Special provision has been made within Thai law for a foreign company(being a company not formed under Thai law and/or without majority Thai ownership) to establish what is known as a “representative office.” This is often the quickest and easiest way for a foreign company to establish a physical presence in Thailand.
As well as creating a “beachhead,” the creation of a representative office has the added benefit of facilitating the lodgement of applications for business visas and work permits for foreign directors or staff.
There are, however, restrictions on the nature of activities that a foreign company may undertake in such an office.
A representative office may only engage in certain non-revenue-raising activities such as:
- Searching for local sources of goods or services for its head office, inspecting and controlling the quality and quantity of goods procured by its head office
- Providing advice in various fields relating to products directly sold by its head office to local distributors or consumers
- Disseminating information about new products and services
- Reporting to its head office on local business developments and activities
The minimum capital injection required to establish a representative office is currently 3m THB. These funds are transferred into the country at specified intervals, and must subsequently remain in Thailand. It is intended that this capital be used for operational expenses such as rent and wages.