Salary Payment To My Thai Wife From U.s. Company

[Orangutan]

Soon my wife and I will be the Exclusive Independent Sales Reps for an American company that designs and manufactures (Italy) eyewear. I live in Bangkok and will initially develop accounts in Bangkok. Then Malaysia, Singapore and Hong Kong

I am currently receiving entitlement income form Social Security and The Veterans Administration in America. I do not want my earnings paid directly to me, as it will jeopardize my SS and VA payments.

Since my wife will be partnering with me I want all the earnings to go directly to her. My wife has a 10-year visa to America, and a U.S. Tax Identification number.

My question is how will the eyewear company make payments to my wife. Do I open a checking or savings account for her in America (she can provide a U.S. address), and then transfer the money wherever we want it. Or do I have the company wire the money to her savings account at Bangkok Bank.

If the money is deposited in a U.S. bank account will she have to pay taxes in the U.S.? She does not have a Green Card. All the work will be conducted outside the U.S.

If anyone has any experience or is maybe in the same position I would appreciate you recommendations.

Thanks - O

[meandwi]

To open a business account in the US you will need a business name and a federal tax ID number with a SSN. You will have to report and pay estimated quarterly taxes and all balances paid by April 15th to the US government. You can open a LLC corp online with your wife and yourself as business partners with little money and have them direct deposit funds into that account. You will need an american accountant to help with this to keep your paper work to a minimum. You will also need a buy and maintain a business license in the city/county/state of your choice.

Sunglass sales businesses in Thailand are everywhere and are very competitive with most namebrands being fakes. Opening a business in America to sell in Thailand/worldwide will have too much overhead for you to maintain your profits and stay competitive. Seek other ways.

[Orangutan]

meandwl,

Thanks for taking the time to reply but I don't want my name appearing on any bank account that the funds will go into. I'm aware of LLC's, and in the past have formed them myself without the aid of an attorney.

You said:

"Sunglass sales businesses in Thailand are everywhere and are very competitive with most namebrands being fakes. Opening a business in America to sell in Thailand/worldwide will have too much overhead for you to maintain your profits and stay competitive. Seek other ways."

The business and sunglass line is already up and running in the U.S.

These are high-end sunglasses manufactured in Italy, made with components that can not be duplicated. These will be sold to high end optical retailers. I'm not worried about knock offs. Already have several prepaid orders from stores located in most of the big shopping malls. Startup cost for me was practally nothing, split the cost of the samples and shipping with the company. I write the orders the company ships direct to the customer.

I'm guessing just to make it easy I will have the U.S. company wire transfer into my wife's Thai bank account.

Just wanted to test the water's for some creative idea's.

-O

[kudroz]

You wife can open a US bank account, although without a US driver's license it will be hard to do online. If you visit a US branch in person it will be easy.

She won't have to pay US taxes if it is not US source income nor Effectively Connected Income with a trade or business carried in the US. Meaning: If the sales negotiations and contract are signed in Thailand - it is Thai source income and not US source income. Her tax liability is in Thailand, not in the US.

[lanny]

You wife can open a US bank account, although without a US driver's license it will be hard to do online. If you visit a US branch in person it will be easy.

She won't have to pay US taxes if it is not US source income nor Effectively Connected Income with a trade or business carried in the US. Meaning: If the sales negotiations and contract are signed in Thailand - it is Thai source income and not US source income. Her tax liability is in Thailand, not in the US.

I'm not sure that part about not having to pay US taxes is correct. OP said that his wife has an ITIN. Why? If they are filing joint returns, she is required to report ALL of her income, worldwide, just as he is.

Technically, if he is participating in the business, diverting all of the income to his wife is not legal. Only if she does everything would the government accept it as her income. If he does the business, he is not telling the truth to the Social Security and VA people.

[Orangutan]

You wife can open a US bank account, although without a US driver's license it will be hard to do online. If you visit a US branch in person it will be easy.

She won't have to pay US taxes if it is not US source income nor Effectively Connected Income with a trade or business carried in the US. Meaning: If the sales negotiations and contract are signed in Thailand - it is Thai source income and not US source income. Her tax liability is in Thailand, not in the US.

I'm not sure that part about not having to pay US taxes is correct. OP said that his wife has an ITIN. Why? If they are filing joint returns, she is required to report ALL of her income, worldwide, just as he is.

Technically, if he is participating in the business, diverting all of the income to his wife is not legal. Only if she does everything would the government accept it as her income. If he does the business, he is not telling the truth to the Social Security and VA people.

kudroz and lanny many thanks for thinking my situation out...like I am doing. Will check with my tax guy in the U.S. regarding the info from kudroz. lanny I will be accompanying my Thai wife as she calls on her accounts, shows them samples, writes orders and discusses business. Then we'll have some lunch. My name will/does not appear on any contracts between the company she represents in the U.S., or the Thai optical accounts she gets orders from in Thailand.

Many thanks - O

[kudroz]

The mere fact of having a ITIN doesn't make her liable to pay taxes in the US on her worldwide income. A non-resident alien of the US only has a tax liability on US source income and ECI. Everyone can obtain an ITIN, there are no requirements of citizenship nor residence.

ITINs are often asked by US banks when the applicant is a non-resident alien of the US. The ITIN is required so the bank can report interest income which is paid to the beneficiary of the account.

[Orangutan]

The mere fact of having a ITIN doesn't make her liable to pay taxes in the US on her worldwide income. A non-resident alien of the US only has a tax liability on US source income and ECI. Everyone can obtain an ITIN, there are no requirements of citizenship nor residence.

ITINs are often asked by US banks when the applicant is a non-resident alien of the US. The ITIN is required so the bank can report interest income which is paid to the beneficiary of the account.

The reason for getting my Thai a ITIN was in case she needed it to collect on any of my entitlements or investments that have her named as benifeficiary when I die. I don't plan of ever filing a U.S. tax return with her. Most likely I got it for the wrong reasons as my SSA and VA money is not taxable income. Just thought I'd cover all the bases for my wife. Applied while doing the paperwork to get her 10 yr. visa for our past trip to the U.S.

Thanks - O

[Boudak]

Orangutan,

In order for your wife to open a bank account in a US bank, she will have to show proof that she is living at the address that she uses on her application. Generally, banks will accept as proof a bill with her name on it. To wit, an electric, gas, water, etc, bill with her name and address on it. A credit card bill will work also.