5.5 Regional Offices2
A foreign enterprise can establish a regional office in Thailand,
provided that it meets the following criteria:
x is a transnational corporation, which is defined to mean a
juristic person incorporated under foreign law and entered to
carry on business in other countries; andx has at least one branch or affiliate in Asia, which may include
Thailand.
The regional office in Thailand must not generate income from its
activities and must have no power to accept purchase orders from,
make sale offers to, or carry out business negotiations with persons or
juristic persons in Thailand. Furthermore, the regional office’s
expenses can only be funded by the head office. The activities which a
regional office is permitted to undertake are: (i) to carry out duties in
communicating, coordinating, and directing, on behalf of the head
office, the operations of the branches and affiliates located in the same
region; and (ii) to provide the following services on behalf of the head
office:
x consulting and management;
x training and personnel development;
x financial management;
x marketing control and sales promotion planning;
x product development; and
x research and development.
Although the regional office business is not expressly acknowledged
in the FBA, the Ministry of Commerce has issued a Notification and
clarification stating that regional offices fall within the ambit of
Schedule Three, Item 21 (Service Businesses) of the FBA. Therefore,
a “foreigner” must apply for a Foreign Business License in order to
establish a regional office.