What is a Branch Office in Thailand?

A Branch Office in Thailand is an extension of a foreign legal Structure. Unlike a Thai Company limited, the Branch does not have a separate legal identity from its parent entity.

As a result, the head quarter abroad remains fully liable for the debts, obligations, and activities in Thailand.

This structure is generally used by foreign companies wishing to conduct business in Thailand without incorporating a separate subsidiary.

Main characteristics of a Branch Office

A Branch Office is not considered an independent legal entity. It operates as an extension of its overseas parent company and can only carry out activities that fall within the scope of the parent’s business objectives.

The entity must appoint at least one local representative (Thai or foreigner) responsible for managing its activities in Thailand and liaising with the authorities.

As the foreign parent company remains legally responsible for all liabilities incurred by the Entity, careful consideration should be given to risk management and contractual commitments.

Unlike a Representative Office (link), a Branch is permitted to generate income and enter into commercial contracts in Thailand.

Capital requirements

A Branch Office is generally required to bring a minimum operating capital into Thailand.

In many cases, the minimum capital requirement is 3,000,000 THB, although higher amounts may apply depending on the business activity and licensing requirements.

As a Branch Office is an extension of a foreign company, there are no Thai shareholding requirements or ownership restrictions.

Registration process in Thailand

To establish a Branch Office, the foreign company must register with the relevant Thai authorities and obtain any required licenses before commencing operations.

The registration process generally includes:

• Preparation of corporate documents from the parent company
• Appointment of a local representative
• Registration with the Department of Business Development (DBD)
• Application for any required Foreign Business Licence or sector-specific permits
• Tax registration with the Thailand Revenue Department

Foreign Business Licence requirements

As a Branch Office is an extension of a company abroad, it is considered a non Thai business under the law. Certain business activities may therefore require a Foreign Business Licence (FBL) before operations can begin.

Because licensing requirements can be complex, each project should be reviewed individually before selecting this structure. At Gorioux Siam, our team helps businesses assess the feasibility of their project, identify applicable licensing requirements, and determine whether a Branch Office is the most suitable structure for their activities in Thailand.

Want to know more about Foreign Business License? Check our dedicated page here (link)

Accounting and compliance requirements

A Branch Office in Thailand is subject to Thai accounting and tax compliance for its local operations.

Compliance obligations include bookkeeping in Thailand, VAT and withholding tax filings where applicable, and annual audited financial statements.

As a Branch Office is an extension of a foreign company, its financial reporting is often closely linked to the head office, particularly for cross-border transactions and profit attribution purposes.

Taxation

Income generated by a Branch Office in Thailand is generally subject to Thai corporate income tax in the same way as a locally incorporated company.

The standard corporate income tax rate is up to 20% of taxable profits.

VAT and withholding tax obligations may also apply depending on the nature of the activities carried out in Thailand.

Generally, a Branch Office is taxed on income attributable to its activities in Thailand. The tax treatment of international transactions and cross-border operations should be reviewed on a case-by-case basis.

Advantages of a Branch Office

Some of the main advantages include:

• No need to create a separate Thai subsidiary
• Direct control by the foreign parent company
• Ability to generate revenue in Thailand
• Suitable for project-based operations and businesses requiring a direct extension of the foreign parent company

Disadvantages of a Branch Office

Some of the main limitations include:

• No separate legal personality
• The foreign parent legal entity remains fully liable for Thai operations
• Less flexibility than a Thai Company Limited in terms of ownership, governance, and future investment
• May not be the most suitable structure for long-term business expansion in Thailand

Who should use a Branch Office?

The structure is suitable for:

• Foreign companies wishing to maintain direct control over Thai operations
• International groups carrying out specific projects in Thailand
• Businesses that do not wish to establish a separate subsidiary

However, for many foreign investors, a Thai Limited Company is often a more flexible and practical structure.

At Gorioux Siam, we help businesses evaluate the most suitable structure for their expansion into Thailand and support them throughout the registration and compliance process.

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Frequently asked questions

What is the difference between a Branch Office and a subsidiary in Thailand?

The structure is an extension of a foreign company and does not have a separate legal identity. A subsidiary, such as a Thai Limited Company, is a separate legal entity with its own assets, liabilities, and obligations.

Can a Branch Office generate revenue in Thailand?

Yes. Unlike a Representative Office, it is permitted to conduct business activities and generate income in Thailand, subject to applicable licensing requirements.

Is the parent company liable for the Branch Office’s obligations?

Yes. the structure is not a separate legal entity, the foreign parent company remains fully liable for its debts, contracts, and other obligations.

Can a Branch Office employ foreign staff in Thailand?

Yes. However, the company must comply with Thai labour and immigration requirements, including the rules applicable to work permits and visas.