American working in Thailand for HK company

[kaneda]

Hell,

I moving to Bangkok to live but will be an independent contractor for a Hong Kong company. I will perform various duties for them, and send them an invoice which they will pay me either through the bank in the US or Thailand. How does taxes work? When people work as an employee, their employer withhold taxes (federal, state, local, ss, md, etc) for them. But I will just get a check/payment with no deduction I assume because you don't pay taxes in HK if you live outside of it. When I file my taxes, do I just report my earning and pay during tax season?

Thanks

[ubonjoe]

If you are going to be working here you will need a work permit.

Unless you are working for a company here you would have to do a annual tax return and pay all at one time.

They don't deduct taxes from incoming transfers.

[digitalchromakey]

More importantly, you need to consider as to how you are going to obtain a Work Permit, which would be definitely required by Thai Law, even if you are paid overseas for the work you do here.

Best way would be to set up a Thai Representative Company which would employ you thus your taxes would be due through that Thai Company.

[Soutpeel]

More importantly, you need to consider as to how you are going to obtain a Work Permit, which would be definitely required by Thai Law, even if you are paid overseas for the work you do here.

Best way would be to set up a Thai Representative Company which would employ you thus your taxes would be due through that Thai Company.

but wouldn't he need to repatriate THB 5.0 million into Thailand ?

[digitalchromakey]

More importantly, you need to consider as to how you are going to obtain a Work Permit, which would be definitely required by Thai Law, even if you are paid overseas for the work you do here.

Best way would be to set up a Thai Representative Company which would employ you thus your taxes would be due through that Thai Company.

but wouldn't he need to repatriate THB 5.0 million into Thailand ?

Think the 5 Million Capitalisation would apply for a Foreign Company Branch.

As regards a representative Company Office the BOI notes say:

Representative Offices of Foreign Companies

A representative office is defined as an office in Thailand of a foreign company engaged in the business of international trading. A representative office in Thailand cannot engage in any profit-seeking or profit-making enterprise. The scope of activities of a representative office must be limited to approved activities, or significant Thai tax liabilities can arise. The risk of exceeding the scope of activities is that the income of the parent or affiliated companies may be deemed earned in Thailand and subject to taxation.

If the representative office engages in other activities for which permission is not granted, such as buying or selling goods on behalf of the head office, it will be regarded as doing business in Thailand and may be subject to Thai taxation on all income received from Thailand. Also, the representative office may not act on behalf of third persons. Any such business or income-earning activities could amount to a violation of the conditions of the license to establish and operate a representative office, which in turn could result in revocation of that license.

A representative office which undertakes one or more of the approved activities in Thailand without rendering any service to any other person, and which refrains from prohibited activities, is not subject to Thai taxation. Such a representative office is understood to be receiving a subsidy from the head office to meet its expenses in Thailand. Gross receipts or revenues received by a representative office from the head office are not characterized as revenue to be included in the computation of juristic person income tax.

Even though they are not subject to taxation in Thailand, all representative offices are still required to obtain a Corporate Tax Identification number and submit income tax returns and audited financial statements to the Revenue Department. They are also required to submit the same to the Department of Business Development.

No idea what the nature of the OP's business is, but is may or may not be met by a Representative Office or Foreign Office Branch.

Which ever way, a Work Permit would be required and if the above company types are not appropriate, then a Thai Ltd Company would need to be correctly constituted and formed as an umbrella for the OP's Work/tax activities here.

[Soutpeel]

More importantly, you need to consider as to how you are going to obtain a Work Permit, which would be definitely required by Thai Law, even if you are paid overseas for the work you do here.

Best way would be to set up a Thai Representative Company which would employ you thus your taxes would be due through that Thai Company.

but wouldn't he need to repatriate THB 5.0 million into Thailand ?

Think the 5 Million Capitalisation would apply for a Foreign Company Branch.

As regards a representative Company Office the BOI notes say:

Representative Offices of Foreign Companies

A representative office is defined as an office in Thailand of a foreign company engaged in the business of international trading. A representative office in Thailand cannot engage in any profit-seeking or profit-making enterprise. The scope of activities of a representative office must be limited to approved activities, or significant Thai tax liabilities can arise. The risk of exceeding the scope of activities is that the income of the parent or affiliated companies may be deemed earned in Thailand and subject to taxation.

If the representative office engages in other activities for which permission is not granted, such as buying or selling goods on behalf of the head office, it will be regarded as doing business in Thailand and may be subject to Thai taxation on all income received from Thailand. Also, the representative office may not act on behalf of third persons. Any such business or income-earning activities could amount to a violation of the conditions of the license to establish and operate a representative office, which in turn could result in revocation of that license.

A representative office which undertakes one or more of the approved activities in Thailand without rendering any service to any other person, and which refrains from prohibited activities, is not subject to Thai taxation. Such a representative office is understood to be receiving a subsidy from the head office to meet its expenses in Thailand. Gross receipts or revenues received by a representative office from the head office are not characterized as revenue to be included in the computation of juristic person income tax.

Even though they are not subject to taxation in Thailand, all representative offices are still required to obtain a Corporate Tax Identification number and submit income tax returns and audited financial statements to the Revenue Department. They are also required to submit the same to the Department of Business Development.

