Branch office Thailand

BRANCH OFFICE

When a foreign company wishes to establish a branch in Thailand, it needs to be registered. 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.

 

OVERVIEW

  • Foreign Ownership – Up to 100%
  • Capital Requirements – Minimum 3 million THB paid-up capital
  • Tax Rate – Regular progressive corporate income tax rates (check if any Tax Treaty with company home country)
  • Foreign Business License – Issued upon approval of the registration
  • Business Restrictions – Restricted to the business for which the Branch Office is registered
  • Registration Duration – 3–4 months

PROCESS OF APPLICATION

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.

Find hereunder a list of documents to be prepared for the application to be submitted at 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. 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 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 declaration detailing the type of business for which a license application is necessary to establish the branch:

–        Type of business for which the application is made, including the stages of operations.

–        An amount estimate as regards to the funds invested by the branch in Thailand for the acquisition of fixed assets and operational expenses the business will generate per annum over a period of three years or over the period the business has been in operation if the company is less than three years old.

–        Size of operations and workforce in Thailand employed by the branch.

–         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.

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 the establishment of the Branch Office in Thailand.

NOTE:  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. 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 is the same as that of a foreign-owned company registered in Thailand.

Hua Hin Law Firm