Establishing a Branch Office in Thailand

A branch office offers foreign companies a way to operate in Thailand without forming a local limited company. This setup gives you direct access to the Thai market while remaining legally tied to your head office but it comes with its own legal, regulatory, and financial responsibilities.

Our service include:

Foreign Business License application support
Branch setup and documentation preparation
Capital remittance and compliance guidance
Tax registration and annual filings
Appointment and oversight of branch manager
Risk assessment for parent liability

What Is a Branch Office?

A branch is not a separate legal entity: It is treated as an extension of the foreign parent company.
Because of this, liabilities incurred in Thailand also lie with the overseas head office.
Unlike a representative office, a branch in Thailand can generate revenue, sign contracts, and carry out business activities.

When Is a Foreign Business License (FBL) Required?

Under the Foreign Business Act (FBA), many activities are restricted. If your branch’s business falls under these restricted categories, you must obtain a Foreign Business License (FBL) to operate legally in Thailand.
The FBL application is reviewed by the Ministry of Commerce. Approval typically takes at least 60 days.
The minimum capital requirement is generally THB 3 million for licensed activities, and this amount must be remitted in tranches over up to three years.

Key Requirements & Documentation

To set up a branch office in Thailand, you’ll need:

Certified copies of the parent company’s incorporation documents (e.g., Articles of Association or Memorandum)
A Power of Attorney naming a branch manager in Thailand who will oversee operations.
Personal identification for the appointed manager (e.g., passport or Thai ID) and proof of their address or visa status.
A statement of business activities in Thailand, along with financial forecasts, investment plans, and estimated expenses.
Any additional documents required by the Ministry of Commerce, depending on the FBA list under which your business falls.

Legal & Tax Obligations

Corporate Income Tax: A branch is taxed in Thailand on its local profits at a rate of 20%.
Permanent Establishment: For tax purposes, the branch is treated as a permanent establishment, meaning it must report local revenue and expenses.
Reporting & Filing: Every fiscal year, you must file financial statements and tax returns with the Thai Revenue Department.

Manager & Capital Requirements

The parent company must appoint at least one branch manager who resides in Thailand to oversee daily operations.
Capital inflows must follow a minimum schedule (for example, 25% of committed capital within the first few months, then gradual payment over time).
If your business activities are restricted under the FBA, proper capitalization and licensing are mandatory before operation begins.

Risks & Considerations

Choosing a branch office structure brings certain risks:

Liability Exposure: Since the branch is not separate from the parent company, all liabilities in Thailand also fall on the head office.
Regulatory Risk: Expansion into restricted business areas without the correct license (FBL) can lead to penalties or operational bans.
Financial Commitment: The initial capital requirement and remittance schedule can impact cash flow, especially during the first years.

Why Work with Base Law Firm

Regulatory Expertise: We guide you through applying for a Foreign Business License, preparing all necessary documentation, and complying with FBA rules.
Tailored Structuring: Our team advises on whether a branch, subsidiary, or other structure is best suited to your business goals in Thailand.
Ongoing Support: After establishment, we help with tax filings, financial reports, and compliance with Thai laws.
Risk Management: We identify liability risks early, helping safeguard the parent company by ensuring the branch is properly structured.