Are you planning to control your subsidiaries or associated enterprises located worldwide from Thailand? Register a Regional Operating Headquarter or ROH in Thailand to do so and avail the Board of Investment (BOI) promotions in Thailand. To Register your ROH in Thailand, we can help you throughout the process after you check your eligibility to have so from this article.
Conditions: Regional Operating Headquarter (ROH) in Thailand
To register a Regional Operating Headquarter in Thailand, it must comply with the following conditions:
a. No. of Associated Enterprises/Subsidiaries worldwide
To be eligible to obtain recognition as Regional Operating Headquarters in Thailand, the company must have associated companies or subsidiaries in countries outside Thailand in the following order:
- One associated enterprise/subsidiary by the end of the 1st and 2nd Accounting period.
- Two associated enterprises/subsidiaries by the end of the 3rd and 4th Accounting period.
- Five associated enterprises/subsidiaries by the end of the 5th Accounting period onwards.
b. Paid-up Capital and Spending
- The organization must have a paid-up capital of 10 million THB at the end of each accounting period.
- An ROH must have a total business spending of at least 15 million THB per year which must be the total operating costs in Thailand excluding any type of expense made overseas.
- The business must have a total investment spending or actual payment of at least 30 million THB annually.
c. The associated enterprises or subsidiaries must have actual business operations with a physical office, management, and employees working for the same.
d. The overall strength of the skilled staff must be maintained at 75% of the total employees by the end of the 3rd accounting period.
e. Average remuneration for at least 5 employees must be at least 2.5 million THB per annum by the end of the 3rd accounting period.
Benefits of Registering ROH in Thailand
On registering a Regional Operating Headquarter in Thailand, both the business and the expatriate founder benefit individually.
Benefits for the Business
- Exemption from corporate income tax (CIT) on net profits for income. It must be derived from services provided to foreign branches or associated enterprises of the registered operator for 10 years.
- A 10% CIT rate on net profits for income derived. The income should be from services provided to domestic branches or associated enterprises of the registered operator for 10 years.
- A 10% CIT rate on net profits for qualified royalties for 10 years.
- A 10% CIT rate on interest received from foreign branches or associated enterprises of the registered operator for loans granted. Note that such loans must be from other sources and extended to the registered operator’s branches or associated enterprises for 10 years.
- Exemption from CIT for dividends received by the registered operator from associated enterprises incorporated abroad for 10 years.
- Exemption from CIT for dividends paid out of the registered operator’s concessionary profits to its juristic shareholders incorporated abroad and not carrying on business in Thailand for 10 years.
Benefits for the Expatriate
- Expatriates can choose from a tax rate of 15% on their remuneration. It must be derived from the registered operating headquarters (ROH) for eight consecutive years.
- Tax exemption in Thailand on income paid by a foreign company for services rendered abroad. To be eligible for this, there should not be any direct/indirect deduction as an expense of the ROH or its associated enterprises in Thailand. This applies to expatriates planning to work in another country the ROH.
The Bottomline
A company can apply for an extension of the ROH privilege for five more accounting periods. This is possible only if it meets all the required criteria in each accounting period. Furthermore, it must accumulate business spending of more than 150 million THB by the end of the 10th accounting period.
As the name itself, a “Regional Operating Headquarters” provides big benefits for expatriates in Thailand. If you are a foreign investor and planning to set up your business as an ROH in Thailand, feel free to write to us at [email protected] and book your round of free consultation with us.
