There is no version of hiring in Thailand where nobody is the employer.
Someone has to be registered here to run payroll, withhold personal income tax, register the employee with social security within thirty days of their start date, and file every month. A company that exists only abroad cannot do any of that. So the real question is not whether you need a presence in Thailand. It is whose presence you use, and what that choice costs you.
There are four answers, and they suit very different situations.
The four routes
A Thai limited company. The full option. It can sign contracts, invoice clients, hire whoever it likes and sponsor work permits. The catch is ownership. Foreign investors are generally capped at 49 percent of a company operating in a restricted sector, which covers most services: consulting, advertising, construction, retail and more. Going above that means a foreign business licence, promotion from the Board of Investment, or a treaty route, each with its own conditions and timelines.
A branch office. An extension of the parent company rather than a separate one. It can trade and hire, but the parent carries the liability for everything it does, and it cannot hold Board of Investment promotion.
A representative office. The one most often misunderstood, and the subject of the next section.
An employer of record. A company already established in Thailand employs the person for you. They are on that company’s payroll, its social security registration and its tax filings, while doing their day to day work for you. No entity, no incorporation, and people can start in weeks rather than months.
What a representative office can and cannot do
Companies reach for a representative office because it sounds like the light version of a company. It is lighter, but it is also narrow, and the boundaries are real.
A representative office may do five things for its head office: source goods or services in Thailand, inspect quality and quantity, advise on the head office’s products, promote new products and services, and report on market conditions.
What it may not do matters more. It cannot earn revenue. It cannot accept purchase orders, sign contracts on behalf of the head office, provide after sales service or act as an agent. Every baht it spends must come from the head office.
The numbers are not trivial either. Minimum capitalisation is three million baht, paid in stages over three years, a quarter within the first three months. That capital supports only a small number of foreign work permits.
The upside is genuine. Because it earns nothing, it pays no corporate income tax, though it still has to withhold employee tax, pay social security and file like any other employer.
So a representative office suits a company that wants people on the ground looking, checking and reporting. It does not suit a company that wants people on the ground selling. If your plan involves revenue, this is the wrong structure, and using it anyway is the kind of thing that surfaces during a tax audit rather than at setup.
What an employer of record solves, and what it does not
An employer of record is the fastest route into Thailand, and for a first hire or two it is usually the sensible one. You avoid incorporation, minimum capital and the ownership question entirely, and you can reverse the decision cheaply if the market does not work out.
Three things it does not solve.
It does not cover foreign hires. An employer of record is for local hires: Thai nationals and others already entitled to work in Thailand. A work permit attaches to the company that genuinely employs the foreign national, and is tested against that company’s own Thai headcount and capital at every renewal. If the person you want is a foreign national, the work permit question decides the structure, and it usually points to your own entity.
It does not put you outside Thai tax. This is the one most companies underestimate. Thai tax authorities look at substance rather than paperwork. If your company directs the work, sets the targets, reviews performance and carries the commercial risk, you may be treated as the real employer, and your business may be found to have a taxable presence in Thailand regardless of whose payslip the employee receives. The risk rises with sales roles, with anyone who negotiates or concludes contracts, and with a fixed office you control.
It does not license you to do restricted business. The rules on what foreign companies may do in Thailand apply to the activity, not to the employment paperwork. If the work itself falls in a restricted category, hiring someone to do it through a third party does not change that.
How to choose
Testing the market, one or two people, nothing being sold yet. An employer of record. Fast, reversible, and the tax exposure is limited when the roles are support rather than revenue.
Looking, checking and reporting, with no revenue in Thailand. A representative office is built for exactly this and pays no corporate income tax. Budget the three million baht.
Selling, contracting or invoicing in Thailand. A company or a branch. An employer of record will get your first salespeople started, but once they are closing deals you are carrying tax risk rather than avoiding it.
More than a handful of people, or a long term commitment. A Thai limited company. At some headcount the employer of record fee per person passes the cost of running your own entity, and an entity gives you control of your work permit quota.
A practical sequence works for many companies: start with an employer of record to get moving, then incorporate once the headcount or the revenue makes it worthwhile, and move people across. That is a normal path, not a failure of planning. What causes problems is the opposite: staying on an employer of record while quietly building a sales operation, which is exactly the pattern that draws attention.
What to check before you commit
Be honest about what the role does. A support role and a revenue role carry different tax exposure, whatever the contract says.
Check the work permit position before you make an offer to any foreign national, not after.
If you use a representative office, keep it inside its five permitted activities. The prohibitions are specific and they are enforced.
Plan the handover early. Moving employees from an employer of record to your own company means new contracts, new social security registration and continuity of service questions. Easier to plan at the start than to unpick later.
Where this sits in our work
People Profilers Thailand employs people on your behalf through People Profilers Bangkok Recruitment Co., Ltd., licensed by the Department of Employment under Licence น.1830/2565. The employment contract, payroll, withholding, social security and filings sit with us. Direction of the work stays with you.
Our part is doing the employer side properly and telling you plainly where the limits are, including when an employer of record is the wrong answer and you would be better off incorporating.
If you are weighing this up, our employer of record service in Thailand covers the employment side. If the hire is a foreign national, read our article on the ratio, the capital and what gets missed at renewal first, since the work permit question is decided by the sponsoring entity. And for the cost of employing someone here, what it really costs to employ staff in Thailand has the statutory figures.
Sources
Verified September 2026. Rules and thresholds change, so confirm before relying on any of this.
- Foreign ownership generally capped at 49 percent for restricted businesses, the three-list structure, and the licence, treaty and Board of Investment exemptions: Dej-Udom & Associates
- Differences between a Thai limited company, a branch office and a representative office, including that a branch cannot hold Board of Investment promotion and that a representative office cannot invoice, sign revenue contracts or act as an agent: GoGlobal
- The five permitted representative office activities, the prohibited activities, minimum capitalisation of three million baht with the staged payment schedule, the small work permit entitlement, and exemption from corporate income tax: Siam Legal International, cross-checked against RBA Asia
- Employer of record definition, and the substance over form analysis under which a foreign company directing the work and bearing the risk may be treated as the economic employer and found to have a taxable presence: Forvis Mazars Thailand
- Employer registration with the Social Security Office within thirty days of the employee’s start date, and monthly filing by the fifteenth of the following month: Acclime Thailand
