Most multinational companies around the world are looking for the best opportunities to expand their business operations to Thailand. But they often find it complicated to set up a Thai Limited Company. Rather, many of the business professionals are eager to set up branch offices in the country from where they can keep an eye on specific operations.
As per the Thai laws, the branch offices are also recognized as global companies and they are governed under Foreign Business Act (FBA). Therefore, the business owners are desired to obtain Foreign Business License in order to set up their branch office anywhere in the country. Other than this, as per Thai law, unlike regional offices and representative offices; branch offices are not restricted to do non-trading activities. The branch offices are allowed to make their own income. Moreover, the branch liabilities that arise due to various business activities happening within Thailand, will not be restricted within the country only; rather, the processes can be easily extended further to the foreign head offices.
It clearly means that business owners that are interested to execute some business activities in Thailand can set up a Branch office here, which will not be considered as a separate legal entity. Although it will have a separate tax entity, the branch will be acting only as a part of the main company. Note that as this branch usually forms a permanent unit in the country to represent the foreign company, it must be registered with the Ministry of Commerce in Thailand.
As per FBA regulations, there are few restrictions for foreigners to run their business activities in Thailand. Different types of businesses may require a unique set of certificates and licenses to start their operations. There are three lists of businesses that can be run in Thailand as per FBA, it includes:
Business List 1: This category focuses on businesses that are not allowed to be operated by a foreigner for some special reasons.
Business List 2: In this list, they have mentioned a list of businesses that are reserved only for Thai nationals to help them ensure national security, safety, environment, and culture. Although in this case the maximum percentage of shares that are allowed to be owned by some foreigners are limited to 60%; however, if the project is approved by the cabinet, the ratio can be increased to 75%.
Business List 3: Here is another list of businesses that are not yet started by Thai nationals to compete with foreign investors. These businesses are easier to run for foreigners without worrying about any restrictions. However, it is important to obtain FBL and do Company Registration in Thailand before setting up a new business.
As per FBA, branch offices are also considered as foreigner setups and they can be run by a person not registered in Thailand. Thus, it is important to have FBL before starting activities under lists 2 and 3 mentioned above. Following adequate procedures to set up the branch office in Thailand may help you assure a profitable journey in the long run.
As per the Thai laws, the branch offices are also recognized as global companies and they are governed under Foreign Business Act (FBA). Therefore, the business owners are desired to obtain Foreign Business License in order to set up their branch office anywhere in the country. Other than this, as per Thai law, unlike regional offices and representative offices; branch offices are not restricted to do non-trading activities. The branch offices are allowed to make their own income. Moreover, the branch liabilities that arise due to various business activities happening within Thailand, will not be restricted within the country only; rather, the processes can be easily extended further to the foreign head offices.
It clearly means that business owners that are interested to execute some business activities in Thailand can set up a Branch office here, which will not be considered as a separate legal entity. Although it will have a separate tax entity, the branch will be acting only as a part of the main company. Note that as this branch usually forms a permanent unit in the country to represent the foreign company, it must be registered with the Ministry of Commerce in Thailand.
As per FBA regulations, there are few restrictions for foreigners to run their business activities in Thailand. Different types of businesses may require a unique set of certificates and licenses to start their operations. There are three lists of businesses that can be run in Thailand as per FBA, it includes:
Business List 1: This category focuses on businesses that are not allowed to be operated by a foreigner for some special reasons.
Business List 2: In this list, they have mentioned a list of businesses that are reserved only for Thai nationals to help them ensure national security, safety, environment, and culture. Although in this case the maximum percentage of shares that are allowed to be owned by some foreigners are limited to 60%; however, if the project is approved by the cabinet, the ratio can be increased to 75%.
Business List 3: Here is another list of businesses that are not yet started by Thai nationals to compete with foreign investors. These businesses are easier to run for foreigners without worrying about any restrictions. However, it is important to obtain FBL and do Company Registration in Thailand before setting up a new business.
As per FBA, branch offices are also considered as foreigner setups and they can be run by a person not registered in Thailand. Thus, it is important to have FBL before starting activities under lists 2 and 3 mentioned above. Following adequate procedures to set up the branch office in Thailand may help you assure a profitable journey in the long run.
