Representative Office in Thailand
A Representative Office in Thailand is still recognized as a corporate entity of a foreign firm. However, what makes it unique is the limitation of its activities in the Kingdom. Conditions are in place for the said office’s functions in the country and if these conditions are breached, tax which are otherwise non-applicable to a representative office will be imposed.
As what have stated earlier, the scope of functions of a representative office in Thailand is limited to non-income generating activities such as:
- To observe and report the movements of businesses in Thailand to its headquarters abroad.
- Provide its company headquarters with pertinent advice with regards to the movement of the goods that company is selling to distributors and or customers in Thailand. These goods should come from the head office or an affiliate company and not from the representative office.
- Searching for materials or services for its head office and or affiliate company.
- To inspect and control the quality and quantity of goods and or services purchased or ordered by the headquarters and or affiliate in which in turn to be manufactured within the Kingdom.
- Provide its head office with promotional activities with regards to the company’s new products or services.
What will happen if the Representative Office breaches its scope of activities?
The Thai government will deem the representative office as doing business in Thailand if the said office functions outside of those stated above. Additionally, if income is established for doing those activities, the representative office will be taxed accordingly.
Furthermore, it may be found that the representative office has violated the conditions set in establishing a representative office (for doing income-generating activities and the like) and it may lead to the cancellation of the license.
Law Firm in Thailand
Siam Legal is a full service law firm based in Bangkok but has a number of branches strategically located all over Thailand. It provides in depth service tailor-fit for its clients, both local and foreign companies.
It is a wise decision for companies and individuals, who are looking forward to establish representative offices in Thailand, to seek the expertise of Siam Legal with regards to everything about the subject.
They should remember that it is highly essential for them to fully understand the scope of functions of a representative office in Thailand and Siam Legal is among the best in providing representative office-establishment related activities.