A branch office lets your foreign company operate in Thailand under its own name, with full control and no Thai shareholders. In return, your head office is liable for everything the branch does, and you bring in at least THB 3 million (about USD 90,000) in capital.
Whether that trade is worth it depends on your planned business activities, and how much liability your head office is willing to carry.
This article walks you through the essentials of setting up a branch office in Thailand, from requirements to post setup compliances.
Requirements to Start a Branch Office
To start a branch office in Thailand, you must adhere to the following requirements set by the Department of Business Development (DBD).
1. Foreign Business License (FBL)
By definition, a branch office is 100% foreign owned. This means, any commercial or service activity falling under List 2 or List 3 of the FBA requires a Foreign Business License (FBL) before commencing operations.
To process an FBL, you must submit a comprehensive 3-year business plan to the Foreign Business Committee. This plan must demonstrate technology transfer, local employment, and positive economic contribution to Thailand.
FBL Growth Constraints: A branch office can only conduct the business activities explicitly listed in its approved Foreign Business License (FBL). If your foreign entity decides to pivot or add new revenue channels in Thailand, you cannot simply update corporate registration details. Instead, you must apply for a new or amended FBL with the Department of Business Development (DBD).
Read more about how to obtain an FBL in Thailand on our guide.
2. Minimum Capital Rule
Under Section 14 of the Foreign Business Act B.E. 2542 (1999), a foreign branch office engaging in restricted commercial activities must meet a minimum working capital requirement. This requirement must be equal to THB 3 million OR 25% of the average estimated operating expenses over the first 3 years, whichever is higher.
- Standard Cap: For small to mid-sized operations with lower projected expenses, the minimum capital defaults to THB 3 million (~USD $85,000) per restricted activity.
- High-Budget Operations: For capital-intensive operations (e.g., large-scale technical or infrastructure projects), if 25% of the projected 3-year average expenditure exceeds THB 3 million, the branch must remit that higher total.
For businesses under the standard cap, if you register two distinct restricted business activities, the minimum capital doubles to THB 6 million. These sectors can include professional services, construction and infrastructure, tourism, advertising, and wholesale and retail.
3. Capital Remittance Schedule
Foreign head offices must remit the total required minimum capital directly from an overseas parent bank account in four scheduled statutory installments:
- First 3 months: Remit at least 25% of the total minimum capital (e.g., at least THB 750,000).
- End of Year 1: Reach a cumulative 50% (additional 25%).
- End of Year 2: Reach a cumulative 75% (additional 25%).
- End of Year 3: Complete the final 25% (reaching 100% of the required capital).
You must submit official bank evidence of each inward remittance (Credit Advice / Foreign Exchange Transaction form) to the Department of Business Development (DBD) within 15 days of the transfer date.
C. Staffing & Work Permit Ratios
To sponsor Non-Immigrant B visas and work permits for foreign employees, your branch office must hire 4 local Thai workers for every 1 foreign specialist. These 4 Thai employees must be actively registered with the Social Security Office (SSO). Furthermore, you must show proof of monthly SSO contribution payments for at least 3 consecutive months prior to sponsoring a foreign work permit.
Every foreign work permit requires THB 3 million in remitted foreign working capital. So, if you have two foreigners employed under your branch office, you need to remit an additional THB 3 million + 4 (total of 8) Thai workers in your company.
Exceptions: If your entity holds specialized investment status (e.g. BOI promotion or specific regional office privileges), the 4:1 ratio is reduced or waived entirely for technical experts and executives.
D. Resident Branch Manager
Your foreign parent company must issue a formal Power of Attorney (POA) appointing at least one resident Branch Manager in Thailand. This representative manages day-to-day operations and signs regulatory filings on behalf of the head office.
How to Set Up Your Thai Branch Office
To set up a branch office in Thailand, you need to meet the requirements mentioned above and register with the DBD.
Step 1: Foreign Business License (FBL) Application
Submit a formal FBL application package to the Department of Business Development (DBD) within the Ministry of Commerce.
Your submission must include a detailed 3-year operational business plan outlining:
- The exact scope of commercial or service activities.
