I'm working for a European IT company that is investigating setting up a small software development "office" in Thailand, hiring Thai developers. The plan is not set up a separate business here, but mainly to offshore internal development work here instead of hiring more (expensive) developers in the home office. There would be need for fair amount of technical communication in English between home office and Thai office.

I've already read some of the forum threads discussing the challenges of recruiting Thai staff/software developers here, but I'm wondering if anyone has used local help in getting setup successfully? Like a company specializing in offshore formation, or a recruitment agency. Any recommended agents?

I'd be very grateful for thoughts on what people think were the key factors that contributed to the success of their "offshore" development office here in Thailand?

You should hire a Thai lawyer to prepare BOI documents for you. You will need alot more foreigners than you think. There just aren't enough qualified Thais. Try for a 1:1 ratio. It's been given before.

Otherwise, just post on jobsdb, and expect to fire about 11 Thai engineers for every 1 that you keep (personal experience). There is no real value in recruitment agencies here. You need to do it all in house. It isn't that difficult if you have a Thai speaking project manager.

Thomson Reuters has a big "insourcing" operation in Bangkok - about 1,500 at last word. Apparently there are not more than about 25 non-Thais. But they've been at it since 2001.