No idea what the nature of the OP's business is, but is may or may not be met by a Representative Office or Foreign Office Branch.

Which ever way, a Work Permit would be required and if the above company types are not appropriate, then a Thai Ltd Company would need to be correctly constituted and formed as an umbrella for the OP's Work/tax activities here.

As far as I am aware a foreign representative per you definitions requires at total a THB 5.0 million repatriated into Thailand the first THB 3.0 mil in the first year and the balance over a 5 year period, if I remember it correctly, this requirement doesn't refer to captialisation of the business, but for operating costs, and salaries...also I believe you can only have a Rep office in Thailand for a period of 5 years max.

[Timwin]

http://www.thaivisa.com/forum/topic/726580-working-for-a-company-outside-thailand/

Quite controversial subject even among law firms. Phuket seems to have the harshest officers interpretating the work permit laws but other places are more lenient. You cannot simply get a work permit for one man consultant firm without employing 4 Thais and putting substantial amount of money into a new Thai company and without even having the majority of shares. Cambodia has much better laws, allowing everything from one man band to large foreign companies.

Edited May 30, 2014 by Timwin

[digitalchromakey]

Think the 5 Million Capitalisation would apply for a Foreign Company Branch.

As regards a representative Company Office the BOI notes say:

Representative Offices of Foreign Companies

A representative office is defined as an office in Thailand of a foreign company engaged in the business of international trading. A representative office in Thailand cannot engage in any profit-seeking or profit-making enterprise. The scope of activities of a representative office must be limited to approved activities, or significant Thai tax liabilities can arise. The risk of exceeding the scope of activities is that the income of the parent or affiliated companies may be deemed earned in Thailand and subject to taxation.

If the representative office engages in other activities for which permission is not granted, such as buying or selling goods on behalf of the head office, it will be regarded as doing business in Thailand and may be subject to Thai taxation on all income received from Thailand. Also, the representative office may not act on behalf of third persons. Any such business or income-earning activities could amount to a violation of the conditions of the license to establish and operate a representative office, which in turn could result in revocation of that license.

A representative office which undertakes one or more of the approved activities in Thailand without rendering any service to any other person, and which refrains from prohibited activities, is not subject to Thai taxation. Such a representative office is understood to be receiving a subsidy from the head office to meet its expenses in Thailand. Gross receipts or revenues received by a representative office from the head office are not characterized as revenue to be included in the computation of juristic person income tax.

Even though they are not subject to taxation in Thailand, all representative offices are still required to obtain a Corporate Tax Identification number and submit income tax returns and audited financial statements to the Revenue Department. They are also required to submit the same to the Department of Business Development.

No idea what the nature of the OP's business is, but is may or may not be met by a Representative Office or Foreign Office Branch.

Which ever way, a Work Permit would be required and if the above company types are not appropriate, then a Thai Ltd Company would need to be correctly constituted and formed as an umbrella for the OP's Work/tax activities here.

As far as I am aware a foreign representative per you definitions requires at total a THB 5.0 million repatriated into Thailand the first THB 3.0 mil in the first year and the balance over a 5 year period, if I remember it correctly, this requirement doesn't refer to captialisation of the business, but for operating costs, and salaries...also I believe you can only have a Rep office in Thailand for a period of 5 years max.

As Regards a Foreign Company Branch, the BOI notes match your description above, they say:

Branches of Foreign Companies

Foreign companies may carry out certain business in Thailand through a branch office. Branch offices are required to maintain accounts only relating to the branch in Thailand.

There is no special requirement for foreign companies to register their branches in order to do business in Thailand. However, most business activities fall within the scope of one or more laws or regulations that require special registration (e.g., VAT registration, taxpayer identification card, Commercial Registration Certificate, Alien Business License, etc.), either before or after the commencement of activities. Therefore, foreign business establishments must follow generally accepted procedures.

It should be borne in mind that the branch is part of the parent company and therefore the parent retains legal liability for contracts, and for tortious acts done. For tax purposes, a branch is considered a permanent establishment, and its revenue is subject to Thai tax. It is important to clarify beforehand what constitutes income that is subject to Thai tax because the Revenue Department may consider revenue directly earned by the foreign head office from sources within Thailand to be subject to Thai tax.

A condition for approval of a Foreign Business License for a branch of a foreign corporation is that minimum capital amounting to no less than five million baht be brought into Thailand within four years of start-up. The branch may be allowed to operate for a period of five years, unless a shorter period is applied for. Extension of the original duration of the license to operate may be granted, provided that the working capital to be brought into Thailand requirement is met.

Not sure if Representative Companies are subject to the same restrictions, nothing I can see in the BOI notes.

[farang62]

Forget all that , You are an American, set up a "Thai American Amnity Treaty" company.

It is easy and a lot of help from the Embassy to set it up.

I have had mine since 1992 and never looked back, tremendous advantages and perks, especially from the United States. Exports to Thailand easier, less restrictions. And you can own the company 100% with no foreign partner required.

Just clarify the treaty is between The King Of Thailand and The President of the United States, not the government past or present.

I am now selling my company and have a lot of intrest from companies that want an established presence in S.E. Asia.

Everything is , well just easier.

Good luck