Self-employed With Non-thai Income?

[purplesage]

Hi,

I'm a translator, so I can work from anywhere with an internet connection. I'm thinking of moving to Thailand and am wondering what kind of visa to go for. All my work and income would come from outside Thailand.

I'm 54 so I could meet the requirements for a retirement visa, but this would not entitle me to work.

Thanks for any suggestions.

Purplesage, currently living in Italy

[sungod]

Why tell anyone????????

[desmond]

Why tell anyone????????

Well, sungod, he is asking what kind of visa he should go for.

I think for your case, you may consider the retirement visa but then again, you are not supposed to work with this kind of visa

[wrongway]

Hello,

Along with my other work for a Japanese company, I am also a freelance translator (Japanese to English). Even with my work in Japan, which is just a matter of acting as interface between the Japanese company and its customers in Europe, via email, telephone, etc., I do it all sitting right here in Thailand. For years I've kept an extremely low profile for fear of "being caught working." While a bit of caution is merited, I think I've been overly cautious. I, too, however, have recently been giving a lot of thought to what the best visa strategy is (hence my other post on this section of the forum). The way I understand it, as I go in and out every month, I am the perfect tourist, providing services for a company outside of Thailand and spending the money earned here. It's getting to be a pain in the butt, though. I would suggest you come and retire. If people wonder why you are always typing, tell them you have many friends to send emails to. By the way, are you taxed in Italy?

[purplesage]

Hello,

Along with my other work for a Japanese company, I am also a freelance translator (Japanese to English). Even with my work in Japan, which is just a matter of acting as interface between the Japanese company and its customers in Europe, via email, telephone, etc., I do it all sitting right here in Thailand. For years I've kept an extremely low profile for fear of "being caught working." While a bit of caution is merited, I think I've been overly cautious. I, too, however, have recently been giving a lot of thought to what the best visa strategy is (hence my other post on this section of the forum). The way I understand it, as I go in and out every month, I am the perfect tourist, providing services for a company outside of Thailand and spending the money earned here. It's getting to be a pain in the butt, though. I would suggest you come and retire. If people wonder why you are always typing, tell them you have many friends to send emails to. By the way, are you taxed in Italy?

I'm officially self-employed in Italy and taxed to the hilt! In Europe you're taxed in your country of residence. If I were living in Thailand I would not be subject to Italian tax, but for many of the companies and organisations I do jobs for - some of which are not in Italy - I'd need to issue an invoice, which I assume implies some kind of official residence (and maybe tax status) in the country where you live.

I fully appreciate sungod's suggestion (and may well end up taking that route), but also understand that you're getting tired of monthly visa runs and the fear of "being caught working".

Forgot to mention in my first post that I'm a UK national.

[thaiflyer1]

Why tell anyone????????

.................nuff said.

[wrongway]

Purplesage,

This is getting a bit off-topic, but if you are a UK national, I believe they do not (or did not) tax you on income generated overseas. I'm a US citizen, and if you are self-employed you still owe the US government Social Security and Medicare. Somewhere around 15% of your income no matter what your costs are, I believe, though others may know better. My Japanese company was asked about my taxes by the accounting firm they employ (iif I'm not being taxed elsewhere, they were kind enough to offer taxing me). I began sending invoices with my name plus "& Associates, Inc." attached. I use my US address for billing purposes, though I'm paid into a Japanese bank account. I withdraw here with an ATM card. As I've been out of the US for 20 years, half my life, and never paid into the system, I'm in the odd position of not paying any taxes at all. Don't, by any means, take this as a recommendation. I'll probably find myself in trouble some day. However, you should consider whether the Thai authorities may consider your income "taxable." If you can prove you are paying taxes already, you should be okay. There are others here on the forum who know much more about this than me, though. I think I've said enough; better go back to hiding. . . Best advice, as others seem to suggest, is to just keep a low profile.

[Steve2UK]

Purplesage,

As has been mentioned, given the nature and source of your work, there's a good chance that you'll never appear on Thai radar while being officially "retired" - but no guarantee

As an alternative, I think it's worth investigating the pro's & cons of setting up a "consultancy" Thai company (introduced fairly recently). As I currently understand it, you'd only need to show one nominal Thai employee for tax purposes and you'd see benefits in terms of long-term visa, legitimate work permit etc....... and you should also avoid double taxation in Thailand/UK.

