Branch Office in Thailand
An Australian investor with the intention to make his corporate presence felt in Thailand and conduct business activities without having to form a limited company may do so through the branch office structure. It would be 100% owned by the head office abroad.
The branch office may be able to engage in activities that the head office is conducting in Australia, activities that are in line with the former’s objectives as it is considered to be of the same entity. It is also allowed to earn income unlike the representative office which is limited to non-income generating activities only.
To look into perspective, a foreign company’s branch office in Australia is also not considered as a separate entity like in Thailand. This fact makes their head offices liable for a wrong committed by their branch offices.
Foreign Business Act B.E. 2542 and the Revenue Code
Still, even if it is not incorporated under Thai laws, the branch office would still be subject to the Foreign Business Act B.E. 2542 and the Revenue Code.
With these laws, the proponents of the branch office has to obtain a Foreign Business License in order to operate. Also, as it is also subject to the Revenue Code, the branch office has to obtain tax payer’s identification card plus it also has to be VAT-registered.
It can obtain a license to operate in Thailand for five (5) years although the branch office may be able to obtain a license to operate below such period.
The branch office must also be able to meet the capitalization requirements. It has to bring in at least three (3) million Baht of capitalization or at least 25% of the average calculated corporate expenses for the first three (3) years of operation in Thailand.