Registering A Company In Hk

[JoeMcCann]

I've been trading as freelance now for about 5 years and am looking into registering a limited company and gradually building up bit by bit.

All my clients are in Europe, so have been paying UK tax (as only just arrived in Thai). And was thinking i'd register a company here, but after doing a little research realised it would be a real pain in the ass.

I stumbled across a couple of posts Naam replied too advising some guy (who is in a similar situation) should register in Hong Kong as he would be void of tax providing all money is not generated in HK....

Is that correct?

and how easy is it to do?

and what would be the process if I employed a couple of people in Thailand, would I need to setup some kind of company here also?

lastly how would that effect me if I decided to stay in Thailand long-term? I guess I'd need to employ myself here?

A little confused but all the help / pointers is appreciated

Cheers

Edited August 20, 2011 by JoeMcCann

[raro]

If you want to use this business to be your income base and reason for the visa, yes you need to register a company here and employ you through this company.....conditions apply, 2 Mio Baht, 4 Thais etc....

[MarkTudor]

Balance the pro and cons

Pro: u get visa to stay in thailand with a thai based co. Tax is paperwork. Hiring thais is just to satisfy thai authorities requirements

Con: without visa, u still hv to exit for visa runs, which translate money. HK is good, but are u going to be there all the time? If its a dormant company in the first place, and without paying any non-resident tax, why incorporate in the first place? Makes no sense.

[JosephMcCann]

Hey thanks for all the info,

The reason I'm asking is I'm at the stage where I'm at the limit of what I can do in a day / night, but at the same time I don't want to jump right into employing 4 people as I'd like to gradually ramp it up bit by bit.

Fortunately & I travel a bit for work, for example I may be in the UAE for a couple of months then back to Thailand so from what I was reading it sounded interesting incorporating somewhere like Hong Kong where the Tax benefits seem a lot better than me continuing to be registered freelance in UK as from what I read you only get Tax on money earned in Hong Kong which would be zero to very little.

I read some one on here also suggesting registering somewhere like HK, then setting up a representative office here - but from my research that would suggest no work that generates money can be conducted here, is that correct?

Gah, this is something I've been thinking about now probably for the best part of year, not entirely sure what the best route to take would be...

Edited August 21, 2011 by JosephMcCann

[MarkTudor]

Malaysia would be better no? Just pay a nominal fees to the stand-in directors. What I still don't understand is, if u want representative office, u still need to incorporate a company in Thailand right?

Anyway, best for you to research out on "offshore company" and u will know where u are heading to!

If u need malaysian contacts, I would be glad assist on the malaysian side.

Best of luck

[chiang mai]

I worked freelance for many years, my clients were spread all around the world and I spent my spare time in Thailand. I used an umbrella company in Hong Kong very successfully, google Nelson Wheeler in Hong Kong, call them and tell them you want to use Seamex, very low fees and very reliable, no reason to set up your company just to invoice and collect fees. PM if you need further info.

[JosephMcCann]

Malaysia would be better no? Just pay a nominal fees to the stand-in directors. What I still don't understand is, if u want representative office, u still need to incorporate a company in Thailand right?

Anyway, best for you to research out on "offshore company" and u will know where u are heading to!

Thanks Mark, I wasnt 100% sure if a rep office here would be the answer. I think to be honest I've been reading so much stuff on this forum I'm getting a little confused on the right way to go.

WIll do some further searching on offshore

thanks

[JosephMcCann]

I worked freelance for many years, my clients were spread all around the world and I spent my spare time in Thailand. I used an umbrella company in Hong Kong very successfully, google Nelson Wheeler in Hong Kong, call them and tell them you want to use Seamex, very low fees and very reliable, no reason to set up your company just to invoice and collect fees. PM if you need further info.

Thanks Chiang, sending a PM now

[Valjean]

While I have both HK and TH companies I won't pretend to be an expert. But here's my two cents...

If you work in Thailand, you need a work permit. Obviously there are lots of internet freelancers doing otherwise, but that's the rule. I don't think a rep office gets around this but I could be wrong.

If you have both HK & TH companies there are rep offices or pricing transfer agreements between the companies but for the income derived from the work in Thailand you need to report and pay Thai taxes (both company and your salary). Given that you travel and do work outside of Thailand that helps you establish income from activities outside of Thailand. This needs to be setup right and some professional help would be worth the money.

HK is an advantage for taxes, no corp taxes if you're not doing business in HK. Another advantage is if you're paying non-Thai vendors it's easier from HK. There can be withholding and more paperwork if you pay from Thailand.

As someone noted your bar for a company + WP in Thailand is 2M THB (1M if married to Thai) and 4 Thai employees. Assuming you have the capital it sounds like your business might support that. One could be a maid, and admin. I'm not saying it's not overhead and I don't know your business. And you're at risk if you have people on the payroll who are just names, but if at the core there's a real business, and a few qualified people working, no one can complain if 1 of the 4 is your maid, or maybe one a college intern just to manage costs.

[JosephMcCann]

Thanks Valjean,

That made a lot of sense, looking into detail on the rep office idea - it wouldnt allow me to get a work permit or do anything in the way of work.

Do you know if the same rules apply if a thai was to setup the company and I become a partner / employee?

[tombkk]

Thanks Valjean,

That made a lot of sense, looking into detail on the rep office idea - it wouldnt allow me to get a work permit or do anything in the way of work.

If the rep office is set up correctly, it would allow you to get a work permit and work. I know people working for MNCs and running a rep office in Thailand. It would not allow you to write invoices, though, but apparently it is easier to set up than a company. However, the rep office must represent some company from abroad, so you would still have to open that company in Hong Kong in addition.

Do you know if the same rules apply if a thai was to setup the company and I become a partner / employee?

I'm not sure what you mixed up here. Any company needs 4 Thai employees and 2 million Baht capital per work permit. Thai ownershipment of the company can be anything between 51% and 100%.

In other words, you need the work permit to be an employee. Whether or not you are also a partner/shareholder is a different matter. You can be the employee of your own company (for example as the managing director).

If you are only a partner and not an employee, you don't need a work permit. But then, you will also not be allowed to work, and that defeats your purpose.

Summary:

1. Working in Thailand requires a work permit.

2. Any company that employs you needs to have 4 Thai employees and 2 million Baht capital (in general).

3. Rep office might be easier to open, but if you have to open a HK company too, may become more expensive.

Here is a solution: Since you travel so much, do all your actual work abroad. The time you spend in Thailand is purely for relaxation. This way, you will be fine.

You can open a company in Hong Kong, which issues the invoices. Of course, the money needs to be generated outside of Hong Kong, and you won't work when you are in Hong Kong.

Don't work in any other country, as you might need a work permit and/or pay taxes there. This leaves only the airplanes as a working space - and now I know why they call it "Business Class"!

Remark: There is a fine line between tax evasion and tax avoidance. Be smart. If your business runs into interesting figures, hire a professional for tax issues. Otherwise you'll end up in a place were you don't need to pay taxes, but instead the tax payer gives you free full-board accommodation.

[raro]

I'd like to add that a rep office cannot generate any business, i.e. cannot issue invoices and collect revenue. Instead, it must be supported by the company it represents with at least 3 Mio Baht a year (if I remember well..).

[Valjean]

Couple fine points.

I think the OP is from the UK. If he or another person reading this is American, you can own 100% of a Thai company under the Treaty of Amity. Makes life a little simpler.

tombkk's remark re: tax evasion and tax avoidance is worth noting. If you have a Thai company expect audits and visits from the Thai government departments. They know all of this well, don't assume less.