Do a search for "consultancy" on the forum and you'll see more of the details. Beyond that, I also suggest that you contact Sunbelt Asia (forum sponsor) who know the score on all this and could advise you and set it up for you if it looks attractive in your case.

[Blake7]

You could get a one year business visa (you would still have to do a visa run every three months).

Also set up a bank in Jersey and get your salary paid gross there. You should't have to apy tax if you fill out the right non-residency forms.

[sabaijai]

I believe you're still subject to Thai taxation whether or not you pay taxes in another country. At least I've been paying Thai tax for years, and the Revenue Dept knows I'm also taxed in two other countries (one my country of citizenship, the other where I make most of my income, even though I reside full-time in Thailand).

[Gary A]

I have a good friend who also makes his living off the Internet. He keeps a low profile and enjoys life.

[purplesage]

I believe you're still subject to Thai taxation whether or not you pay taxes in another country. At least I've been paying Thai tax for years, and the Revenue Dept knows I'm also taxed in two other countries (one my country of citizenship, the other where I make most of my income, even though I reside full-time in Thailand).

In the European Union you're taxed in your country of residence, regardless of the country the income derives from. What I'm unclear about is whether I could apply for a self-employed working visa in Thailand and issue invoices for work received from Europe - the companies and organisations I do jobs for usually need an invoice and, if I were living in Thailand, I'd no longer have self-employed status in Italy.

[PFV]

I believe you're still subject to Thai taxation whether or not you pay taxes in another country. At least I've been paying Thai tax for years, and the Revenue Dept knows I'm also taxed in two other countries (one my country of citizenship, the other where I make most of my income, even though I reside full-time in Thailand).

In the European Union you're taxed in your country of residence, regardless of the country the income derives from. What I'm unclear about is whether I could apply for a self-employed working visa in Thailand and issue invoices for work received from Europe - the companies and organisations I do jobs for usually need an invoice and, if I were living in Thailand, I'd no longer have self-employed status in Italy.

Hi Purplesage, here are my two cents worth:

As a resident of Italy you need a partita IVA code that needs to be printed on your invoices. After you move to Thailand you will invoice as a non-resident, no need for partita IVA, etc. When you arrive in Thailand you will probably get a local drivers license and register with your Embassy; this should be able to prove to any Italian authorities that you no longer reside in Italy. The Italians are not concerned with your legal right to work in Thailand, just that you are no longer officially residing in the EU and therefore no longer subject to their taxation.

On the Thai side you should pay income tax on the income you actually bring into Thailand each year, not on the lump sum you earn. So if you make $50K a year but only bring in $20K, you pay tax on the $20K.

However, you could choose to keep your mouth shut and "fly under the radar", unless you are afraid of some jealous neighbor reporting you.....

If you need more anonymity, just set up an offshore company and invoice under its name and address (I would go for one of the inexpensive Caribbean solutions). Then, you can simply claim that you are retired and living off a "reverse-mortgage loan" from this offshore company having put op some undisclosed property you own as collateral. This is just one option of course.

[rishi]

What I'm unclear about is whether I could apply for a self-employed working visa in Thailand ....

This one has a simple answer: Not possible. Maintaining a 'working visa' (officially called non-imm "B" visa) goes hand in hand with maintaining a workpermit. You can only get a workpermit if you are employed by a Thailand registered company. There is no such thing as legal self-employment for foreigners in Thailand.

The closest would be that Consultancy company, mentioned by steve2UK above.

[sungod]

Ok mate, realise you are only trying to do the right thing. But I know an English bloke down my pub who has left the UK and resides in Thailand. He has notified the Tax man in the UK to this effect. He has an offshore bank account in the Channel Islands where he gets paid ( uses his Thai address on his invoice) and transfer money across to his Thai bank account as needed. He resides with his wife on an Non-imm 'o' and is under 50 but suggests you may get a retirement visa. No hassle, no one asks nothing and no one cares. Maybe if you are that worried you could invoice from a PO Box say in Jersey. I think if you just sit at home on your computer and keep yourself to yourself no one will really care.

[purplesage]

Many thanks to all those who replied to my post.

