SPONSORED WORK PERMIT- does it work?

[SCOTT FITZGERSLD]

I saw here an ad for a SPONSORED WORK PERMIT. seems like it is kind of a solution for getting

work permit without having to start your own corporation.

The way it works is that the sponsored declare a salary to the sponsor - thai company - and than pays

the social security  and income tax associated with the salary, plus a fee for the sponsorship.

 

Does anyone has an experience with this? Does it mean that with this work permit i can

work also in other fields / projects, which are not connected to the sponsoring company?

[BritTim]

You need permission from the sponsoring company to engage in activities not covered by your work contract with them, and would need the work permit amended. There would not be a problem if working as a digital nomad (no connection with Thailand) but you would be taking a risk if working with other Thai companies or with Thai clients.

 

There have, in the past, been organisations targeted at digital nomads. They were expensive, and of dubious value. In my opinion, the kind of sponsored work permit you cite is likely to be similarly questionable (though perfectly legal).

[SCOTT FITZGERSLD]

12 hours ago, BritTim said:

You need permission from the sponsoring company to engage in activities not covered by your work contract with them, and would need the work permit amended. There would not be a problem if working as a digital nomad (no connection with Thailand) but you would be taking a risk if working with other Thai companies or with Thai clients.

 

There have, in the past, been organisations targeted at digital nomads. They were expensive, and of dubious value. In my opinion, the kind of sponsored work permit you cite is likely to be similarly questionable (though perfectly legal).

so is the whole scheme legal at all? say i open shop in EBAY with this sponsored work

permit - will it be legal ? the profits and all? will i have to pay taxes from thailand?

[jackdd]

22 minutes ago, SCOTT FITZGERSLD said:

so is the whole scheme legal at all? say i open shop in EBAY with this sponsored work

permit - will it be legal ? the profits and all? will i have to pay taxes from thailand?

You would have to open the ebay shop in the name of the company where you are employed. If they allow this is up to their discretion.

The income would then go through this company and they would pay you a salary.

[LivinLOS]

I know multiple freelancers who use these systems.. They are all happy with the solution.. 2 are on iglu (who dont take new people I believe) and 1 with another, likely shelter but not sure. These are the kind of young single expats and they trade cost against zero visa or dodgy legal issues. 

All are real working online entrepreneurs, all are happy with the process, and one is hoping to go for citizenship (working on her Thai) via the process. I meet 100s of 'nomads' around chiang mai and 95% of them are just gap year travellers who talk nonsense about trying to make SEO marketing dropshipping crypto etc because it sounds cooler than simply being a backpacker for a while. It gives a sense of community and hustle / success they aspire to I guess. Each of the 3 I know who are doing this are nothing like that category, they have in demand skills, they work a decent level of hours from home (not a cafe or 'space') and have a client base. My gut assessment, as someone who engages 100s of contractors per year, I would call these folks valuable employees / contractors in any market. They seem like reliable sensible hard working types. 

For flakes, it doesn't make sense.. For someone with a middling income stream, it can make sense, then for a good earner (multi 100k usd per annum) it again doesn't make sense, due to the % way it charges, but would be trivial to route it through a Hong Kong shell company which then pays the Thai umbrella co 2 - 3k usd a month so I can see a very easy solution. 

[SS1]

1 hour ago, LivinLOS said:

I know multiple freelancers who use these systems.. They are all happy with the solution.. 2 are on iglu (who dont take new people I believe) and 1 with another, likely shelter but not sure. These are the kind of young single expats and they trade cost against zero visa or dodgy legal issues. 

Iglu is still taking on new employees, but they have distanced themselves from being an employer of 'freelancers' in Thailand. They have changed their business model slightly after rules got tighter and now focus on long term roles/projects with clients mainly in the area of software consulting. 

