Remote/online workers: representative office in Thailand for long-term stays?

[andux]

I'm opening this thread because there is very little information about this around, and I'd like to have a discussion about what seems to be a valid way (at least on paper) for a foreigner who works remotely to stay long-term in Thailand, for the following reasons:

 

- Representative offices can be 100% foreign owned

- The representative office can hire a foreigner right away, which eliminates the need to hire 4 Thai employees

- Representative offices are tax-exempt, because they do not produce any income themselves

 

In other words, suppose that you have a company in your home country, or in a tax-free territory. You open a representative office in Thailand, appoint yourself as the responsible person of it, and you can stay in Thailand legally.

 

The representative office cannot produce income, but can assist the head office. This means that, in theory, the foreigner can legally work online assisting the head office, which, in other words, means that the foreigner can keep doing his/her remote work legally, because he/she is working for the customers of the head office.

 

Because representative offices do not produce income themselves, they are exempt from tax. The foreigner in Thailand representing the office needs a taxable salary, but that would be pretty much the only taxes affecting this structure.

 

There is a requirement of remitting 3M baht for the representative office, but only during the first 5 years. Also, that money can be used to pay the aforementioned foreigner salary in Thailand, so that money is not wasted.

 

I've seen in this forum that many people went with the company and the 4 Thais structure. Seems like more expensive in the long-term, at least when the 4 Thais are doing nothing productive (I agree that it's a completely different case when those 4 Thais are actually doing work for the company).

 

Any thoughts? Why is this option never recommended? Am I missing something in my analysis? Is there anyone here who owns a representative office in Thailand? 

 

You can read more about representative offices here: https://www.siam-legal.com/thailand-law/guide-to-the-representative-office-in-thailand/ or here: https://pugnatorius.com/repoffice/

 

 

Edited August 16, 2018 by andux

[BritTim]

A representative office, if you can get permission for one, is an excellent solution. The trouble is that they are very difficult to get. I know of two international companies using top legal firms that failed in their attempt to get permission for representative offices. You must be able to show clear economic benefits for Thailand from the existence of your representative office within the kingdom.

[jackdd]

According to the source that you posted

Quote

    Reporting on business movement in Thailand
    Providing advice related to products that are being sold to distributors or customers
    Sourcing goods and services in Thailand
    Inspecting and controlling the quality and quantity of goods purchased or ordered to be manufactured in Thailand
    Introducing information regarding new products or services

The Representative Office is strictly limited to the above five activities and may engage in any or all of them.

So if these are all activities which you are allowed to do, how are you planning to make money from them if you are running the company alone?

Usually people who work online do things like designer, software developer, affiliate marketing or blogger, but all these things are not allowed to do when you run a representative office.

Edited August 16, 2018 by jackdd

[andux]

19 minutes ago, jackdd said:

According to the source that you posted

So if these are all activities which you are allowed to do, how are you planning to make money from them if you are running the company alone?

Usually people who work online do things like designer, software developer, affiliate marketing or blogger, but all these things are not allowed to do when you run a representative office.

 

It seems that those would fall under the category of "Sourcing goods and services in Thailand". Services are sourced in Thailand, but for the head office, which is the one earning the income.

 

It is my understanding that one could also hire Thai people or companies to help with those services for the head office, but this is not necessary.

Edited August 16, 2018 by andux

[andux]

1 hour ago, BritTim said:

A representative office, if you can get permission for one, is an excellent solution. The trouble is that they are very difficult to get. I know of two international companies using top legal firms that failed in their attempt to get permission for representative offices. You must be able to show clear economic benefits for Thailand from the existence of your representative office within the kingdom.

 

Do you know why they failed to get permission?

[jackdd]

6 minutes ago, andux said:

 

It seems that those would fall under the category of "Sourcing goods and services in Thailand". Services are sourced in Thailand, but for the head office, which is the one earning the income.

 

It is my understanding that one could also hire Thai people or companies to help with those services for the head office, but this is not necessary.

From the situation which you described in your opening post you are the one working for the head office, right?

Working online is currently considered legal in Thailand without a work permit because your work has nothing to do with Thailand. As soon as you open a representative office in Thailand it has to do with Thailand and any work for the head office, which has nothing to do with the 5 activities listed above, then becomes illegal.

[BritTim]

23 minutes ago, andux said:

Do you know why they failed to get permission?

Lack of evidence that the representative office would be of economic benefit to Thailand.

[BritTim]

15 minutes ago, jackdd said:

From the situation which you described in your opening post you are the one working for the head office, right?

