Further liberalization of Foreign Business Act:
Representative Offices exempted from requirement of Foreign Business License
Representative Offices have been exempted from having to obtain a Foreign Business License under a new Ministerial Regulation that became effective on 9 June 2017 (the “Regulation”).
As a result, Representative Offices can commence business operations in Thailand without having to apply for a Foreign Business License from the Department of Business Development at the Ministry of Commerce (“DBD”). The process of establishing a Representative Office in Thailand is now extremely simple and much less time-consuming.
The new Regulation also prescribes that the Representative Office must maintain at least THB 2,000,000 in minimum capital, instead of at least THB 3,000,000 as previously required.
However, the scope of the eligible activities of the Representative Office remains unchanged and is limited to:
- Sourcing of goods or services in Thailand for the head office;
- Inspecting and controlling the quality and quantity of goods that the head office purchases or contracts for production in Thailand;
- Rendering advice concerning new goods sold by the head office to consumers or distributors;
- Distributing data and information concerning new goods or services of the head office; and
- Reporting on business trends in Thailand to the head office.
The Representative Office is required to keep accurate accounts on its business operations in Thailand, and obtain a 13-digit registration number by submitting an application to the DBD upon the commencement of its business operations in Thailand.
Furthermore, the requirement for each foreign staff member of the Representative Office to obtain a work permit remains unchanged. In this regard, the Representative Office shall be named as the employer and shall employ at least one Thai national per one foreign employee.
A Representative Office can now be set up within one week, whereas in the past it took three to four months to obtain official permission in the form of a Foreign Business License.
For more information, contact Mr. Andreas C. Richter at: [email protected].