Starting An Internet Business In Thailand

[jimky]

I've been researching and wanting to start a Thai company for almost 2-years now, and this time, for absolutely sure, I am about ready to get started (US business is pending sale). I'll of course be shopping for an accountant and also looking for an attorney to answer questions along the way. I've started that process, but before I go any further I was hoping to get advice from the forum, in order to be better prepared when shopping for assistance. I have a ton of questions and so appreciate anyone who answers even just one of them, though the more the better =)

Points of reference:

1) The nature of all my questions involves VAT / Withhold Tax / any other Special Taxes

2) There are several areas my company might be involved with: Market research (basically detailed heavily research website content), coding and graphic design, affiliate marketing and advertising. Also on RARE occasions will sell a domain or website (mostly buying these rarely selling them).

3) Initially ALL my customers are from outside of Thailand.

In case you think I'm nuts:

1) I'm an American citizen subject to taxes on worldwide income regardless. I have a wife and child here (more planned) am only age 31, and don't plan to leave Thailand anytime soon.

2) Yes, I might not run "ALL" of this Thailand. I just want to see what's involved to make a more educated choice on that. In the end I might stick to only running the content/design service here.

Okay long intro complete let me get into the questions based on each type of business activity:

Market Research / Website Content

Initially, my company's primary business activity is website content (though easily could be classified as market research, as it's much more detailed and more expensive than standard content and heavily researched based. All of my clients for this will be outside of Thailand.

Question 1: My company enters into a $9,000 (USD), contact with an Australia company or sole proprietor the invoice reads market research and consulting (which is basically in the end is website content, but not until they use it for that purpose later on their own). When they pay me for this what special taxes do I need to pay? Is it 7% VAT, 0% VAT, or exempt from VAT? (There's going to be A LOT of transactions like this, (all clients outside Thailand) so I want to make sure I get that right. In addition to VAT are there any other withholding or special taxes I need to deal with? Also if I call it market research and it looks like website content, should anyone inspect what my company is offering, is this an issue? (Disregard that last part if its 7% VAT regardless).

Website Coding and Graphics

Question 2: Someone from the UK pays my company $1,200 (USD) for website programing or graphic design. This is a much smaller portion of my business but I do take occasional projects for both these. Same question about VAT, withholding and other taxes.

Operating Websites

Question 3: I receive $4000 (USD) in affiliate payments each month. For example Google AdSense (Ireland), Commission Junction (USA), or anyone perhaps a hosting company, a hotel company like Agoda etc. I have no opportunity to actually charge these companies VAT or negotiate some other taxes, so these would be purely on me to pay. What VAT, withholding tax, or w/e is required here?

Question 4: I have a website about golf balls and I sell a small one month advertisement to Titleist (a US company) for $250 US. What VAT, withholding tax, or w/e is required here?

Domain and Website Sales

I sell a domain name to someone in Canada for 300,000 baht.

Question 5: If this domain was purchased for 100,000 baht and is on the books as a 90,000 asset (10,000 already depreciated/amortized): What VAT, withholding tax, or w/e is required here?

Question 6: If the domain was one we registered fresh and expensed (not an asset), What VAT, withholding tax, or w/e is required here?

The Remaining Questions All Relate to Withholding or Special Taxes (No Vat Involved).

Outsourcing Work:

Question 7: My company contracts a freelancer from India to do 50,000 baht worth of graphics work for us. When I pay him, do I need to withhold any tax?

Purchases and Expenses:

Question 8: My company purchases a domain name for 200,000 from someone in Canada and will be putting it on the books as an asset. Tax Involved here?

Question 9: My company renews a ton of domains at Godaddy for $550.00 (US). (Straight expense, or anything special extra with taxes?).

Question 10: My company purchases a domain name for 2500 Baht from Snapnames.com (Straight expense, or anything special extra with taxes?).

Question 11: My company purchases hosting for $97 (US) for the year (Straight expense, or anything special extra with taxes?).

Question 12: My company purchases some standard web software (think forum, or content management system, fixed price pay with credit card) for $299 (US) (Anything special extra with taxes?).

I realized I ask a ton, but any answers or other general advise you can give me is greatly appreciated.

[muratremix]

Open a company in Philippiness and operate it from Thailand.

Philippiness is tax heaven.

[manarak]

Open a company in Philippiness and operate it from Thailand.

Philippiness is tax heaven.

offshore is the way to go, especially as

3) Initially ALL my customers are from outside of Thailand.

