A “Representative Office” allows a foreign investor to evaluate potential market opportunities without the need to establish a subsidiary in Thailand. Thus, it provides an interesting vehicle for foreign investors who may be considering entering the Thai market.
Thailand has recently made the set-up process of such an office more investor friendly. Previously, prior to operating, a representative office was required to obtain a “Foreign Business License” because, under the Foreign Business Act of 1999 (the “FBA”), its permitted activities were considered a “service” reserved to and for Thais and prohibited to foreigners without such exemption.
This requirement has been abolished. Under Ministerial Regulation No. 3, “Prescribing Service Businesses Which Do Not Require a Foreign Business License” (2017), of the FBA, the operation of a representative office is no longer considered such a service.
Thus, a representative office is now permitted to provide its specified services without the need to apply for a foreign business license. This is good news for foreign investors who would like to open a representative office, because the exclusion will now allow for an expedited and more efficient set-up procedure.
For more information about businesses entering the Thai market, please contact your Ally Law corporate and international business lawyer.