It seems that getting a self-employed working visa is impossible, but "keeping under the radar" sounds highly feasible. I'll also consider the suggestions about opening an offshore bank account to facilitate billing. Being a consultant or starting an offshore company, seems like going to extraordinary lengths for my small-scale, one-man operation. All I want is a quiet, winterless life with occasional injections of income. In short, la dolce vita, which with rampant inflation, Byzantine bureaucracy and swingeing taxes is a thing of the past in Italy.

In any case, I should consider myself lucky on two counts: eligibility for a retirement visa and a source of income that allows me to work from anywhere.

Purplesage

[thohts]

You're not doing business in Thailand or "taking jobs away from Thais" so you don't need a work permit. Your work is over the internet and, really, nobody thus cares.

Regarding the US tax thing.. if you're out of the country for 10 consecutive months (I think.. maybe 11), then you are not taxed on the first $80,000 of your income for the year. You still must file, however. Check the IRS for more info.

[thohts]

I believe you're still subject to Thai taxation whether or not you pay taxes in another country. At least I've been paying Thai tax for years, and the Revenue Dept knows I'm also taxed in two other countries (one my country of citizenship, the other where I make most of my income, even though I reside full-time in Thailand).

Check out the guide, "A Summary of Thailand's Tax Laws" here. The section on individuals begins on page 11

Here's a quote:

A person (Thai or foreign) who resides in Thailand at one or more times for an

aggregate period of 180 days or more in any tax (calendar) year will be regarded as a

resident of Thailand for tax purposes. A resident of Thailand is liable for personal

income tax on income from sources inside Thailand and on assessable income derived

from sources outside Thailand. However, the imposition of tax on income derived

outside Thailand will apply only to income derived and brought into Thailand in the

same year in which such income is earned. A non-resident is subject to pay tax only

on income from sources within Thailand (irrespective of the place of payment).

Edited March 30, 2006 by thohts

[purplesage]

Thanks for the tax document, which I'll have a look at.

In your previous post you suggest I don't need a work permit because the income would not be taking away anybody's job in Thailand. Fair enough.

But how could I file a tax return for income received from abroad if I have a retirement visa that doesn't give me the right to work?

As I said in a previous post, I wouldn't have to pay taxes in the countries from which I receive work (in the European Union) as, according to EU logic, tax is levied in your country of residence.

[wrongway]

Thanks for the tax document, which I'll have a look at.

In your previous post you suggest I don't need a work permit because the income would not be taking away anybody's job in Thailand. Fair enough.

But how could I file a tax return for income received from abroad if I have a retirement visa that doesn't give me the right to work?

As I said in a previous post, I wouldn't have to pay taxes in the countries from which I receive work (in the European Union) as, according to EU logic, tax is levied in your country of residence.

Purplesage,

Being in a similar situation, I'm following this with interest. The more I read, the more I think about returning to that low profile. I am in thailand, visa-on-entry, for about 330 days a year. The other days I am in Japan or Europe on business. Sounds like I should be paying taxes according to the post by Thohts. I think I'm too stupid to understand this. . . so, back to my low profile.

As for the US, the $80,000 thing, it refers to salaried (employed) individuals, not those who are self employed. That was my status for 14 years in Japan. The $80,000 also refers to income after your foreign tax office has given you all the deductions and exemptions you are allowed. So, I was earning around $80,000 a year depending on the exchange rate, but after this and that was taken out of it for tax purposes the official number was around $45,000. I didn't even know I was required to file until many years later. My brother is a CPA in the US and he helped me take advantage of a program to bring back non-filers like myself. Filed for a number of years though didn't have to pay anything. Then I fell down and landed in Thailand, living for a number of years under the US poverty level, so I couldn't be bothered about filing, especially when I learned I owe them roughly 15% of my income no matter the amount earned as self-employed. Now I could continue taking my main source of income in the self-employed form, or I could have the Japanese company arrange it as a salary. Then they'd have to take out 20% withholding, some of which I may or may not get back. But the Japanese tax office is much less frightening than the US IRS who is happy to pursue individuals like me to set an example. Amazing the worries that arise in conjunction with rising income. . . And it seems so easy to just lay low, as they (the Thai side) probably don't care.

There must be a lot of retired individuals out there who still have businesses or are in some way generating income. Are any of you paying Thai taxes? No replies? Well, that would mean no, then.

[purplesage]

Thanks for the tax document, which I'll have a look at.

