Service Rates

Import Sales Representative Office and Importer (1-Year Contract)

$60,000.00

The Representative Office is an important form of business organization in Thailand since it helps to facilitate the import and export of goods by foreign companies. A Representative Office is characterized by the following features:

 

It does not receive any revenue from providing services

It cannot receive purchase orders or make sales or negotiate business with third-parties

Its expenses are paid entirely by the head office

It is not subject any corporate income tax, except for interests on any remaining funds that it has received from the head office that is deposited in its bank account

Furthermore, a Representative Office is defined by government regulations as the office that a foreign company sets up in Thailand in order to engage in the “international trading business.” According to the “Regulations of the Office of the Prime Minister Re: Establishment of a Service Center for Visas and Work Permits (No. 3) B.E. 2544 (2001)”, the “international trading business” is defined as consisting of the following activities, which are performed on behalf of the head office or affiliated companies:

 

Reporting on business movement in Thailand

Providing advice related to products that are being sold to distributors or customers

Sourcing goods and services in Thailand

Inspecting and controlling the quality and quantity of goods purchased or ordered to be manufactured in Thailand

Introducing information regarding new products or services

The Representative Office is strictly limited to the above five activities and may engage in any or all of them. However, according to an “Announcement of the Revenue Department Re: Income Tax and Business Tax of a Representative Office of B.E. 2526 (1986)” if the Representative Office were to offer some service outside of this defined scope, then the Revenue Department would be empowered to subject the Representative Office to the regular Thai corporate income tax on all of the income it has received; this includes all of the support income that the Representative Office receives from its head office.

 

Furthermore, the following business activities are outside the scope of activities of a Representative Office:

 

Making any purchases or payments or any related business transactions on behalf of the head office or affiliated companies

Making exports of any products ordered by the head office or affiliated companies

Performing quantity and quality control for unaffiliated companies

Performing after-sale services such as installation or maintenance

Providing advice regarding products that are produced by unaffiliated companies

Accepting purchase orders on behalf of the head office or affiliated companies

Coordinating the sales of products on behalf of the head office or affiliated companies

Publicizing products or service which are already available in Thailand

Acting as an agent or distributor between the head office or affiliated companies

Performing any planning or coordination with other entities on behalf of the head office or affiliated companies

Acting as the agent of the head office or affiliated companies in any contracts or any business transactions

Making business reports to unaffiliated companies

In the following article, we will analyze how the government officials consider the criteria that is required to set up the Representative Office and the tax implications.



 

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