A representative office is a form of business organization for foreign companies who wants to establish their business in Thailand. Establishing a representative office is fast, easy and helps companies to analyze the market potential and opportunities. This form of business does not require a Foreign Business License to operate. However, a representative office is limited and one of the main limits is that the structure is not allowed to invoice in Thailand.
A representative office is limited to:
- Sourcing of goods or services in Thailand for the Head Office,
- Checking and controlling the quality and quantity of goods purchased or hired to manufacture in Thailand by the head office,
- Giving advice concerning goods of the head office sold to agents or consumers,
- Propagation of information concerning new goods or services of the head office,
- Report on business trends in Thailand to the head office.
A representative office has to meet the following criteria:
- Non-revenue generating activities,
- No authority to accept purchasing order to make offer for selling or to negotiate for carrying out of business with person or juristic person in the country in which it is established,
- All expenditures incurred by the representative office must be borne by the head office,
- It is not subject to corporate income tax, in accordance with revenue code except deposit interested of remitted funds from the head office has to pay tax.