Regional Office

In order to promote Thailand as the region’s commercial center, in 1992, the Prime Minister’s office passed a regulation facilitating the formation of regional offices of trans-national corporations within the Kingdom. This regulation is designed to create a “one-stop service” with the Department of Commercial Registration for trans-national corporations.

A regional office has the ability to co-ordinate and supervise the company’s branches and its affiliated companies in the region on behalf of the head office. The regional office may provide these branches and affiliated companies with:

• Advisory and management services

• Financial management services

• Training and personnel development services

• Marketing control and sales promotion plans

• Product development

• Research and development services.

Benefits from establishing a regional office

Companies establishing regional offices are not required to be registered or incorporated as juristic persons in Thailand, and do not have to submit any financial statements to the Department of Commercial Registration. The Department will assist in customs clearance of the personal effects of transferred foreign staff and in their applications for further temporary stay in the Kingdom or change in visa type. Work Permits for aliens performing work in the regional office will be granted for up to five persons depending on necessity and volume of work in each particular case, and fees of not more than 1,000 baht per year must be paid for a Work Permit or its renewal.

Conditions for permission to establish a regional office

A regional office must not:

• Derive any income from its activities. Expenditures incurred by the regional office shall be borne by the head office.

• Have the power to accept a purchase order or make a sales offer

• Negotiate or enter into business arrangements with any natural or juristic person within the Kingdom.

A permit to establish a regional office, valid for five years, can be granted after application with the Alien Business Section of the Department of Commercial Registration at the Ministry of Commerce. The fee is five Baht per every 1,000 Baht of registered capital, not to exceed 5,000 Baht.

When a permit to establish a regional office is issued, it may be subject to the following conditions:

* The total debt financing used in the business shall not exceed seven times the portion of the capital owned by shareholders or the owner of the business

* Money used in the regional office shall be remitted from abroad and shall not be less than a total of 5,000,000 Baht. During the first year period, at least 2,000,000 Baht of the total must be remitted, at least half of which must be remitted within the first six months. Then, no less than 1,000,000 Baht should be remitted each succeeding year until the full 5,000,000 Baht has been transferred. Documents verifying this transfer must be presented to the Department of Commercial Registration

* At least one person who is responsible for operating the regional office must have their domicile in the Kingdom.

The Director-General of the Department of Commercial Registration is also authorized to impose any conditions on a business permit granted under the rules.