Representative Office vs Branch vs Subsidiary in Thailand

A foreign company entering Thailand has three main routes:

1. a representative office, which cannot earn income;
2. a branch of the foreign company itself;
3. a Thai subsidiary: a Thai limited company, majority foreign-owned (with an FBL or BOI) or structured to comply with the Foreign Business Act.

Each has different licensing, capital, tax and liability consequences.

1. Comparison at a glance#

2. Representative office#

Permitted activities#

A representative office may only carry out non-income-generating activities on behalf of its head office:

1. Sourcing goods or services in Thailand for the head office;
2. checking and controlling quality and quantity of goods purchased or manufactured for the head office;
3. advising on goods sold by the head office to distributors or consumers in Thailand;
4. disseminating information on new goods or services of the head office;
5. reporting on business movements in Thailand to the head office.

It cannot:

• sign sales contracts;
• issue invoices;
• receive payment for services;
• take orders on behalf of the head office.

The head office must fund all expenses from abroad.

Capital#

• At least 3 million THB brought in from abroad. Sources disagree on this figure. The BOI's One Start One Stop (OSOS) guidance states 3 million THB for a representative office. Mazars and some other advisers say 2 million THB is the legal minimum for a non-restricted activity and that 3 million is the practical figure because of work permits. We use 3 million THB, the official OSOS figure, and you should confirm with the DBD when you file.
• Under the 2019 Ministerial Regulation on minimum capital: at least 25% within 3 months, 50% within 1 year, then at least 25% a year, so all of it within 3 years. Show each tranche to the DBD within 15 days.
• Keep FET forms and bank evidence.

Tax#

• Generally not subject to CIT, because it earns no income. It must still obtain a tax ID.
• It withholds PIT for employees (PND.1).
• It pays SSO contributions.
• It files annual audited accounts with the RD, on PND.50 showing nil income.
• If the RD finds income-generating activity, such as quality-control fees charged to third parties or selling, it can assess CIT. The office also risks breaching its licence.

Typical users: buying offices for retailers, sourcing offices of manufacturers, and liaison offices that support a regional sales team.

3. Branch office#

A branch can carry on the business itself: contracting, invoicing and earning income. But it is not a separate legal entity, so the foreign parent is directly liable.

• Licence: an FBL for the specific business activity under List 3 (or List 2 with Cabinet approval). Capital of at least 3M THB, often more depending on the activity.
• Tax: 20% CIT on Thai-source profits. When profits are remitted abroad, the branch pays a further 10% under Revenue Code s.70 bis, filed on PND.54 within 7 days of the remittance month.
• VAT: register if turnover is over 1.8M THB.
• Accounting: separate Thai books, a CPA audit, and annual filing with the DBD and RD.

Example. A branch earns 10M THB profit before tax.

• CIT at 20% = 2.0M.
• Remitting the remaining 8.0M to head office attracts 10% = 0.8M.
• Effective rate: 28%.

A Thai subsidiary paying an 8.0M dividend would also withhold 10% (0.8M), so the overall result is similar. The differences are in liability, licensing and treaty relief.

Typical users:

• foreign banks, under Bank of Thailand rules;
• construction companies on government projects requiring the foreign contractor's own credentials;
• service companies that need the parent's balance sheet behind their contracts.

4. Thai subsidiary#

For most businesses, a Thai limited company is the most flexible option:

• Limited liability: the parent's exposure is limited to its investment.
• Ownership: up to 49% foreign without an FBL in restricted activities, or majority foreign with an FBL, a BOI promotion or the US Treaty of Amity.
• Tax: 20% CIT (SME rates for qualifying Thai-majority companies), BOI CIT holidays possible, and 10% WHT on dividends.
• Work permits: typically 2M THB paid-up capital and 4 Thai employees per foreign work permit (BOI exempt).

See our guides on company registration, the Foreign Business Act and the FBL.

5. Regional and international headquarters#

Groups with several Asian entities often consider the BOI's International Business Center (IBC) promotion. It offers:

• reduced CIT on qualifying income;
• PIT incentives for expatriates;
• FBA flexibility.

It replaced the older ROH, IHQ and ITC regimes. A Regional Office licensed under the FBA is a separate, non-income-earning option for coordinating affiliates. Check current BOI conditions (minimum spending, Thai staff, paid-up capital) before choosing.

6. Setup timeline and documents (representative office)#

Budget: professional fees of about 80,000–200,000 THB, plus the licence fee, translations and legalisation.

7. Which should you choose?#

• You only need someone on the ground to source, check quality or gather market information → representative office.
• Contracts must be signed by the foreign parent itself (bank, large EPC contractor) → branch.
• You will sell, invoice, hire and grow in Thailand → subsidiary, with BOI or FBL if majority foreign.
• Not sure yet → start with a representative office or a Thai-majority subsidiary, and convert later. A representative office cannot simply turn into a branch; a new licence is needed.

8. Common mistakes#

• A rep office that "helps close deals". Negotiating prices, taking orders, or having Thai customers pay the representative office breaches its licence. The RD may also treat the head office as carrying on business in Thailand through a permanent establishment, which creates CIT exposure for the parent.
• Head office documents not legalised. The DBD rejects foreign documents that are not notarised and legalised (or apostilled where accepted). Legalisation abroad is often the longest step, so start it first.
• Missing the capital tranches. Bring in each tranche on time and keep FET forms. A shortfall can be raised when the licence is reviewed or when work permits are renewed.
• Treating a branch as "cheaper". A branch needs a full FBL, an audit and separate books, and exposes the parent's balance sheet to Thai claims. For most SMEs a subsidiary is simpler.
• Ignoring treaty relief. Remittances, dividends and service fees may qualify for reduced rates under Thailand's double tax treaties. Check before structuring.

Frequently asked questions#

Can a representative office invoice customers? No. It cannot generate income in Thailand. Selling or invoicing requires a branch or a subsidiary.

How much capital does a representative office need? At least 3 million THB from abroad, brought in in tranches under DBD practice. Keep FET evidence.

Is a branch taxed differently from a subsidiary? Both pay 20% CIT on Thai profits. A branch pays 10% when profits are remitted abroad (s.70 bis); a subsidiary withholds 10% on dividends. The main differences are liability, licensing and treaty relief.

Can a representative office get work permits? Yes, for its foreign staff, subject to DOE conditions on capital and Thai employees.

Do I need an audit for a representative office? Yes. It must keep books, have them audited by a Thai CPA and file annually.

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Related guides#

• Foreign Business Licence (FBL) in Thailand: Requirements, Fees and Timeline
• Foreign Business Act Thailand: What Foreigners Can and Cannot Own
• BOI Promotion in Thailand: Incentives, Eligibility and How to Apply
• Corporate Income Tax in Thailand: Rates, SME Rates, Filing Deadlines