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Branch Office
A Branch Office is a great way for foreign companies to enter the Cambodian market with a 100% foreign owned vehicle and earn revenue from their derived business.
Branch offices in Cambodia may engage in activities that generate revenue and be entitled to the same tax treatment as a limited company.
What is a Branch Office in Cambodia?
A branch office is granted the right to conduct commercial activities and earn revenue in Cambodia. Branches can buy and sell goods, enter into contracts, render services, and generally undertake everything that a regular Cambodian business can. Please note that, branch offices cannot engage in any Qualified Investment Projects (QIPs) for which tax incentives are available.
Branch offices are not separate legal entities from their foreign parent company; therefore, the parent company will be liable for the branch’s debts and obligations.
It is important to note that the branch name must be the same as the parent company and must have the words Branch above or in front of the name.
• Foreign ownership
100% foreign ownership is possible.
• Business Activities
Unrestricted business activities (except QIP).
• Legal status of a Branch Office
Same legal entity as their parent company
• Minimum Capital Requirements
N/A
• Business Restrictions
Cannot engage in QIP activities
• Hiring of Foreign employees
It is possible to hire foreign staff.
Pricing
FROM
USD 1,000 *
+ 10% VAT
About 20 days
(Average time from the moment
we receive complete information from you)
* Official Fee:
USD 1,350 (USD 650 Ministry of Commerce & USD 560 USD Tax Registration)
Application handled by a corporate expert.Scope of work
- Prepare and file documents with the relevant Government Departments to register the Branch Office. This includes collecting and collating the required documents from the parent company and any required information about the Branch Office.
- Preparing the constitutional documents for registering a Branch Office (and English translation).
- Answering questions in relation to the Branch Office setup during this setup process.
- Advising you on the post registration duties to ensure a smooth business operation.
Need more?
Additional services that you may need
- Shareholder Agreement From USD 1000
- Monthly & Accounting and Tax filings From USD 100
What is the process for registering a Branch Office?
Collecting documents and filing the application
Our team of experts will collect, collate and fill in all the required documents, ready for your signature.
TIME LINE
A few days* to collect documents from the parties and prepare the application.
Registration of the Branch Office
Our team of experts will file all the documents and application forms with the relevant Government Departments; Ministry of Commerce (MOC), General Department of Taxation (GDT) and Ministry of Labour and Vocational Training (MLVT).
- Registering the branch office with the MOC.
- Register the branch office for tax with the GDT (General Department of Taxation).
- Register the branch office with the National Social Security Fund registration at MLVT.
TIME LINE
The whole process of registering a limited company usually takes around 30 days
Post-registration requirements
Our experts can assist with you the next necessary steps to start your business:
- Work Permit for foreign employees
- Open a corporate bank account
Frequently asked questions
What are the advantages of a Branch Office in Thailand?
There are 2 clear advantages to setting up a Branch Office in Thailand. Firstly, the lower requirements needed to obtain a work permit . Secondly, the ability to generate income in Thailand without having to set up a Joint Venture with a local partner.
Branch Offices are able to support one work permit per foreign employee with only one Thai employee (the ratio for a limited company is 4 Thai employees per foreign employee except if the company has obtained a promotion from the Board of Investment).
As the Branch Office is able to generate income in Thailand, it is subject to corporate income tax (20%). The employees are also still subject to the personal income withholding tax on their salaries, this also applies to normal Thai companies as well.
How to obtain a work permit for a Branch Office?
Work Permit for the authorized director of a Branch Office
The foreign authorized director of a Branch Office must obtain a work permit unless the Branch office holds a Foreign Business License. If the Branch Office is considered restricted under the Foreign Business Act, a Foreign Business License will be required anyway. Obtaining a Foreign Business License usually takes between 4 to 6 months and requires a minimum capital investment of 3 million Baht, as opposed to the 2 million Baht required for an unrestricted business.
Work Permit for the director and employees of a Branch Office
To support a work permit for a Branch Office in Thailand, there is a minimum of 3 million Baht and one Thai employee.
Is a Branch Office allowed to generate any income?
A Branch Office may generate profit for the parent company. Branch Offices are governed by Section 17, List 3 (21) other business services of the Foreign Business Act B.E. 2542. The Foreign Business Act sets out the areas of the Thai market that a Branch Office can operate in as either a restricted or unrestricted business.
If the intended business activities are not restricted under the Foreign Business Act, all that is required is a commercial registration certificate from the Ministry of Commerce.
However, if the intended business activities are considered to be restricted business under the Foreign Business Act, a Foreign Business Licence must be obtained from the Ministry of Commerce.
As services activities are restricted under the FBA, a FBL will usually be required to open a Branch office.
What is the minimum investment?
A minimum capital of 2 million Baht for an unrestricted business and 3 million Baht for a restricted business is required. The minimum installments are as follows:
- No Less than 25% of 2 million Baht (3 million for restricted) must be transferred into the country within the first 3 months after approval.
- During the same year, at least 50% of the capital must be transferred.
- The remainder of the 25% of the capital must be transferred each year after that.
To hire a foreign employee, 3 million Baht must be fully transferred into the Thai bank account of the Branch Office and one Thai employee is required to support the work permit.
To hire a second foreigner, another 3 million Baht (a total of 6 million Baht) will have to be transferred and so on.
Branch Office vs Representative Office
Both Branch Offices and Representative Offices have the ratio of 1 Thai employee per foreign employee. However, unlike the Representative Office, a Branch Office is not restricted in the activities it can undertake, and can also earn revenue.
| REPRESENTATIVE OFFICE | BRANCH OFFICE | |
| Liability | No separate liability from the head office | No separate liability from the head office |
| Foreign ownership | Up to 100% | Up to 100% |
| Thai to foreign employee ratio | 1:1 | 1:1 |
| Corporate income tax rate | No corporate income tax | 20% |
| Business restrictions | Restricted to the business for which investment promotion is granted; Limited to 5 activities. Cannot generate income. | Able to conduct various activities regardless of whether or not they generate any income. |
| Reporting and audits | Annual accounting audit | Annual accounting audit |
| Timeline | 1 week | Unrestricted business – 1 Week Restricted business – 4 to 6 months |
Explore other structures
Question Before You Begin? *
Question Before You Begin? *
Speak to our expert by scheduling afree call on how to set up a Branch Office in Cambodia with Belaws.
(*) This consultation costs $150 for 1 hour and is intended to provide basic answers to questions you may have about how to set up a Branch Office. But it is not a Lawyer’s Consultation.
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