- Projected capital expenditure and inward remittance schedules.
- Technology transfer programs designed to upskill local Thai staff.
- Employment targets for local Thai headcount.
The DBD and Foreign Business Committee review applications individually. Statutory approval typically takes 4 to 6 months.
Regulatory Update: Thailand deposited its instrument of accession to the Hague Apostille Convention on 30 June 2026. The Convention officially enters into force for Thailand on 28 February 2027. Until 28 February 2027, the traditional multi-tier consular legalization chain remains mandatory for all foreign public and corporate documents submitted to Thai authorities.
Step 2: Document Legalization and Translation
Prepare your parent company’s core corporate documents:
- Certificate of Incorporation and Memorandum & Articles of Association.
- List of current directors and major shareholders.
- Audited financial statements for the past 3 fiscal years.
- Formal Power of Attorney (POA) appointing the resident Branch Manager.
For all filings processed before 28 February 2027, corporate documents must complete the standard legalization chain:
- Notarization by a registered Public Notary in your home country.
- Authentication by the Ministry of Foreign Affairs (or equivalent authority) in your home country.
- Legalization by the Royal Thai Embassy or Consulate in your home country.
- Certified translation into Thai by an accredited translator.
(Note: Starting 28 February 2027, a single Hague Apostille issued in your home country will replace steps 2 and 3).
Step 3: Account Setup and Inward Remittance
Once the DBD grants your FBL, you can open a corporate bank account in Thailand under the registered branch name.
You must remit the initial 25% capital installment (minimum THB 750,000) directly from the parent head office's overseas bank account. You will need to obtain a Credit Advice or Foreign Exchange Transaction (FET) from the bank to confirm the inward foreign currency transfer.
You must report this as proof of transfer to the DBD within 15 days of remittance.
Step 4: Tax and SSO Registration
Within 60 days of license issuance or commercial startup, you must complete your local tax and employment registrations:
- Tax Identification Number: Register with the Revenue Department to receive a Corporate Income Tax (CIT) ID.
- Value Added Tax (VAT): Register for VAT if your branch expects annual revenue to exceed THB 1.8 million.
- Social Security Office (SSO): Register the branch as an employer with the SSO before hiring local staff or sponsoring foreign work permits.
Operating a branch office involves specific corporate tax obligations, repatriation levies, and legal liabilities that foreign parent companies must evaluate.
Taxes, Liability, and Potential Drawbacks
Operating a branch office involves specific corporate tax obligations, repatriation levies, and legal liabilities that you must take into consideration.
Corporate Income Tax (CIT)
Thai branch offices pay a standard 20% Corporate Income Tax (CIT) on net profits derived from business operations within Thailand. You must pay two CIT returns every fiscal year:
- An interim half-year return (Form PND 51) within 2 months of the mid-year point.
- An annual audited return (Form PND 50) within 150 days of your fiscal year-end.
Unlike Thai limited companies (which pay CIT on worldwide income), a foreign branch office pays CIT solely on locally sourced revenue.
You can read more about corporate tax compliance in Thailand. In this guide, we outlined what are your tax obligations and deadlines as a corporate entity in the country.
Profit Remittance Tax and Transfer Pricing
When transferring after-tax profits from your Thai branch back to your head office, you must pay a mandatory 10% profit remittance tax. This is in compliance with Section 70 bis of the Thai Revenue Code. It means, your effective corporate tax rate is 28% from 20% CIT on net profit followed by a 10% tax on the remaining 80%.
The Thai Revenue Department closely audits intercompany transactions between a foreign parent entity and its Thai branch. Management fee allocations, software licensing, and administrative cost-recharges must follow strict arm's-length principles. Unsubstantiated overhead allocations assigned to the Thai branch are frequently disallowed as tax-deductible expenses.
Double Tax Agreements (DTAs): Most DTAs preserve Thailand's right to levy profit remittance tax under Section 70 of the Thai Revenue Code. However, there are exceptions such as the Thailand-Hong Kong DTA, which exempts head-office profit transfers under specific permanent establishment rules.
