Thai limited company, branch office or representative office: choosing the right structure for foreign companies in 2026

Settlr GlobalNov 5, 202610 min read

A foreign company entering Thailand in 2026 should generally use a Thai limited company when the Thai operation will earn revenue and the parent wants liability kept inside Thailand. A branch office suits a parent that wants to trade in its own name and accept full liability. A representative office suits a presence that will never invoice anyone.

Three questions decide the choice: whether the Thai arm will earn revenue, whether its activity sits on the Foreign Business Act's restricted lists, and how much liability the parent will carry.

Key takeaways

A Thai limited company is a separate legal entity. Branch and representative offices are extensions of the foreign parent, and the parent bears full liability for them.
A representative office cannot earn revenue and is limited to a short list of permitted activities such as market research and sourcing. Its head office funding is generally untaxed if it serves only its head office, but buying goods for export can count as a taxable sale unless the head office is in a tax treaty country[1].
Limited companies pay corporate income tax at the standard 20% rate, with lower rates for small companies with paid-up capital under THB 5 million. Branches pay 20% on profit from business carried on in Thailand, and a foreign company sending profit out of Thailand pays a further 10% on the amount sent[2].
Foreign-majority companies and branches generally need a Foreign Business License or BOI promotion for restricted activities. Qualifying US companies can also use the Treaty of Amity.
An overseas company that only needs a few staff can hire through an employer of record before it commits to any structure.

About the Author

This guide was prepared by Settlr Global's incorporation and legal advisory team, led by Managing Director Gagan Ajmani, who has 15+ years of regional experience across Southeast Asia. As the operating arm of WOWS Global, the team structures Thai entities, licences and work permits for foreign founders.

What is the difference between a Thai limited company, a branch office and a representative office?

The core difference is legal personality. A Thai limited company is a new Thai juristic person. A branch office and a representative office are both extensions of the foreign parent.

Feature	Thai limited company	Branch office	Representative office
Legal status	Separate Thai legal entity	Extension of the foreign parent	Extension of the foreign parent
Liability	Held by the company	Parent bears full liability	Parent bears full liability
Can earn revenue in Thailand	Yes	Yes	No
Corporate income tax	Standard 20% rate, with lower rates for small companies	20% on profit from business carried on in Thailand, plus 10% on profit sent out of Thailand	Head office funding generally untaxed if it serves only its head office; files annual returns [2]
Foreign ownership	Foreign stake generally kept at 49% or less without a licence, BOI promotion or Amity status	Wholly foreign; restricted activities generally need a licence or BOI promotion	Wholly foreign; limited to permitted non-revenue activities
Minimum capital	No fixed statutory minimum if foreigners hold under half; at least THB 2 million if foreign-majority, or at least THB 3 million for each licensed business	At least THB 3 million for each licensed business	At least THB 2 million [3]

These are general 2026 requirements and are subject to change, so a company should confirm current rules with the Department of Business Development (DBD) and the Revenue Department before filing.

Why does liability push many foreign companies toward a limited company?

Liability is where the legal personality difference turns into a real cost. A branch has no existence separate from its parent so a Thai landlord, supplier or employee with a claim against the branch is in effect claiming against the parent and its assets.

A limited company signs its own contracts and carries its own debts. The parent's exposure as a shareholder is generally limited to the capital it has committed.

A branch is often assumed to be the lighter option. For restricted activities, a branch generally faces the same licensing and capital requirements as a foreign-majority company and adds full parent liability on top. It tends to fit large parents whose Thai customers want to contract directly with the parent's balance sheet. If the parent cannot accept open-ended exposure in Thailand, the branch should be ruled out first.

How are the three structures taxed in Thailand?

Tax treatment follows the same split between structures that earn revenue and structures that do not. According to the Revenue Department, the standard corporate income tax rate is 20% on net profit.

A Thai limited company pays corporate income tax at 20% and handles VAT and withholding tax obligations.
A branch office pays corporate income tax at 20% on profit from business carried on in Thailand, pays a further 10% on profit sent out of Thailand (Form PND 54) and handles VAT and withholding tax[2].
A representative office that serves only its head office and is funded by it is generally not taxed on those funds, but buying goods for export to its head office counts as a taxable sale unless the head office is in a tax treaty country, and serving anyone else makes the income taxable. It should still file annual returns and financial statements[1].

An exemption still leaves deadlines to meet. A representative office that employs staff also has payroll withholding duties. Filing dates for returns such as PND 50 and PP 30 are mapped in the Thailand Tax Calendar 2026. The accounting and tax services page covers bookkeeping, month-end close and monthly VAT and withholding tax filings.

Which structure can carry out restricted business activities?

The Foreign Business Act decides whether a foreign company may do the work at all. Under the Act, which the Ministry of Commerce administers, foreign-majority limited companies and branches are generally restricted from listed activities unless they hold a Foreign Business License or BOI promotion[3]. For this reason, a limited company without a licence typically keeps foreign ownership at or below 49%.

A Foreign Business License for a specific activity, granted at the Ministry of Commerce's discretion and never guaranteed.
BOI promotion for eligible activities. See BOI company registration in Thailand.
US Treaty of Amity status, which lets qualifying American companies hold majority or full ownership for many activities[4]. See US Treaty of Amity companies in Thailand.