[SCOTT FITZGERSLD]

2 hours ago, LivinLOS said:

I know multiple freelancers who use these systems.. They are all happy with the solution.. 2 are on iglu (who dont take new people I believe) and 1 with another, likely shelter but not sure. These are the kind of young single expats and they trade cost against zero visa or dodgy legal issues. 

All are real working online entrepreneurs, all are happy with the process, and one is hoping to go for citizenship (working on her Thai) via the process. I meet 100s of 'nomads' around chiang mai and 95% of them are just gap year travellers who talk nonsense about trying to make SEO marketing dropshipping crypto etc because it sounds cooler than simply being a backpacker for a while. It gives a sense of community and hustle / success they aspire to I guess. Each of the 3 I know who are doing this are nothing like that category, they have in demand skills, they work a decent level of hours from home (not a cafe or 'space') and have a client base. My gut assessment, as someone who engages 100s of contractors per year, I would call these folks valuable employees / contractors in any market. They seem like reliable sensible hard working types. 

For flakes, it doesn't make sense.. For someone with a middling income stream, it can make sense, then for a good earner (multi 100k usd per annum) it again doesn't make sense, due to the % way it charges, but would be trivial to route it through a Hong Kong shell company which then pays the Thai umbrella co 2 - 3k usd a month so I can see a very easy solution. 

but will it be legal to get payments / income to the hong kong company when my

work permit / work is done from thailand?

[Maxfloorplan]

I thought a company can only issue 1 foreign work permit for every 4 Thai nationals that are employed. How does a company like Iglu get around this? or do they just employ a lot of Thais? 

[jackdd]

4 hours ago, Maxfloorplan said:

I thought a company can only issue 1 foreign work permit for every 4 Thai nationals that are employed. How does a company like Iglu get around this? or do they just employ a lot of Thais? 

This rule doesn't apply to BOI companies (I don't know if all, maybe only some have this special privilege)

[LivinLOS]

5 hours ago, SCOTT FITZGERSLD said:

but will it be legal to get payments / income to the hong kong company when my

work permit / work is done from thailand?

The hong kong suggestion would be a cut out. So you have a nominee director and shareholder.. Theres no paper trail that Thai authorities could determine to see the connection.. In that case it would just appear as any other company that is not your own that you do work for. 

The legality of such a thing is highly questionable.. The reality is that Thailand would not have the ability to determine that facts that show it is questionable. 

This would have no practical bearing on your work permit.. You are the employee of the BOI registered Thai company, who then invoices on your behalf whoever you work for. 

Edited August 20, 2021 by LivinLOS

[LivinLOS]

5 hours ago, SS1 said:

Iglu is still taking on new employees, but they have distanced themselves from being an employer of 'freelancers' in Thailand. They have changed their business model slightly after rules got tighter and now focus on long term roles/projects with clients mainly in the area of software consulting. 

Yes they have shifted the outsource and relocation models rather than the self employed solopreneur market. 

[SCOTT FITZGERSLD]

20 minutes ago, LivinLOS said:

Yes they have shifted the outsource and relocation models rather than the self employed solopreneur market

IS this english?

[SCOTT FITZGERSLD]

23 minutes ago, LivinLOS said:

The legality of such a thing is highly questionable.. The reality is that Thailand would not have the ability to determine that facts that show it is questionable. 

well, these days all banks want to know where are you resident, and than will realese

/ receive your payments based on where YOU are resident, so if one day you want to

get your money from the hong kong company, you better havea nice letter from

thai accountant explaining what how

[fangless]

14 hours ago, SCOTT FITZGERSLD said:

IS this english?

Yes they are words used in the English language just not in the correct order or context!

????

[lordblackader]

On 8/19/2021 at 6:38 PM, BritTim said:

You need permission from the sponsoring company to engage in activities not covered by your work contract with them, and would need the work permit amended. There would not be a problem if working as a digital nomad (no connection with Thailand) but you would be taking a risk if working with other Thai companies or with Thai clients.

