Exporting Business

[ronsalehnasir]

My wife is Thai and I am American. We plan to be in Thailand two months per year primarily to visit her family. Our plan is that she would also engage in activities related to my US-based importing business selling handmade products from Thailand. My wife would find suppliers and artists, interview them and take their photos, purchase samples, make some shipments to the US, etc. We would not be make any money in Thailand from this business, but I would hope to eventually show a profit from sales made in the US. Am I required to register my US business in Thailand?

[SunbeltAsiaExpert]

Incorporating a business in Thailand and getting an exporter’s license is the safest and best way to protect yourself and have fixed costs over a longer period of time. While the up-front cost of doing this are larger than not setting up a business the cost over the long term are much smaller as you will be handling the shipping process yourself. As an American this would enable you to get a Work Permit for Thailand so you could work with your wife on your business here legally. The goods could still be sent directly to the USA and thus avoid VAT and you would not have to pay a shipping agent to process the items through Thai Customs. If the items are purchased then shipped by you then the seller will generally charge the 7% VAT but the savings would come when you arrange the shipping yourself as you will not be utilizing a shipping agent to process the items through customs or the actually shipping.

If you plan on simply sending a small volume of goods out of Thailand a few times a year then it may be easier to simply allow the seller to undertake the task of shipping/exporting the goods to you in the USA. While you will pay the seller’s shipping costs, you will not need to pay VAT (the invoice will be for goods purchased by an American (or American business that are being shipped directly to the USA). If this is the case then you will not need to get an exporter’s license.

Another option, which may be better if you are shipping more goods on multiple occasions from Thailand to the USA is to create an off-shore company. The benefit is that you have the seller invoice the offshore company for the goods purchased, thereby avoiding VAT, and the goods are sent to the USA. Much of the profits may then not be subject to Thai or American taxes.

You may also chose to avail yourself of the services of a shipping agent in Thailand if the volume and frequency of your purchases/shipments increases.

Either way you decide to proceed, technically your wife would be “working” in Thailand by meeting suppliers and doing interviews so she may have to pay income taxes for the portion of the income she earns for the work she did in Thailand.

[sunbelt][/sunbelt]