Thailand has positioned itself as one of Southeast Asia’s top business and investment hubs. For foreign companies seeking to explore the Thai market without engaging in direct commercial activities, setting up a Representative Office (Rep Office) offers a low-risk and strategic entry point. While a Rep Office cannot generate income, it serves as a liaison between the head office and Thai stakeholders, providing market insight, coordination, and support.
This article explains everything you need to know about establishing a Representative Office in Thailand—its functions, benefits, limitations, and the application process.
Under Thai law, a Rep Office may only engage in five specific business activities:
Sourcing goods or services in Thailand for the head office.
Inspecting and controlling the quality and quantity of products purchased in Thailand.
Providing advice concerning products sold by the head office to Thai agents or distributors.
Disseminating information about new products or services of the head office.
Reporting business developments in Thailand to the head office.
If the office performs any activities outside these five, it may be considered to be illegally conducting business.
No income generation: A Rep Office cannot engage in trading, buying, selling, or negotiating contracts on behalf of the parent company.
No need for a Thai partner: 100% foreign ownership is allowed.
Limited liability: The parent company remains fully liable for all actions and debts of the Rep Office.
No corporate income tax: Since the office cannot generate income, it is exempt from corporate income tax (except on interest earned from bank deposits).
Setting up a Rep Office can be ideal for foreign firms that want to:
Test the Thai market before committing to full operations.
Support Thai distributors or customers with technical advice.
Conduct product research or quality checks.
Explore future investment opportunities.
Other benefits include:
Lower startup costs compared to a branch or limited company.
No need to register as a Thai company.
Ability to sponsor work permits and visas for foreign staff.
To legally operate, a Rep Office must obtain a Foreign Business License (FBL) under the Foreign Business Act (FBA), issued by the Department of Business Development (DBD).
Here are the key requirements:
Minimum capital requirement: 3 million Thai Baht (THB), to be fully injected into Thailand within a specified period (25% upon registration, the rest within 2 years).
Parent company: Must be a legally registered entity abroad with good standing.
Scope of work: Must be limited to the five approved activities.
Personnel: At least one responsible person must be appointed in Thailand to act as the office head.
Key documents typically include:
Certificate of incorporation of the parent company
Articles of association or company bylaws
Letter of intent stating the purpose of establishing the Rep Office
Power of attorney appointing a local representative
Details of the office location in Thailand
Identification of the office’s director or head
Note: All foreign-language documents must be translated into Thai and notarized.
You must submit your application for a Foreign Business License (FBL) to the Department of Business Development (Ministry of Commerce). The process involves:
Filing the required forms
Presenting supporting documentation
Providing a clear explanation of the scope of operations
If the documents are complete and the activities comply with FBA rules, approval is usually granted within 30 to 60 working days.
The parent company must remit the minimum capital of THB 3 million into the Rep Office’s Thai bank account according to the following schedule:
25% within the first 3 months
An additional 25% within the first year
The remaining 50% within 2 years of approval
Proof of capital injection must be reported to authorities.
Although a Rep Office is not a Thai company, certain registrations are still required:
Tax ID: Obtain a tax identification number from the Revenue Department within 60 days.
Social Security Fund: If hiring staff, registration with the Social Security Office is required.
Work Permits: Foreign staff must obtain work permits and visas through the Ministry of Labour.
Even without commercial activities, a Rep Office must maintain good standing through:
Annual report filings
Accurate bookkeeping and expense records
Renewal of work permits and visas for foreign employees
Reporting any changes (e.g., address, representative) to the DBD
Failure to comply can result in penalties or revocation of the business license.
One key benefit of a Rep Office is its ability to sponsor foreign employees. Typically, the office must employ:
At least one Thai national per foreigner
Inject at least THB 3 million capital for one work permit
Work permits are issued for one year and can be renewed. Applicants must meet standard qualifications (such as relevant experience or a degree).
Application processing time: 1 to 2 months
Initial setup cost: Varies, but legal and administrative fees usually range from THB 50,000 to THB 100,000
Minimum capital: THB 3 million (injected progressively)
Ongoing costs: Office rent, staff salaries, accounting, tax filings
A Representative Office is an excellent way for foreign companies to establish a low-risk, strategic presence in Thailand. It allows the parent company to support Thai customers and distributors, gather market intelligence, and explore potential expansion—without the need to form a limited company or engage in sales.
However, since it cannot earn income or sign contracts, a Rep Office is best suited for companies focused on market entry support and long-term planning. With the right legal support and planning, the setup process is straightforward and cost-effective.