Help With Expatriation Advice

[manarak]

Dear all

My family and I are interested to look into expatriation in Thailand.

We are 35, 30, 6 and 3 years old, all europeans.

I have read a lot in this forum as well as on other sites about the different possibilities, but the more I got into detail, the more confused I was, since all issues seem to be interconnected: income with taxes with company with work permit with visa...

I would like some help to find out which setup would be optimal for me.

I would be very happy to get information on thai laws and links to positive sources of legislation supporting the claims, as well as advise on how to tackle the issues considering the given references of thai law.

1- Income and Taxes

I will be getting revenue from capital outside of Thailand.

Are the capital and revenue taxable in Thailand? For how much?

What if I setup an asset mgt box to manage my wealth and make monthly payouts to Thailand?

- other possibilities?

2- Visa and Work Permit

- I will have much time on my hands, and it is sure I will want to begin some kind of business. I read I could ask for a business visa.

- after the two initial years of business visa, I will need a different visa?

- to work, I will need to setup a company - I know my work permit can be applied for by my own company, but there are still uncertainties regarding capital ownership and the ratio of thai employees vs. farangs:

On some internet sites, it is said that it is mandatory to have at least 51% of Thai shareholders (even 66% for some industries), while other sites claim this depends on which business is done with the company. Similarly, some sites say there must be at least 2 Thai employees for one work permit, some other sites say it is 4, some sites it can be 0, it just depends on which business you are in.

- would it help if I put 10 million baht into my company (can do)?

On the other hand, I read about "educational visas" for kids and parents, valid one year, renewable as long as my children attend a school/university in Thailand. Since I would like to send the kids to the "Regent's School" this could be an option too.

But then what about my business and a work permit?

For the background, I am a highly educated business person currently working in banking, I have extensive finance, IT and legal knowledge and speak 4 languages, and I am learning thai.

Many questions, many uncertainties...

I definitely need competent advice!

Thank you in advance for your replies.

[Mario2008]

Regarding your questions look here:

http://www.rd.go.th/publish/6045.0.html

http://www.boi.go.th/english/how/setting_up_a_business.asp

[manarak]

Thank you for the interesting links Mario, the first was new to me.

On the Tax side:

A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand.

As I will stay more than 180 days, I'll be considered a fiscal resident.

So my "portion of income that I bring into Thailand" is taxable.

What happens if the money I "bring into Thailand" comes from me selling property (not considered income) as opposed to me earning interest or cashing in rent?

Will the tax authority require that I prove that claim? How?

Does the Thai tay authority sometimes assess the income based on the living standard of the taxpayer?

On the company side:

A minimum of seven shareholders is required at all times. A private limited company may be wholly owned by aliens. However, in those activities reserved for Thai nationals, aliens’ participation is generally allowed up to a maximum of 49 percent.

So this confirms some other info I had about the thai company, meaning I can own 99% of it with six other people having each one share, provided my business is not reserved for thais.

Edited December 18, 2008 by manarak

[Mario2008]

You might get more/better answers in the business section:

http://www.thaivisa.com/forum/Jobs-economy...ness-i-f13.html

[Maestro]

Yes, this topic turns out to be primarily about the aspects of Thai income tax and setting up a company in Thailand. Therefore, I am moving it to the forum “Jobs, economy, banking, business, investment in Thailand”

manarak, if you later have specific visa questions please feel free to ask them in the forum Thai visas, residency and work permits”

--

Maestro

[manarak]

Well, I believe the Visa and Tax issues are all interconnected - I am looking for the optimal setup regarding Taxes, Work Permit and Visa.

Setting up a company in Thailand is only one of the possible strategies.

But I want to know my situation in regard of the thai PERSONAL income tax, which is only remotely related to setting up a business in Thailand.

To continue on the tax issue:

from http://www.bia.co.th/016.html

Non-taxable income

The following are examples of non-taxable income:

2. Bona fide gifts and inheritances from Thai or foreign sources.

3. Proceeds from the sale of property not in the course of business

6. Income subject to tax in a tax treaty country.

=> hmm.

2. My parents are sooooooo rich, they give me 5000 EUR a month as a gift to sustain my life in Thailand => taxable?

3. I sell off my financial assets progressively => taxable?

6. If I get a salary paid in a tax treaty country and fully subject to tax there, I don't pay tax in Thailand? This could really get interesting.

Edited December 18, 2008 by manarak

[manarak]

an interesting document:

http://www.kpmg.com/SiteCollectionDocument...D_2008_TIES.pdf

I think the gift idea is worth investigating.

What does it mean in the eyes of Thai tax authorities if rich parents regularly pay their son/daughter a monthly sum?

Taxable or not?

There must be some material about that somewhere.

[Maestro]

…On the Tax side:

A resident of Thailand is liable to pay tax on income from sources in Thailand as well as on the portion of income from foreign sources that is brought into Thailand.

The Thai Revenue Department implements this in the sense that if your foreign income brought into Thailand is earned during the tax year in which you earn it then it is taxable in Thailand. For example, in 2008 you transfer to Thailand foreign income you earned in 2008, you are liable to pay tax on it in Thailand. So what you do is you leave the foreign income you earn in 2008 in your foreign bank account and transfer to Thailand money you earned in 2007 or earlier. In practice, the Thai Revenue Department never checks when the money your transfer to Thailand was earned and they would have no way of checking it, which means that you don’t have to declare this money as income to the Thai Revenue Department.

--

Maestro

[Maestro]

The information on tax on foreign income is also in the document of KPMG to which you linked.

Salary Earned from Working Abroad

Is salary earned from working abroad taxed in Thailand? If so, how?

Salaries of resident employees are exempt from Thai tax if not paid in or remitted to Thailand in the year it is received. Non-resident employees are not subject to Thai tax on this income, in any case.

Taxation of Investment Income and Capital Gains

Are investment income and capital gains taxed in Thailand? If so, how?

Resident taxpayers are liable to tax on investment income received abroad, if it is remitted to Thailand in the same year it is received.

--

Maestro

[manarak]

Thank you - that is very useful info.

In fact, that means if one can defer by a year his income, using some cash as a buffer, then no tax is due!!

That is very good!

:-))

[TerryLH]

Since you don't seem to be cash strapped, wouldn't it make since to contact an attorney who specializes in this?

I believe some of the sponsors here do that kind of work, and may even offer a free initial consultation.

[manarak]

my approach is always to get as much information as possible beforehand, so I can ask the lawyer questions.

if left alone, a lawyer will most likely propose a solution that is safe, but possibly expensive, or one where he and his friends can secure some additional revenue on my back.

I know the game, it is the same in private banking.

So I always want first to get a good general understanding of my options, to verify information from different sources and then only I will have a lawyer check my options and ask him to provide me with alternative scenarii if they exist.

I will at the end consult a lawyer, but only when I will be satisfied with my own level of general knowledge.