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Other Forms of Company Representation
Under the Alien Business Operations Act BE 2542 (1999) which came into force in March 2000, it is also possible for foreign companies to set up business operations in Thailand as follows:-

    Branch Office:  A foreign incorporated company may establish a branch office to conduct its business in Thailand under the terms of the Act.  Branch offices are required to maintain only those accounts relating to the activities of the branch office in Thailand.  Since the abolition of `Representative Offices' under the new Act, many foreign companies trading or marketing products in the region out of Thailand have applied for Branch Office status, or left Thailand.  Proper local professional advice on tax liabilities is a key consideration in setting up a Branch office.  For example, the Revenue Department may consider revenues earned by the foreign head office from sources within Thailand as subject to Thai tax.  As a condition for approval of an Alien Business Licence to a branch of a foreign corporation, working capital amounting to a total of five million baht in foreign exchange must be brought into Thailand over a period of time.

    Regional Office:  A multinational corporation may establish a regional office in Thailand to engage in limited non-revenue-earning activities restricted to specified activities including: contracting, coordinating and supervising the activities of affiliated branches or subsidiaries, marketing control and sales promotion etc.

    Representative Office:  This type of entity has been abolished under the new Alien Business Operations Act.  A number of companies with Representative Offices applied for the new Branch Office status but many small companies simply folded.

    Joint Venture:  Is not recognised as a legal entity under Thai Companies Law, but rather is subsumed under the normal definition of partnership.  Since a joint venture in general practice is a group of persons (natural or juristic) entering into an agreement in order to carry on a business together, the Thais see it as an ordinary or limited partnership.  Income from a joint venture is subject to corporate taxation under the Revenue Code, as if it was a single juristic entity.

Editorial Comment: If you want to open business operations or form a company in Thailand, we strongly recommend that you consider the option of a partnership with majority local Thai participation.  This has been the norm in Thailand for foreign investors since the introduction of the Alien Business Operations Act in 1972.  The participation of Thai partners not only ensures a smooth ride through the legal processes but allows you the benefit of their advice and counsel through all stages of your businesses evolution.  Furthermore, since 1972 many legal ways have been developed to ensure proper control of your Thai company by responsible parties.