In order to promote Thailand as a commercial centre, the Prime Minister's Office passed a regulation in 1992 facilitating the formation of Regional Offices of multinational corporations within Thailand.
A Regional Office has the right to co-ordinate and supervise the company's branches and its affiliated companies in the region on behalf of the head office. The Regional Office may provide their branches and affiliated companies with:-
1. advisory and management services;
2. financial management services;
3. training and personnel development services;
4. product development;
5. marketing control and sales promotion plans; and
6. research and development services.
Companies establishing Regional Offices are not required to be registered or incorporated as juristic person in Thailand, and do not have to submit any financial statement.
A Regional Office must not:-
- derive an income from its activities. Expenditures incurred by the regional office shall be borne by the Head Office.
- have power to accept a purchase order or to make a sales offers.
- negotiate or enter into business arrangements with any natural or juristic person in Thailand.
A permit to establish a Regional Office is valid for 5 years. Financial conditions as to the extent of debt financing used in the business and the amounts of funds to be remitted from outside Thailand may be imposed. At least one person responsible for operating the Regional Office must have their residence in Thailand.
NOTE: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
If you would like further advice please contact: David Ellis, Johnson Stokes & Master, 16th Floor, Princes Building, 10 Chater Road, Hong Kong; Tel 2843 4226; Fax no. : 2845 9121. Alternatively do a text search "Johnson Stokes and Master" and "Business Monitor".