A representative office cannot generate revenue, so taking orders falls outside its permitted activities. Holding shares through Thai nominees to stay under half is an offence under section 36 of the same Act, with up to 3 years' imprisonment or a fine of THB 100,000 to THB 1 million or both for the nominee and the foreigner, so a legal advisory review of shareholder structures for this risk before filing is advisable[3]. Check the activity against the Act's lists early, because the answer can rule out two of the three options.

What does each structure need before it can hire foreign staff?

A branch carries at least THB 3 million for each licensed activity, remitted from abroad in stages: at least 25 percent within the first three months, 50 percent within one year and at least 25 percent a year after that. A representative office in international trade carries the THB 2 million Foreign Business Act minimum. A limited company with foreign shareholders under half has no fixed statutory minimum, while a foreign-majority company carries the same Foreign Business Act minimums, and the immigration capital conditions apply separately[4].

Thai authorities decide every application, so no route is guaranteed. The headcount plan should be built alongside the structure decision. The visa and work permit services page lists the documents each route needs.

How should a foreign company choose the right structure in 2026?

The liability, tax, licensing and hiring points combine into a short decision sequence.

Step 1: Decide whether the Thai operation will invoice Thai customers. If it will not, a representative office may be enough.
Step 2: Check the activity against the Foreign Business Act lists. If it is restricted, compare a Foreign Business License, BOI promotion and Treaty of Amity status.
Step 3: Decide how much liability the parent will accept. Unlimited exposure points away from a branch.
Step 4: Map the hiring plan against the staffing ratio and capital requirements: generally 4 Thai employees per foreigner and THB 2 million paid-up capital, with 1 Thai employee per foreigner and no capital condition for representative offices and branches of multinational companies[5].
Step 5: Decide whether an entity is needed yet, or whether an employer of record can cover the first hires.

A branch needs longer if a Foreign Business License is required, with a 60-day statutory decision period and the license issued within 15 days of approval. A representative office in international trade has not needed a Foreign Business License since 9 June 2017[6].

With Settlr Global, for example, an overseas company can make its first employer of record hire in Thailand in about 2 days, starting from 1 employee. Pricing starts from THB 8,999 per employee per month for a local hire and from THB 10,999 for an expat hire. Incorporation can run in parallel. The Thailand Business Setup Guide covers the documents for each route.

Frequently asked questions

Can a foreigner own 100% of a Thai limited company?

Generally only if the activity is not restricted under the Foreign Business Act, or if the company holds a Foreign Business License, BOI promotion or US Treaty of Amity status. The relevant authority decides each approval, and none is guaranteed.

Can a representative office be converted into a limited company?

Confirm the route with the DBD. A common approach is for the parent to incorporate a new limited company and then close the representative office. You should plan the overlap in staff, leases and work permits.

Can a representative office employ foreign staff?

It can, provided each foreign employee holds a Non-Immigrant B visa and a work permit. For permission to stay, Immigration Bureau Order 12/2568 exempts an international trade representative office from the THB 2 million paid-up capital condition and eases the staffing ratio to 1 Thai employee per foreigner[5].

How long does company registration in Thailand take in 2026?

Timing for company registration in Thailand generally depends on document preparation, translations and whether a Foreign Business License is needed. DBD publishes a service time of 1 hour 25 minutes for registration in the general case, and a Foreign Business License has a 60-day decision period[7].

Can you hire employees in Thailand without a local entity?

You can, through an employer of record in Thailand. The employer of record acts as the legal employer while you direct the day-to-day work.

Can a founder scout Thailand on a DTV before choosing a structure?

The Destination Thailand Visa is designed for remote workers and certain other activities. It is generally not a basis for working for a Thai company, which typically requires a Non-B visa and a work permit. Thai authorities decide eligibility, and the DTV visa guide covers the 2026 requirements.

About Settlr Global

Settlr Global is the operating arm of WOWS Global, a Singapore-incorporated corporate advisory and investment banking group, and an all-in-one platform for company setup, accounting and tax, payroll, visas and Employer of Record in Thailand. It brings those services under a single team, so founders do not have to coordinate separate local agencies. The platform has processed payroll and compliance work for 200+ clients across 15+ countries, from early-stage startups to established multinational enterprises. Its Employer of Record service lets companies hire in Thailand in about two days, with or without a local entity.

To compare a limited company, branch office and representative office against your activity and hiring plan, speak with the Settlr Global team.

References

Revenue Department notice on income tax and business tax for representative offices (in Thai) (rd.go.th)
Revenue Department of Thailand, Corporate Income Tax (rd.go.th)
Foreign Business Act B.E. 2542, s.14 (DBD translation on boi.go.th) (boi.go.th)
DBD manual on Foreign Business licenses and certificates, section 3.1 (in Thai) (dbd.go.th)
Immigration Bureau Order 12/2568, 23 January 2025, clause 2.1 (in Thai) (chiangrai.immigration.go.th)
Foreign Business Commission Annual Report 2017, DBD, reprinting Ministerial Regulation No. 3 B.E. 2560 (dbd.go.th)
DBD registration manual (in Thai) (dbd.go.th)