Branch Office in Thailand, is a company established under foreign laws, and set up a branch office in Thailand, to operate a service business or industrial business to the head office or affiliated companies or groups in foreign countries. Branch Office can generate revenue through its business operation or receive financial support from the head office. However, business types must exist in 21 types of businesses according to the List Three of the Foreign Business Act BE. 2542 (1999) (FBA), and Branch Office is required to acquire a Foreign Business License (FBL) to operate a business in Thailand.
Pros and Cons
Branch Office is allowed to have 100% Foreign ownership, operate 21 businesses under Foreign Business Act., and earn income in Thailand. The tax-related compliance for a Branch Office in Thailand is the same as any company registered in Thailand. However, the Branch Office is not considered a separate entity but an extension of its principal company. Thus, the Branch Office will not have different Shareholders or Bylaws from those of the leading company.
Scope of business for Branch Office
Branch Office can generate revenue through its business operation or receive financial support from the head office. However, business types must exist in 21 businesses according to List Three A Foreign Business Act B.E. 2542 (1999)
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Requirements
- Address of Branch Office in Thailand
- At least 1 representative who must have a domicile in Thailand
- Main Company’s documents with Notary Public with Thai Translation
- The last 3 years of financial statement with Notary Public with Thai Translation
- The minimum capital remittance of each business category must be 3MB
- The minimum capital remittance must not less than 25% of the average per year of three year estimated expenditure
- For instance, estimated expenditure on the average per year of three year estimated expenditure is 100 million Baht. Hence, the minimum capital is 25 million Baht
- The minimum capital remittance must be kept up until stop operating a business in Thailand i.e. the minimum capital can be retained in various forms such as fixed assets or current assets
- The high technology or innovation is brought to the business activity in Thailand
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Procedures
- Provide the Head Office’s documents and the last 3 years of financial statement with Notary Public
- Thai translation of company’s documents in (1)
- Provide the Estimated Business Plan for the next 3 year (At least 1-2 months)
- Prepare the FBL application along with company’s documents (At least 2-4 weeks)
- Submit FBL application and supporting documents to DBD (1 day)
- DBD will make an appointment for the Business Interview (At least 2-4 weeks)
- DBD will conclude the application details to the Sub-Committee and Committee of Foreign Business for an approval. (At least 1-2 months)
- After the Director- General’s approval, DBD will notify the applicant and issue the license within 15 days.
- Operating business immediately after obtaining the license.
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Government Fees
22,000 – 252,000 THB
Period of capital remittance to Thailand
After Branch Office obtains the FBL for its business operation, Branch Office will be required to remit capital to Thailand for the period as follows:
Accounting Duty
Branch Office has the accounting duty to prepare and submit the financial statement to the related Government Department under the Notification of the Department of Business Development on Directions Pursuing Accounting Law to be applied with a Juristic Person Established under Foreign Law But Operating Business in Thailand Prescribed as the Person Charged with the Accounting Duty, B.E. 2559 (2016)
Tax Duty
Branch Office can generate income from 21 business activities in Thailand. Therefore, Branch Office must pay the corporate income tax in Thailand and is required to pay the corporate income tax on the interest of remitted money in Thailand which is paid in Thailand at the rate of 20% as prescribed in the Income Tax Rate Schedule of Revenue Code.
Visa and Work Permits of representative and migrant workers
Under the regulation of Department of Employment B.E. 2552 (2009) related to bringing migrant workers to work for the Branch Office in the Kingdom.
The representatives or workers of the Branch Office can apply for a work permit and 1-year working visa.
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Requirements
- The proportion of Thai employees and expat shall be at least 4:1
- The minimum remited capital shall be at least 2 MB: 1 expat