Unlimited Global Liability
Because a branch office is not a separate legal entity, it does not provide liability protection for the parent company. Any contractual debts, labor claims, regulatory penalties, or legal liabilities incurred by the branch in Thailand extend directly to the overseas parent company's global balance sheet.
Is a Branch Office Right for Your Business?
A branch office acts as a direct operational arm of an overseas head office rather than a separate legal entity. Unlike a subsidiary, it is not an independent legal entity. Instead, its parent company remains fully liable for all operations and activities.
Branch Office vs Other Business Structures
Here is how a branch office is compared to other business structures you can establish as a foreigner in Thailand:
| Metric | Branch Office | Thai Limited Company | Representative Office |
|---|---|---|---|
| Legal Personality | Extension of parent entity | Standalone local juristic person | Extension of parent entity |
| Parent Company Liability | Unlimited (100% parent exposure) | Limited to unpaid share capital | Unlimited (100% parent exposure) |
| Revenue Generation | Allowed (Subject to FBL approval) | Allowed | Prohibited (Non-commercial only) |
| Minimum Capital | THB 3 million per restricted activity or 25% of average estimated yearly expenses over 3 years. | THB 2 million per foreign work permit | THB 2 million |
| Foreign Business License (FBL) | Required for List 2 and List 3 FBA activities | Required if foreign equity exceeds 49.99% | Exempt for standard non-commercial duties |
A branch office in Thailand is common for sectors like banking, insurance, and specific industries where it's preferable to have direct control over operations. This structure is also suitable for short-term projects or market testing.
For example, a Singapore subsea engineering firm wins a 4-year contract with a Thai state energy enterprise to maintain underwater pipelines. By registering a branch office, the firm contracts directly using its global track record, maintains 100% parent control, and bills the state enterprise locally.
Setting Up Your Branch Office with Emerhub
Emerhub serves as your on-the-ground market entry partner, managing the complete setup process on your behalf. During the initial phases, we will evaluate your operational plan whether a branch office suits your operations. Once confirmed, we will handle all submissions to the DBD to secure your FBL.
To streamline the incorporation process, we will coordinate the document legalization chain through our network of local notaries and certified translators. Once you receive your FBL, we will handle tax registration, bank account set up, and visa management for your foreign staff.
Contact our local compliance experts in Thailand to establish your own branch office in Thailand.
Frequently asked questions
Can a foreign branch office in Thailand generate revenue?
Unlike a non-commercial Representative Office, a Branch Office can conduct commercial activities, execute business contracts, issue invoices, and generate profits in Thailand. These operations must align with its approved Foreign Business License (FBL).
How much minimum capital is required for a Branch Office?
Branch offices operating restricted commercial or service activities under the Foreign Business Act must remit a minimum working capital of THB 3 million per activity or 25% of the average estimated operating expenses over the first 3 years, whichever is higher. This capital must be remitted directly from the parent company's overseas bank account in four statutory stages: 25% within the first 3 months, 50% by Year 1, 75% by Year 2, and 100% by Year 3.
What are the main tax rates for a Thai Branch Office?
A branch office pays a 20% Corporate Income Tax (CIT) on net profits generated in Thailand. When transferring after-tax profits back to the overseas head office, an additional 10% profit remittance tax applies under Section 70 bis of the Revenue Code, creating an effective corporate tax rate of 28% on repatriated earnings.
Is the parent company legally liable for the branch's operations?
A branch office has no separate legal entity status under Thai law. The foreign parent company retains 100% unlimited legal and financial liability for all contractual obligations, tax liabilities, and debt claims incurred by the local Thai branch.
What is the Thai-to-foreign worker hiring ratio for visa sponsorship?
To sponsor a Non-Immigrant B visa and Work Permit for a foreign employee, your branch office must hire 4 local Thai workers for every 1 foreign worker. These Thai employees must be registered with the Social Security Office (SSO), and each foreign work permit requires THB 3 million in remitted foreign working capital.
How long does it take to set up a Branch Office in Thailand?
The entire registration workflow typically takes 4 to 6 months. The primary factor in this timeline is the regulatory review and approval process for the Foreign Business License (FBL) by the Department of Business Development (DBD).