Working online is currently considered legal in Thailand without a work permit because your work has nothing to do with Thailand. As soon as you open a representative office in Thailand it has to do with Thailand and any work for the head office, which has nothing to do with the 5 activities listed above, then becomes illegal.

The representative office (or some other solution) becomes necessary once you wish to interact with Thai clients.

[ubonjoe]

I think you will find that at least one Thai employee will be required. It is a requirement to get a one year extension of stay at immigration.

You can find info about a representative office here on page 10 of this BOI business guide. http://www.boi.go.th/upload/content/A Business Guide to thailand 2018_5ac3593458b0a.pdf

[Get Real]

12 hours ago, andux said:

 

It seems that those would fall under the category of "Sourcing goods and services in Thailand". Services are sourced in Thailand, but for the head office, which is the one earning the income.

 

It is my understanding that one could also hire Thai people or companies to help with those services for the head office, but this is not necessary.

By your initial post opening this thread and the one I quote above, it seems like you are making a big fuzz about working as a freelancer online in Thailand. If that is the deal with you, then you do not need to make things so complicated.

At present time the authorities in Thailand seems to accept people staying in Thailand and working with a customer base in their own country. The only thing you will need to prepare for all unforseen consequences would be a TIN so that you forefill your duty to pay tax on the money you transfer to Thailand or other companies pay you to your Thai bank account.

If some things regarding this would change, it will likely be to the better. That would then be that Thailand would start to offer a special visa and WP for people living in the country and working remotely to their home country. Until then, just relax and do your thing, pay your taxes and most likely all will work just fine.

[impulse]

6 minutes ago, Get Real said:

By your initial post opening this thread and the one I quote above, it seems like you are making a big fuzz about working as a freelancer online in Thailand. If that is the deal with you, then you do not need to make things so complicated.

At present time the authorities in Thailand seems to accept people staying in Thailand and working with a customer base in their own country. The only thing you will need to prepare for all unforseen consequences would be a TIN so that you forefill your duty to pay tax on the money you transfer to Thailand or other companies pay you to your Thai bank account.

If some things regarding this would change, it will likely be to the better. That would then be that Thailand would start to offer a special visa and WP for people living in the country and working remotely to their home country. Until then, just relax and do your thing, pay your taxes and most likely all will work just fine.

 

That's all well and good in the short term.  But 4 years ago, the same could be said about living on monthly visa runs to the border, and clearing extended overstays and being back in Thailand in time for lunch tomorrow.

 

Then, the rules (or more accurately, the enforcement) changed and hundreds, perhaps thousands of lives were disrupted and families were torn apart as those living within similar loopholes found the noose tightening on them.  I'd rather not build a precarious life in a country and constantly worry when my clever scheme is going to collapse on me. 

 

I talked to so many guys on their way out of the country, many with tales of woe as their decades long Thailand adventure came to a screeching halt.   Had they foreseen the changes, many of them would have prioritized getting fully legal instead of buying the car, the scooters, the toys and the condo they could no longer afford to visit. 

 

I'm not forecasting anything.  Just suggesting that living (and working) under the radar isn't viable in the long term.  It may last forever.  Or it may evaporate after the next regime change, or the next promotion within any number of gov't agencies.

 

[Get Real]

1 hour ago, impulse said:

 

That's all well and good in the short term.  But 4 years ago, the same could be said about living on monthly visa runs to the border, and clearing extended overstays and being back in Thailand in time for lunch tomorrow.

 

Then, the rules (or more accurately, the enforcement) changed and hundreds, perhaps thousands of lives were disrupted and families were torn apart as those living within similar loopholes found the noose tightening on them.  I'd rather not build a precarious life in a country and constantly worry when my clever scheme is going to collapse on me. 

 

I talked to so many guys on their way out of the country, many with tales of woe as their decades long Thailand adventure came to a screeching halt.   Had they foreseen the changes, many of them would have prioritized getting fully legal instead of buying the car, the scooters, the toys and the condo they could no longer afford to visit. 

 

I'm not forecasting anything.  Just suggesting that living (and working) under the radar isn't viable in the long term.  It may last forever.  Or it may evaporate after the next regime change, or the next promotion within any number of gov't agencies.

 

Ok, even if what you wrote is a good story and very informative, it has absolutely nothing to do with the news I quoted. Here it was about having an insurance for helth, accident and illnes. That is something that the people rushing of to work in a foreign country should have, as well as the visa runners also have been needing to have for beeing able to take care of themselfs if something would happen.

This has nothing to do with any changes about visas. It has to do with having the possibility to take care of yourself if something happens in a foreign country.