Nothing prevents your Thai company to only have one client abroad. The tax office will be happy as long as you show reasonable (small) profit in Thailand.

Use the Thai company for "production" and "sourcing" and the offshore company as trading hub where the profit accumulates.

Globalized business 101

[WithMarco]

why not HongKong or Singapore or Malaysia ?

i'm moving into development of apps for mobile platforms and i'm wondering too where to setup my biz and thailand is definitely out of question,

just too many hassles, taxes, and visa BS.

[raro]

Nothing prevents your Thai company to only have one client abroad. The tax office will be happy as long as you show reasonable (small) profit in Thailand.

Use the Thai company for "production" and "sourcing" and the offshore company as trading hub where the profit accumulates.

Globalized business 101

Ahemmm...it is not quite that easy. In such a construct tax must be paid where the value is created. Consult with a *good* tax expert on structuring this correctly. You get away with some, but not all!

[sbk]

long thread here on offshore companies:

[aras]

Interesting .... sorry just trying to get this thread open for posiible additional comments

[manarak]

Interesting .... sorry just trying to get this thread open for posiible additional comments

you could have a look here:

http://www.webmasteroffshore.com

regarding the "value creation": have 2-3 employees make the websites in Thailand, then sell them to an offshore company (yours), or order the work from your Thai company, billed by the hour.

[Dayley]

As "WithMarco" said "thailand is definitely out of question, just too many hassles, taxes, and visa BS."

Owning two companies, one in Thailand and another off-shore doesn't really solve the problem. Because a foreigner cannot own the majority of the company, and in Thailand the Director/Majority share holder MUST be Thai. So you would have to have the Thai registered company owned by your Wife (if applicable) or some random Thai resident that a lawyer has found who will do it in their name if you throw them a little money. Obviously, there is uncertainties with this. What if you and your wife split-up? Unlucky for you... your wife keeps the business. Or even worse, a random owns your business! Scary!!

Also note, in Thailand if you have a foreigner working in your company, such as yourself, then you MUST employ 4 Thai employees also. 4 Thai's per single foreigner. 4:1. At our company we have 2 UK employees who specialise in their criteria, which means we have had to employ 8 Thai employees also. They may be low salaries, but they are soon totalling up.

So, that would leave us with an off-shore only option in your name. This seems the better solution. However, I am wondering how this is possible. Because if there is no Thai business, then how can you receive a Thai Work Permit & Thai Business Visa that needs to be linked with a Thai business?

I too would appreciate info on this.
And I too have a digital agency that provide cloud web hosting, web developing, and mobile app developing mainly to UK customers, but with the odd Thai, US, and other customers.

[dimitriv]

On 9/20/2019 at 10:12 AM, Dayley said:

As "WithMarco" said "thailand is definitely out of question, just too many hassles, taxes, and visa BS."

So, that would leave us with an off-shore only option in your name. This seems the better solution. However, I am wondering how this is possible. Because if there is no Thai business, then how can you receive a Thai Work Permit & Thai Business Visa that needs to be linked with a Thai business?
 

 

This post was started in 2011 ????

 

>> So, that would leave us with an off-shore only option in your name. This seems the better solution.

 

A UK limited is perfect for this.

 

>> Because if there is no Thai business, then how can you receive a Thai Work Permit & Thai Business Visa that needs to be linked with a Thai business?

 

Not.

 

But you can try a retirement visa, a visa based on marriage etc.  You can also live in Thailand 6+ months a year on tourist visa and spend the remaining time in Vietnam or Bali.  Thailand is nice, because you do not pay tax on foreign income in certain conditions. So it is interesting to stay in Thailand 6 months + 1 day en become tax resident.

 

[Dayley]

On 9/24/2019 at 6:59 PM, dimitriv said:

A UK limited is perfect for this.

Companies which are classified as “small” (Profits of no more than £300,000) will pay corporate taxes at the rate of 20% with a UK limited company. If I am living in Thailand, run my business from Thailand, then surely I want to keep my taxes down, similar to Thai taxes.

 

On 9/24/2019 at 6:59 PM, dimitriv said:

But you can try a retirement visa, a visa based on marriage etc

I am only 32, so a retirement visa is a little early for me, and unfortunately I am not married (nor do I have a partner).

I currently have a 1 year business visa and a 1 year work permit which I renew yearly. I both live and work in Thailand (working for another business also), so this is my residence now. I cannot travel to various countries as much as I would love to.

What would you propose?