and one Thai employee.
Is a Branch Office allowed to generate any income?
A Branch Office may generate profit for the parent company. Branch Offices are governed by Section 17, List 3 (21) other business services of the Foreign Business Act B.E. 2542. The Foreign Business Act sets out the areas of the Thai market that a Branch Office can operate in as either a restricted or unrestricted business.
If the intended business activities are not restricted under the Foreign Business Act, all that is required is a commercial registration certificate from the Ministry of Commerce.
However, if the intended business activities are considered to be restricted business under the Foreign Business Act, a Foreign Business Licence must be obtained from the Ministry of Commerce.
As services activities are restricted under the FBA, a FBL will usually be required to open a Branch office.
What is the minimum investment?
A minimum capital of 2 million Baht for an unrestricted business and 3 million Baht for a restricted business is required. The minimum installments are as follows:
- No Less than 25% of 2 million Baht (3 million for restricted) must be transferred into the country within the first 3 months after approval.
- During the same year, at least 50% of the capital must be transferred.
- The remainder of the 25% of the capital must be transferred each year after that.
To hire a foreign employee, 3 million Baht must be fully transferred into the Thai bank account of the Branch Office and one Thai employee is required to support the work permit.
To hire a second foreigner, another 3 million Baht (a total of 6 million Baht) will have to be transferred and so on.
Branch Office vs Representative Office
Both Branch Offices and Representative Offices have the ratio of 1 Thai employee per foreign employee. However, unlike the Representative Office, a Branch Office is not restricted in the activities it can undertake, and can also earn revenue.
| REPRESENTATIVE OFFICE | BRANCH OFFICE | |
| Liability | No separate liability from the head office | No separate liability from the head office |
| Foreign ownership | Up to 100% | Up to 100% |
| Thai to foreign employee ratio | 1:1 | 1:1 |
| 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. | Able to conduct various activities regardless of whether or not they generate any income. |
| Reporting and audits | Annual accounting audit | Annual accounting audit |
| Timeline | 1 week | Unrestricted business – 1 Week Restricted business – 4 to 6 months |
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Question Before You Begin? *
Question Before You Begin? *
Speak to our expert by scheduling a consultation on how to set up a Branch Office in Thailand with Belaws.
(*) This Conversation is intended to provide basic answers to questions you may have about the Branch Office. But it is not a Lawyer’s Consultation.
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