Representative office or branch office is always a good question for foreign companies wanting to enter the Thai market. Many want to sell their products or services but do not want to deal with the difficulty of getting permission to operate are a branch office. They choose to seek a foreign business license to operate as a representative office instead, which is more likely to be approved by Thailand foreign business committee, Department Business Development. They usually know there being a huge difference being a representative office or branch office, that as a representative office, they cannot generate income in Thailand. However, many think that they can solicit sales using their representative office employees and divert all the sales to be processed by their headquarters or affiliates overseas and thus they think they are not breaking Thailand foreign business law. The bad news is they are, and it is not that difficult to be turned in, sometimes by their own disgruntled employees.
A lot of times, the foreigners who chose to operate their foreign owned business in Thailand as a representative office, find out later that operating as a representative office does not really suit their business goal. They will have to go through the whole process of obtaining a foreign business license all over again, in order to be granted the permission to operate as a Thailand Branch Office of a foreign company. This time around is even more difficult than if they apply for the branch office from the beginning. The officials will scrutinize the application more and ask for a lot of documents to support the case. They may turn to the Representative Office and suspect that it has been generating sales all along.
Foreign companies should plan carefully whether your presence in Thailand should be just a Representative Office or a Branch Office. Even though preparing the application for a branch office is harder and more thorough, thus more expensive, than for a representative office, it is worth it in the long run. Not all kinds of business can get the approval to operate as a representative office or branch office. However, if you work with very smart and competent people like us at Thai Lawyers, we will help make sure that your application has the highest chance to get approved by the foreign business committee. Do not choose your legal team by the lowest fee you find. Whether it is a license for a representative office or branch office, Thai Lawyers is your best team.