Establishing a Regional Operating Headquarters in Thailand

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What is a Regional Operating Headquarters?

Regional Operating Headquarters (ROHs) in Thailand serve as strategic hubs for businesses, offering a range of qualifying services to branches or associated companies locally and internationally. They benefit from significant tax incentives provided by the government to attract investors. To establish an ROH, investors can take advantage of the tax incentives provided by the Thai government, as well as apply for non-tax incentives through the Board of Investment (BOI).

The approval process for foreign business operations under the FBA involves evaluating their impact on various factors, including national security, economic and social development, public order, environmental conservation, consumer protection, and enterprise scale.

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Key Things to Consider:

ROHs benefit from significant tax incentives in Thailand. The corporate income tax rate is reduced from 30% to 10% on net profits from offshore branches and associated companies. Dividends received from domestic or foreign subsidiaries are exempt from taxation, and dividends paid to foreign companies not operating in Thailand are exempt from withholding tax. Expatriates working with Regional Operating Headquarters enjoy a reduced personal income tax rate of 15% on salaries, rather than the progressive rate ranging from 5% to 37%. Additionally, Regional Operating Headquarters receive an initial allowance of 25% for buildings acquired.

Additional Information:

  1. To qualify, Regional Operating Headquarters must meet certain criteria, including being incorporated under Thai law, having a minimum paid-up capitalization of 10 million baht, and providing services to branches or companies in at least three countries.
  2. Qualifying services provided by Regional Operating Headquarters include organizational administration, sourcing, research and development, technical support, marketing, human resources training, business advisory, investment feasibility studies, credit management, and other approved services.
  3. Investors seeking non-tax incentives can apply directly to the Board of Investment (BOI), which may grant permissions such as land ownership, bringing in foreign experts, and facilitating work permits and visas.

FAQ

What is a Regional Operating Headquarters (ROH) in Thailand?

 A Regional Operating Headquarters (ROH) is a juristic company incorporated in Thailand that provides managerial, administrative, technical, and supporting services to its foreign branches or associated enterprises. It serves as a strategic hub for coordinating and directing operations within the region.

ROH incorporated in Thailand enjoys several tax privileges, including corporate income tax at a rate of 10 percent on net profits derived from services provided to foreign branches or associated enterprises, tax exemption for dividends received from associated enterprises, and accelerated depreciation for buildings at the rate of 25 percent on the date of acquisition, among others.

 To qualify for tax privileges, ROH must meet certain criteria, including having paid-up capital of not less than 10 Million Baht, providing services to branches or associated enterprises in at least three countries, and deriving half of its total income from eligible services provided to foreign branches or associated enterprises.

 An existing Thai incorporated company wishing to become an ROH must notify the Revenue Department by submitting the notification form. Additionally, if the company is subject to the Foreign Business Act (FBA) 1999, it must request an amendment to its scope of business to cover ROH activities. Once approved, the company will start its operation as an ROH and gain tax privileges.

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