 

There have, in the past, been organisations targeted at digital nomads. They were expensive, and of dubious value. In my opinion, the kind of sponsored work permit you cite is likely to be similarly questionable (though perfectly legal).

Rubbish. The rules changed a few years back. You can take on as many jobs as you want now without having to even inform the issuer of the work permit. The only limitation is that it can't be a Thai-only job. 

 

As for dubious value, clearly you've never had one and wouldn't have the faintest idea. The reality is that for some it's the only way to work here legally. Anyone doing ED visas or similar solutions while working without a work permit are the ones breaking the law 

 

 

 

[LivinLOS]

On 8/20/2021 at 10:20 AM, SCOTT FITZGERSLD said:

well, these days all banks want to know where are you resident, and than will realese

/ receive your payments based on where YOU are resident, so if one day you want to

get your money from the hong kong company, you better havea nice letter from

thai accountant explaining what how

Nonsense.. Theres a wide selection of financial services and banks who will deal with a hong kong nominee directors company. Most of them are 'island' banks like Vanuatu or puerto rico etc. I used to have a swiss bank who would do it, but in the last year they no longer offer new accounts (existing ones remain active) and if you want a european IBAN then theres an estonian payment processor who offers this. 

Secondly 'who' is the 'you' in the suggested setup ? the HK director ?? The client ? remember you are the beneficial owner of the HK company not the director / shareholder.. There is nothing illegal about being paid by a company you are the beneficial owner of, and if your hurdle of difficulty is denied by something like 'a letter from a Thai accountant' then your likely not dealing with numbers that make these structures interesting.  Your guessing at things you apparently have no experience of.. 

[LivinLOS]

On 8/21/2021 at 12:40 AM, fangless said:

Yes they are words used in the English language just not in the correct order or context!

????

which words are you struggling comprehending ?? 

Iglu no longer targets the self emlployed freelancer market. They now concentrate on the (corporate) outsourcing and (corporate staff) relocation model. Primarily for Euro / scandinavian companies to reduce western tax liabilities and payroll costs. 

Fairly simple no ?? 

[fangless]

2 hours ago, LivinLOS said:

which words are you struggling comprehending

 

2 hours ago, LivinLOS said:

Yes they are words used in the English language just not in the correct order

I think the comprehension problem is on your side!

I said  "Yes they are words used in the English language just not in the correct order".  In other words (English) the words were understood but the sentence did not and it still does not. 

My comment was meant to be somewhat toungue in cheeck (note the smiley emicon) and should have been taken that way by you as it was in reponse to someone else (Scott F) asking if your post was in English which shows that I was not the only one who did not understand your post.  

I note you have not responded to his question! 

 

 I suggest you lighten up and stop using "Corporate" speak when you are trying to repond in open forums where the audience are not as "knowledgable" as some of the posters think they are!

 

 

 

 

Edited August 22, 2021 by fangless

[SCOTT FITZGERSLD]

4 hours ago, LivinLOS said:

Most of them are 'island' banks like Vanuatu or puerto rico etc.

many banks in the developed world will not accept payments from those island banks, or will

see them as suspicious

4 hours ago, LivinLOS said:

I used to have a swiss bank who would do it, but in the last year they no longer offer new accounts

indeed, so this is another example of haw hard it becomes to move money, even if earned legally, just

because many banks do not even want to budder

4 hours ago, LivinLOS said:

Your guessing at things you apparently have no experience of.. 

indeed i am no expert on that mattar and i am trying to learn even if i deal with

small amounts, that is because i got problems even when i tried to pay a small amount, something

like 700 USD, to a friend in another country, and the bank gave him hard time. so this forum

is a good place to share and advice

[LivinLOS]

13 minutes ago, SCOTT FITZGERSLD said:

many banks in the developed world will not accept payments from those island banks, or will

see them as suspicious

Once it is into one of those, paying it out to a personal account is not any kind of issue. Outbound transfers from those banks into SEPA / SWIFT etc is something the receiving bank must accept. Also yes any Euro (presume developed world but I dont deal with non uk Euro governments much) could potentially red flag and or audit a company paying obviously offshore accounts, thats why I include an estonian one with an EU IBAN in the mix which is rarely any kind of issue. 

