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Representative Offices and Foreign Business Licenses in Thailand

Transcript of the above video:

As the title to this video suggests, we are going to be discussing specifically the Representative Office Structure and the Foreign Business License here in the Kingdom of Thailand.

Now a preface to this video, I started researching this issue when I came upon some folks on the internet, specifically some of the social media who were asking me specifically about work permit requirements associated with Representative Offices here in the Kingdom. I would urge those individuals who are coming to this channel looking for that information specifically; I made another video on that specific topic which sort of delves into my analysis on where we stand on that. But this is specifically dealing with Foreign Business Licenses, so for those who are looking for information specifically on work permits, go check out that other video, but for now I am going to go through some rather interesting recent developments with respect to this.

I am quoting from the Phuketnews.com.  The title of the article is Phuket Law: Opening a Representative Office in Thailand Just got Easier. The author seems to be a Jerrold Kippen. Quoting directly, “Thailand has recently made the set-up process of such an office (a Representative Office) more investor friendly. Previously, prior to operating, the Representative Office was required to obtain a “Foreign Business License” because under the Foreign Business Act of 1999, its permitted activities were considered a “service” reserved for Thais and prohibited to foreigners without such exemption. This requirement has been abolished. Under Ministerial Regulation No. 3 “Prescribing Service Businesses Which Do Not Require a Foreign Business License” (2017) of the FBA, the operation of a Representative Office is no longer considered such a service.” So I would go ahead and check out this article by Mr. Kippen. There is a lot more detail in here.

I am just going to go ahead and make some quick commentary on Representative Offices generally. So this foreign business license requirement being abolished, I would say generally speaking that is overall a good thing for foreign investors or foreigners looking to do business here in the Kingdom. That being said, there is another video on this channel, we go in to it in more detail. Representative Offices have a high threshold of regulatory compliance to maintain because their activities in the Kingdom have to be exceptionally limited in order to maintain a presence here legally and operating outside of the scope of the activities prescribed by the Thai Governmental Authorities can result in serious, serious penalties as we noted in the other video on this channel. What is interesting to note about this article is this is specifically talking about Foreign Business License; we are not talking about work permits. In another video on this channel, I will go into work permits specifically but Representative Offices would seem to me, just to sort of make it short and sweet, what is going on in the other video, would seem to me to still require that the foreign national working in the Kingdom for one of these Representative offices would be required to obtain a work permit and I will go into my deeper analysis in another video on this channel so you can go check that out. But that being said, this article is interesting.  I urge folks to check out the Phuketnews.com and read this article in detail because you can see some of the more nuanced aspects of how this is going to work but as we have gone into in another video on this channel, the scope of the Representative Office’s activities is very, very limited oftentimes and for that reason, a Rep Office may not be a proper fit to a given enterprise being undertaken here in the Kingdom. That being said, there are certain activities that are certainly a very good fit for a Representative Office so this riddance if you will, of the Foreign Business License requirement, I can see this resulting in a spike of foreign direct investment in the Kingdom through the Representative Office structure, where warranted, and it could result it could result in generally a benefit to the economy In Thailand as a whole.