Thailand Branch vs Representative Office: Revenue, Liability, and Licences

A branch can trade; an RO must stay within support work

In Thailand, a branch can conduct revenue-generating business where the activity is lawfully available and the necessary permissions are in place. A representative office (RO) cannot earn service income or act as a local sales operation; it receives head-office funding for its permitted support functions. Both are presences of the foreign company, rather than newly incorporated Thai subsidiaries. The Board of Investment’s office descriptions support those structural and activity distinctions; their older licensing instructions should not be used for the current RO exemption.

The RO’s permitted categories cover sourcing, checking goods, advice about head-office products, information about new products or services, and reporting Thai business developments. The Department of Business Development (DBD) draws a sharper boundary between support and execution: its Thai activity guidance excludes taking orders, executing purchases, after-sales installation or repair, and other listed commercial acts. Support for a sale is not permission to execute the sale. Give staff specific allowed tasks rather than a broad instruction to “develop the market.”

For a branch, revenue capacity is a conditional advantage. It lets the parent consider a local commercial operation without creating a subsidiary, but it does not settle the Foreign Business Act or sector-law analysis. For an RO, the lack of customer revenue is an operating constraint, not merely an accounting presentation. A team expected to negotiate transactions cannot be made suitable by sending invoices from overseas.

Before choosing either office, draft a short activity statement naming the customer or beneficiary, the work delivered in Thailand, the person approving prices and orders, and the destination of payments. This is a recommended decision aid, not a government form. It exposes whether the intended presence is genuinely supportive or expected to perform commercial work.

No revenue does not mean no parent liability

A branch does not isolate the foreign company from the branch’s contracts or wrongful acts. The BOI explanation of branch liability expressly identifies the branch as part of the parent and retains parent liability for contracts and torts. An internal branch budget is therefore not a cap on the parent’s exposure to a counterparty.

An RO is also the overseas juristic person operating an office in Thailand, as the official description of its legal character explains. The consequence is that opening the office does not insert a separately incorporated Thai company between the parent and its authorized commitments. Do not confuse no service income with limited liability. Even a support office needs premises, people and suppliers, and its authority to incur those obligations must be clear.

Separate the commercial scope from the signing mandate. A recommended parent mandate can authorize an office manager to arrange administrative support while reserving customer contracts and purchasing commitments for specified officers. That control can reduce unintended commitments; it cannot legalize an activity outside the office’s permitted scope. Review the contracting party, the signatory’s authority, insurance and dispute terms together.

If containing parent exposure is a decisive requirement, the comparison must widen to separate-company protection compared with branch exposure . That is a different legal structure decision: company formation requirements in Thailand concern creating a local company, whereas choosing between these two offices keeps the existing foreign company central.

The shared parent relationship and the different revenue boundaries need to be read together before applying the permission rules.

Test the activity before deciding which licence applies

A branch does not automatically require a Foreign Business License (FBL) merely because it is a branch. Under the Foreign Business Act framework , the overseas juristic person is foreign; the next questions concern the actual business, restricted lists, exclusions and any qualifying entitlement. Restricted activities may require a licence or a Foreign Business Certificate (FBC), while prohibited activities cannot be treated as an ordinary application route. The controlling Thai law and the precise activity determine the result.

For an RO confined to the qualifying support business, DBD’s current 2026 departmental catalogue confirms that the 2017 ministerial regulation removed the FBL requirement. This is the current position checked on October 27, 2026. The exemption follows the qualifying activity, not every task assigned to an office called an RO. Additional commercial services require their own analysis before they begin.

Current exclusions matter for branches too. A September 2026 Ministry of Commerce explanation describes further excluded service categories, including conditional services within corporate groups. This means that “branch equals FBL” is too broad. It also means that a group relationship is not enough on its own: the exact service and relationship conditions must match the applicable exclusion.

Foreign-business clearance is only one layer. Section 13 of the Act preserves relevant special-law treatment; a product, professional service or regulated operation may still face its own rules. Likewise, an RO exemption does not grant immigration or work authority. The government’s office-employment stay guidance treats stay documentation and work-permit evidence separately. Its 2023 document list is not presented here as a current application checklist.

Record the legal basis against each intended activity: outside a restricted category, a specific exclusion, an issued permission, or an applicable certificate route. “Application submitted” is not the same entry as “permission obtained.” A written scope conclusion should identify the covered work and the acts that would require it to be revisited.

Apply the same instruction to both office forms

Use the following counterfactual test when the team’s duties are still negotiable. Every row is hypothetical; the outcomes apply the official scope distinctions above and are planning recommendations, not individual approvals. Read across each row without changing the proposed work to make one form look easier.

For your own transaction, write three separate results underneath it: activity and revenue fit , the parent commitment and authorized signer, and the clearance evidence. A result such as “RO: no invoice, parent signs” is incomplete because it says nothing about what the local team actually performs. Mark any unresolved result before issuing the instruction.

If an intended duty fails the RO test, choose a real change: remove that duty from the Thailand team or assess a commercial operating structure. Keeping the same duty while changing the email signature, bank account or billing location does not answer the scope problem. For a branch, narrow the launch to activities whose legal basis has been established rather than assuming one cleared service covers the entire business plan.

Keep funding, income and clearance evidence consistent

Head-office expense funding and customer earnings should remain distinguishable in the records. The Revenue Department’s published RO interpretation distinguishes funding for the described head-office support functions from revenue, and warns that services to other persons can change the analysis even when unpaid. This is a historical interpretation used for that narrow distinction; it is not a blanket exemption for every receipt or transaction.

A branch’s Thai-business income instead requires a corporate-tax assessment under Revenue Code section 66 . The parent’s billing location does not, by itself, settle the Thai tax position. Keep the service agreement, description of local performance, invoices and head-office allocations available for the accountant to assess attribution. Tax treatment does not itself establish foreign-business permission, and foreign-business clearance does not settle all tax treatment.

Both office choices require an accounting plan rather than an assumption that no local company means no reporting. DBD’s foreign-juristic-person financial-statement manual requires audited annual statements within five months of the accounting close. Confirm the correct accounting period and applicable tax filings separately; revenue status alone does not identify all obligations.

Keep identification evidence apart from permission evidence. DBD’s current online-service directory lists foreign-juristic-person identification and foreign-business permission as separate services. A number identifies the foreign business presence; it does not demonstrate that every planned activity is authorized. Retain the activity assessment, any issued licence or certificate and its conditions alongside the parent mandate, rather than treating a single registration output as launch clearance.

Choose the office your operating plan can actually obey

Choose the RO route only when the Thailand instructions can remain within the defined support functions, without service revenue or excluded execution work. Consider a branch when the parent needs a commercial operation and accepts the resulting parent exposure, then establish the legal basis for each intended activity. Neither decision should be made solely from an expected registration burden.

Approve a specific operating boundary: who the team serves, what it may deliver, what it may sign, how it is funded and which clearance covers the work. If any of those answers changes, reopen the comparison before the changed work begins. A proposed local sale, purchase execution or installation duty is a decision trigger, not an administrative detail to leave until after launch.