All of that is largely irrelevant for someone who is Thai based and looking to distance themselves from controlled funds, it could also be done through discretionary trusts, using a trust to own a corporate vehicle and avoid beneficial ownership, etc etc.. These things come with costs but for a decent earner, from even a few 100k usd a year, they come with a lot less cost and in the case of trusts are entirely legal and above board, than the associated income tax demands that nations would impose on the same source of funds. 

People passively accept rules applied to the masses, and dont seem to realize that the rules the 1% use are equally applicable to them. Why do you think top CEOs like Elon or Larry Ellison take 1 dollar per annum salaries ?? Because the other 10s of millions in compensation are paid out through tax efficient funnels. Then its mostly about PR managing the appearances. 

 

 

[LivinLOS]

2 hours ago, fangless said:

 I suggest you lighten up and stop using "Corporate" speak when you are trying to repond in open forums where the audience are not as "knowledgable" as some of the posters think they are!

I am unsure if I am supposed to apologies for the lack of knowledge of other commentators ?? 

[SCOTT FITZGERSLD]

46 minutes ago, LivinLOS said:

Once it is into one of those, paying it out to a personal account is not any kind of issue. Outbound transfers from those banks into SEPA / SWIFT etc is something the receiving bank must accept.

well,if it was not an issue i would not write here at all. from my experience. small amounts payments of up to 10K USD are not an issue. but above 50K it gets complicated and banks - in my country at least- demand papers, or deny the payment with no explanations.

most of those carribean banks are not accepted at all by some banks.

on the other hand, huge amounts of miliions of dollars are accepted easier, because

they come from regulated companies.

a friend of mine paid 5000 USD to his thai account from U.S. broker. he had to go

threw a long AML investagation...

52 minutes ago, LivinLOS said:

All of that is largely irrelevant for someone who is Thai based and looking to distance themselves from controlled funds,

i am not trying to distance myself from my funds, but to learn how to prevent potential problems, because, to be  honest, i do not even know all the everchanging aws and regulations ..

 

54 minutes ago, LivinLOS said:

Why do you think top CEOs like Elon or Larry Ellison take 1 dollar per annum salaries ??

last time i spoke to a lawyer i paid 250 USD for a 60 minutes useless talk. so when i will have

the kinds of money elon and larry have, i guess i can afford more lawyer hours.

[LivinLOS]

2 hours ago, SCOTT FITZGERSLD said:

well,if it was not an issue i would not write here at all. from my experience. small amounts payments of up to 10K USD are not an issue. but above 50K it gets complicated and banks - in my country at least- demand papers, or deny the payment with no explanations.

most of those carribean banks are not accepted at all by some banks.

Thats simply not true.. If a transfer is sent via SWIFT / SEPA / Etc the destination bank gets the transfer.. there is no blanket rejection of any bank connected to those networks without process. 

Sure some banks may ask for paperwork, clarity on what it is (needs to ensure it not guns drugs prostitution or terror) but the point is you control all the entities in the transaction.. If they want a paper trail, you open a word processor and make the invoice they want to see.. 'consultancy services'.. bingo, they have something to put in the file. Banks dont make the rules, or decide the laws, courts and judges do that. 

This mindset of how its all regulated and impossible is exactly why regular guys dont do it, and its simply not the truth. I can tell you with certainty as I personally do it, easily, and in todays banking world. I have accounts in PR, Swiss, Hong Kong, Estonia, as well as Ireland, England, Belgium, Channel Islands.. I have shell corps in HK, holland, registered dormant companies in UK, Holland with full banking tax numbers and everything ready to use at a moments notice if any need arises and active trading companies in multiple EU states that are generating profits.  