In your previous post you suggest I don't need a work permit because the income would not be taking away anybody's job in Thailand. Fair enough.

But how could I file a tax return for income received from abroad if I have a retirement visa that doesn't give me the right to work?

As I said in a previous post, I wouldn't have to pay taxes in the countries from which I receive work (in the European Union) as, according to EU logic, tax is levied in your country of residence.

Purplesage,

Being in a similar situation, I'm following this with interest. The more I read, the more I think about returning to that low profile. I am in thailand, visa-on-entry, for about 330 days a year. The other days I am in Japan or Europe on business. Sounds like I should be paying taxes according to the post by Thohts. I think I'm too stupid to understand this. . . so, back to my low profile.

As for the US, the $80,000 thing, it refers to salaried (employed) individuals, not those who are self employed. That was my status for 14 years in Japan. The $80,000 also refers to income after your foreign tax office has given you all the deductions and exemptions you are allowed. So, I was earning around $80,000 a year depending on the exchange rate, but after this and that was taken out of it for tax purposes the official number was around $45,000. I didn't even know I was required to file until many years later. My brother is a CPA in the US and he helped me take advantage of a program to bring back non-filers like myself. Filed for a number of years though didn't have to pay anything. Then I fell down and landed in Thailand, living for a number of years under the US poverty level, so I couldn't be bothered about filing, especially when I learned I owe them roughly 15% of my income no matter the amount earned as self-employed. Now I could continue taking my main source of income in the self-employed form, or I could have the Japanese company arrange it as a salary. Then they'd have to take out 20% withholding, some of which I may or may not get back. But the Japanese tax office is much less frightening than the US IRS who is happy to pursue individuals like me to set an example. Amazing the worries that arise in conjunction with rising income. . . And it seems so easy to just lay low, as they (the Thai side) probably don't care.

There must be a lot of retired individuals out there who still have businesses or are in some way generating income. Are any of you paying Thai taxes? No replies? Well, that would mean no, then.

Wrongway,

Your question seems to have been answered. Perhaps we're more of minority than we thought.

All the best.

Purplesage

[kudroz]

In your previous post you suggest I don't need a work permit because the income would not be taking away anybody's job in Thailand. Fair enough.

But how could I file a tax return for income received from abroad if I have a retirement visa that doesn't give me the right to work?

I have the same exact question... I am in the same situation as purplesage

[purplesage]

In your previous post you suggest I don't need a work permit because the income would not be taking away anybody's job in Thailand. Fair enough.

But how could I file a tax return for income received from abroad if I have a retirement visa that doesn't give me the right to work?

I have the same exact question... I am in the same situation as purplesage

Kudroz,

Are you actually in Thailand on a retirement visa, and doing your thing, or - like me - are you just planning to do so and weighing up the options?

Purplesage

[kudroz]

Kudroz,

Are you actually in Thailand on a retirement visa, and doing your thing, or - like me - are you just planning to do so and weighing up the options?

Purplesage

I am on a Tourist Visa at the moment and planning to stay here for a long time. I receive income from work I do over the internet from google adsense and the like.

I'd rather not setup a company since there is an automatic 70% writte off (no invoice required) from gross income as self-employed. That's really interesting to me, that's why I'd rather not setup a company here but be self-employed... but more I look - it looks like this is impossible to do.

[Rumpole]

With regard to billing, you could register a UK Limited Liability Partnership (LLP), which might inspire more confidence in your clients than some offshore Carribean setup. It's considerably cheaper, too - only a 20 pound registration fee + mail drop as a registered office. You need a minimum of two partners (Thai wife, girlfriend can hold 1% or 0.5% or whatever of the equity), and as long as all partners are non-resident and the LLP does not trade (i.e. derive income) in the UK, there is no liability for UK tax. The only sight downside is that you do have to file a balance sheet and an annual return.

Edited April 11, 2006 by Rumpole

[tjo o tjim]

I'm also in the "tourist with foreign interests" category. I would suggest setting up multiple small companies as needed to serve your clients.

For self-employment, ACH deposits and mail forwarding services are a god-send.

For the USA, most small businesses lose a few thousand dolars a year, and as self-employed you wouldn't pay the 15% social security tax if you lose money.

Based on ThaiVisa advice, I didn't set up a formal company. Happy I didn't go the formal route, my personal situation doesn't warrant it.