[SurfDog82]

On 8/17/2018 at 8:50 AM, Get Real said:

By your initial post opening this thread and the one I quote above, it seems like you are making a big fuzz about working as a freelancer online in Thailand. If that is the deal with you, then you do not need to make things so complicated.

At present time the authorities in Thailand seems to accept people staying in Thailand and working with a customer base in their own country. The only thing you will need to prepare for all unforseen consequences would be a TIN so that you forefill your duty to pay tax on the money you transfer to Thailand or other companies pay you to your Thai bank account.

If some things regarding this would change, it will likely be to the better. That would then be that Thailand would start to offer a special visa and WP for people living in the country and working remotely to their home country. Until then, just relax and do your thing, pay your taxes and most likely all will work just fine.

 

Get Real, thanks for the reply to the OP. You wrote:

 

"At present time the authorities in Thailand seems to accept people staying in Thailand and working with a customer base in their own country. The only thing you will need to prepare for all unforseen consequences would be a TIN so that you forefill your duty to pay tax on the money you transfer to Thailand or other companies pay you to your Thai bank account."

 

I'm a freelancer (actually own a corp in the USA but work remotely) living here on tourists VISA in BKK. I've been going in and out for most of 2018 and coming up on the 180 day mark in 2018. I'm concerned they might flag me next time coming in. 

 

As far as my research has shown it's not possible to get a VISA in Thailand as a freelancer (as long as my customer base is elsewhere, which it is). I'm wondering what you're referring to in your post. Can you elaborate on what legal methods a freelancer would employ to stay in Thailand? What do you mean by 'TIN'? 

 

I'm looking at doing a non-immi B VISA, but if other options are available I'd love to know about them. I'm not prepared to purchase an Elite VISA either.

 

I appreciate any info you or anyone else might be able to provide. 

[balo]

19 minutes ago, SurfDog82 said:

I'm a freelancer (actually own a corp in the USA but work remotely) living here on tourists VISA in BKK. I've been going in and out for most of 2018 and coming up on the 180 day mark in 2018. I'm concerned they might flag me next time coming in. 

 

It's only your VISA situation you should be worried about, not your online work as a digital nomad.   I have been working as a digital nomad myself for 7 years now, but I'm on a visa based on retirement , so I only do my 90 day report at the immigration office. 

 

Yes multiple tourist visas , if you are not living outside of Thailand for a few months , it will sooner or later give you trouble with  the immigration .    

 

 

 

Edited August 19, 2018 by balo

[SurfDog82]

41 minutes ago, balo said:

 

It's only your VISA situation you should be worried about, not your online work as a digital nomad.   I have been working as a digital nomad myself for 7 years now, but I'm on a visa based on retirement , so I only do my 90 day report at the immigration office. 

 

Yes multiple tourist visas , if you are not living outside of Thailand for a few months , it will sooner or later give you trouble with  the immigration .    

 

 

 

Thanks, Balo. Yes, I'm not concerned about the work portion, rather the VISA, like you said.

 

I'm just muddling through the different options at this point. It seems to me that a non-immi B ME VISA would be my best option (outside of Thai Elite), or 'work' for a local company and get a work permit (like the IGLU 'relocate' option). 

 

Can anyone recommend a service that helps set up non-immi B VISA while here in BKK? Any other advice on options or services are helpful. I'm not a broke backpacker. I make good income and have no problem purchasing a VISA (though I do not want to commit to 5 years and 15K USD at this point) or using a service. 

[jackdd]

Setting up a company costs afaik somewhere in the range of 50k THB, then you have some running costs for stuff like accounting, and you need four Thai people for whom you have to pay at least the social insurance. Then you have to put at least 2 million THB in your companies name, then you can get a work permit, and then you can get a non-B visa. This solution is also not exactly cheap ?

Just go with tourist visas as long as possible, if this doesn't work anymore you could continue with ED visas, and if you don't want to study anymore you can then either get the Thai elite visa or marry somebody

[Scottjouro]

I think you misunderstand the legal status of a Rep office..it needs to be tied to an existing legal entity outside Thailand...per below..

 

Must be a legal entity registered under the law of a foreign country, and is considered to be the same legal entity as its head office.

 

Can conduct only 5 activities (*) without generating any income.

A Rep Office’s activities must be provided to its head office and/or subsidiaries/affiliate

 

   Five activities are the following:

1)      Reporting on business trends in Thailand to the head office or its affiliate.

2)      Providing advice concerning goods of the head office sold to agents or customers.

3)      Sourcing of goods or services in Thailand for the head office or its affiliate.

4)      Checking and controlling the quality and quantity of goods purchased or hired for manufacture in Thailand by the head office or its affiliate.