The corporate structure you choose in Thailand does not only determine tax exposure and liability -- it directly shapes how, and whether, you can legally hire foreign nationals and obtain work permits for them. A subsidiary and a branch office are not interchangeable from a work permit and Non-Immigrant B visa perspective, and conflating them at the planning stage routinely creates compliance problems that are expensive to fix later.
- Subsidiaries are separate Thai legal entities that act as the direct employer; branch offices extend a foreign parent and carry different liability and sponsorship implications for foreign hires.
- A Non-Immigrant B visa (Non-B) requires the sponsoring Thai entity to meet a registered capital threshold and a Thai-to-foreign employee ratio -- these rules apply regardless of whether the entity is a subsidiary or a branch.
- Work permit cost in Thailand depends on the permit category and salary level; always verify the current government fee through Issa Compass or a qualified adviser rather than relying on outdated figures.
- Applying for visas and work permits through the head office rather than a branch is the recommended practice for companies with multiple locations in Thailand.
- Entity choice affects more than just incorporation -- it affects every work permit application, every renewal, and every compliance audit down the line.
What Is the Core Legal Difference Between a Subsidiary and a Branch Office in Thailand?
Understanding this distinction is the foundation for every hiring decision that follows. A subsidiary is an independently incorporated Thai company -- a separate legal entity from its foreign parent, subject to Thai law, capable of entering contracts in its own name, and, crucially, capable of acting as the direct employer of record for foreign staff [3]. A branch office, by contrast, is not a separate legal entity; it is a registered extension of the foreign parent company operating within Thailand [2]. The parent company retains direct liability for the branch's actions.
From a foreign-hire standpoint, this distinction matters in two practical ways:
- A subsidiary can sponsor a work permit and a Non-Immigrant B visa directly as a Thai employer.
- A branch office can also sponsor work permits, but the foreign parent's involvement in the application process and its liability exposure are different because the branch has no independent corporate personality [5].
How Does Entity Type Affect Non-Immigrant B Visa Eligibility?
Building on the legal distinction above, the specific requirements for obtaining a Non-Immigrant B visa (Non-B) -- the visa category required for foreign nationals working in Thailand -- apply to the sponsoring entity regardless of whether it is a subsidiary or a branch. The two canonical requirements for the sponsoring company are:
- Registered capital of 2,000,000 THB per foreign employee to be sponsored.
- A 4:1 ratio of Thai to foreign employees -- four Thai nationals employed for every one foreign national.
Where entity type creates practical divergence is in how readily a company can meet these thresholds. A newly incorporated subsidiary may not yet have the paid-up registered capital or the Thai headcount to sponsor even one foreign employee at incorporation. A branch office, whose capital structure is tied to the foreign parent, may face a different challenge: demonstrating to Thai immigration that the local operation meets the capital requirement as measured in Thailand, separate from the parent's global balance sheet [6].
It is also worth noting that the 51% Thai ownership rule that many advisers mention in foreign-hiring contexts belongs to the Foreign Business Act (FBA), which governs which business activities a foreign-majority company can legally conduct in Thailand. The FBA is a distinct regulatory layer from the Non-B visa requirements and should be analysed separately when structuring your entity.
What Is the Work Permit Cost in Thailand, and Does Structure Affect It?
Stepping back from the structural details, a practical question every HR team asks early is: what will the work permit cost? The work permit cost in Thailand is a government fee set by the Department of Employment, and it is calculated based on the duration of the permit being issued rather than on the corporate structure sponsoring it [7]. In that sense, being a subsidiary versus a branch does not change the government fee itself.
What structure does affect is the total cost of compliance over time. A subsidiary that has cleanly met the capital and ratio requirements will typically face a more straightforward renewal cycle. A branch office that needs to re-demonstrate its relationship to the parent company with each renewal, or that operates across multiple provinces without a clear sponsoring entity strategy, may incur higher professional fees to manage the process.
For an all-inclusive Non-B work permit service, Issa Compass offers processing at a bundled price that includes government fees, service fees, VAT, document review, application tracking, and customer support for both in-country and out-of-country processing. Contact Issa Compass for the current fee breakdown for your permit category.
How Should Companies With Multiple Thai Locations Handle Work Permits?
A related but distinct challenge arises when a company operates both a head office and one or more branch locations within Thailand and needs to assign a foreign employee to a branch. The recommended best-practice strategy is to apply for the Non-B visa and work permit through the company's head office rather than a branch office. Once the visa and work permit are issued under the head office, the foreign employee can be assigned to and physically work at any of the company's branch locations without requiring a separate transfer process for the visa or work permit.
This approach avoids a common structural trap: applying for the work permit at the branch level, only to discover that the branch alone does not meet the capital or ratio thresholds, or that a subsequent transfer between locations triggers a fresh application cycle. HR teams planning international hires across multiple Thai locations should build this head-office-first principle into their onboarding workflow from the start.