A discretionary trust you can control (but not own) which itself owns a HK (zero offshore tax company) with trustee ownership and an EU or hong kong bank account, can invoice western corporations without any red flags or audit issues for services rendered and even if they came up could be answered.. That wealth filters into the trust which you dont own which is tax free and when you need to access it you can access the trust assets, only incurring liability when and what you draw from it (which again wouldnt automatically generate a tax liability in Thailand but thats very dependant on residence). Even better is to borrow from the trust, so as that is then a debt you are not earning anything, in fact you create a debt which can be used to offset other earnings and tax liabilities where you may have them.. The trust is rich, you are heavily in debt (to the trust) an ideal arrangement to protect assets against attack.

Trusts are superb tax management and succession planning tools, if your a decent earner in the west who is self employed or an entrepreneur who has the freedom to invoice for your services its crazy to go through life as a taxable individual when you can work at any tax efficient level of salary you choose for a company which is owned in trust. This is especially true for expats who have the freedom to operate a 'multiple flag theory' lifestyle.

[BritTim]

1 hour ago, LivinLOS said:

Thats simply not true.. If a transfer is sent via SWIFT / SEPA / Etc the destination bank gets the transfer.. there is no blanket rejection of any bank connected to those networks without process. 

International transfers occur between banks that have established a trust relationship (often referred to as the correspondent bank). Certain (usually small) banks while not (it is true) banned from SWIFT can find it hard to transfer funds to particular countries because they lack correspondent banks there. A bank cannot just place a transfer on SWIFT targeted at a random bank and expect it to be processed.

[SCOTT FITZGERSLD]

4 hours ago, LivinLOS said:

there is no blanket rejection of any bank connected to those networks without process.

THERE are many rejections these days, it started to get harder around 3 years ago. i do not

do many  or large transfers, but allready had two transfers rejected, because i did not mention the right reason for transfer.

4 hours ago, LivinLOS said:

Sure some banks may ask for paperwork, clarity on what it is (needs to ensure it not guns drugs prostitution or terror)

problem is that each bank and each counntry, and sometimes just some bankers;  are making

their own rules, and might ask you for tax papers, bank records, and many other crazy stuff.

try to transfer 100,000 USD to an account in panama; for example, and see what happans. they

want to see your bank records and tax returns 10 years back....and if anything suspicious, they

deny the transfer.

4 hours ago, LivinLOS said:

Trusts are superb tax management and succession planning tools, if your a decent earner in the west who is self employed

well, ifyou are atax resident in the west, than you will pay the western tax on what you earn

all over the world, and it will be a crime to hide your earnings in trusts.

but you are propably a tax resident in thailand , and that is why all is so easy for you,

because thailand has a teritorial tax system, which means thailand will tax you only for what you earn in thailand. this makes thailand some kind of a tax heaven.

[BritTim]

1 hour ago, SCOTT FITZGERSLD said:

... thailand has a teritorial tax system, which means thailand will tax you only for what you earn in thailand. this makes thailand some kind of a tax heaven.

True in practice but, in theory, if you spend 180+ days in Thailand during a tax year, you are liable not only for all earnings in Thailand, but also any portion of your overseas income transferred to Thailand during the same year in which it was earned.

 

As a practical matter, since cash is fungible, it is very difficult to distinguish recent earnings from savings. However, if possible, it is prudent to keep current year income in separate accounts from savings, and transfer only money from your savings to Thailand. That facilitates tax avoidance while keeping you strictly within the letter of the law, but nothing bad is likely to happen if you neglect this safeguard.

[SCOTT FITZGERSLD]

16 hours ago, BritTim said:

it is prudent to keep current year income in separate accounts from savings

i m not sure what prudent means, but to keep safe i do not transfer any money to thailand.

i bring cash and ATM cards...that will not even raise the question weather i earned the money

this year...

the good thing in this arrangement is that overseas banks are not required to report the

account to thailand (just like thailand is not reporting accounts to other governments). this

might change when the pandemic is over...