Subsidiary vs. Branch: A Side-by-Side Comparison for Foreign Hiring
| Factor | Thai Subsidiary | Branch Office |
|---|---|---|
| Legal personality | Separate Thai legal entity [3] | Extension of foreign parent; no separate legal personality [2] |
| Employer of record | The subsidiary directly [3] | Technically the foreign parent through the branch [5] |
| Non-B capital requirement | 2,000,000 THB per foreign employee | Same threshold applies to the local operation |
| Thai-to-foreign ratio | 4 Thai nationals per 1 foreign national | Same ratio applies |
| Liability for work permit violations | Subsidiary bears liability | Foreign parent bears liability through branch [2] |
| Multi-location work permit strategy | Apply at head office; assign to branches | Apply at head office; assign to branches |
| BOI / foreign-ownership options | Available via BOI promotion [4] | Limited; defer to adviser for current rules |
What Are the Most Common Structural Mistakes That Delay Work Permit Approval?
From a compliance standpoint, the following patterns consistently create delays across both entity types:
- Insufficient registered capital at the time of application. The 2,000,000 THB per foreign employee must be paid-up, not merely authorised. Entities that register with minimum paid-up capital and then attempt to sponsor a foreign hire without first increasing paid-up capital will be rejected.
- Thai headcount that only exists on paper. Thai immigration and the Department of Employment cross-reference payroll and social security records. A 4:1 ratio built on employees who are not on the social security roll will not satisfy the requirement.
- Applying at a branch rather than the head office. As noted above, this can fragment the capital and ratio calculation across entities, making it harder for any single unit to meet the threshold.
- Conflating FBA restrictions with Non-B requirements. These are separate legal frameworks. Failing to address both independently -- not just one -- is a recurring compliance gap [1].
Frequently Asked Questions
Q: Can a branch office sponsor a Non-Immigrant B visa in Thailand?
Yes, a branch office registered in Thailand can sponsor a Non-B visa, provided it meets the same capital and Thai-to-foreign employee ratio requirements as a subsidiary. The branch's relationship to the foreign parent does not exempt it from these thresholds.
Q: Does the type of Thai entity affect the work permit cost in Thailand?
The government fee for a work permit is based on permit duration and category, not on whether the sponsoring entity is a subsidiary or a branch. However, the total professional compliance cost may differ depending on how complex your entity structure is to administer.
Q: Does the Non-B visa require 51% Thai ownership of the sponsoring company?
No. The 51% Thai ownership rule belongs to the Foreign Business Act and governs which business activities a foreign-majority entity can engage in. It is not a Non-B visa requirement. Non-B sponsorship requires 2,000,000 THB in registered capital per foreign employee and a 4:1 Thai-to-foreign employee ratio.
Q: If a foreign employee moves from one office to another, does the work permit need to be reissued?
If the visa and work permit were issued under the head office, the foreign employee can generally be assigned to any branch without reissuing the permit. This is why applying through the head office from the outset is the recommended approach.
Q: Can a BOI-promoted company hire foreign nationals more easily?
BOI-promoted companies have access to streamlined visa and work permit processing and can benefit from 100% foreign ownership structures that are not available to standard Thai limited companies [4]. BOI promotion is worth evaluating if your business activity qualifies.
Q: How long does a Non-B visa and work permit application take?
Processing typically takes around 3 to 4 weeks in total, though this varies by embassy, visa category, and application completeness. Some embassies process applications meaningfully faster or slower than others. Check the Issa Compass app for current processing time estimates specific to your situation.
Q: Does province matter for work permit applications?
Yes. Each Thai province's immigration and labour office sets its own document requirements and procedures. Always verify requirements with the relevant provincial office -- or with an adviser familiar with that province -- before submitting.
About Issa Compass
Issa Compass is a software-automated visa services platform for Thailand, helping individuals and businesses navigate the Thai immigration system with speed, accuracy, and confidence. The platform's real-time verification engine checks every document and requirement before submission -- including unlisted, embassy-specific rules -- so that applications are fully qualified before they reach immigration. For businesses managing foreign hires, Issa Compass provides corporate work permit compliance support, Non-B visa processing, and onboarding assistance for international employees. If a pre-qualified application is not approved by immigration, Issa Compass provides a full refund covering both the government fee and the service fee, under the Issa Guarantee.
Whether you are setting up a subsidiary, registering a branch, or working through your first Non-Immigrant B visa application, Issa Compass's team of immigration consultants and legal professionals can walk you through the requirements specific to your entity type and province. Visit www.issacompass.com to get started.
References
- How to Legally Set Up a Thai Company as a Foreigner (www.Thai-co.com)
- Venturing into Thailand: The Strategic Choice Between Branch Offices and Subsidiaries - MBMG Group (mbmg-group.com)
- Subsidiary vs Branch: International Decision Guide (www.deel.com)
- Starting a Business in Thailand as a Foreigner Made Simple and (viettonkinconsulting.com)
- Setting Up a Branch Office vs. a Subsidiary in Thailand: Registration Implications | TILA LEGAL (tilalegal.com)
- Top 5 best business structures for foreign entrepreneurs in Thailand (belaws.com)
- Business Guide - Thailand (www.enterprisesg.gov.sg)
