Forex trading for additional side income

[siamrak]

Been searching through TVF for "forex" and it seems most or all the prior threads on this topic are archived so I couldn't just reply to any on them and am opening a new thread. Basically, I will be moving to Thailand in a couple of months. I will be able to get a non-immigrant visa/WP through my employer separately so that is not an issue. However, I also trade forex on the side as a source of additional income/savings for myself, and am wondering if I need to "declare" this as a source of income? (Granted, "WHO" would I declare to anyway? The work visa I get would recognize the employer who is paying me and under whom any taxes I need to pay would be taken care of.) My broker is US based so all profits are, technically, "booked in US" furthermore.

In addition, I was thinking of opening a joint brokerage account for fx trading with a friend of mine who is a Thai citizen. We might open via an Aussie broker. Since the account would be under his name and he is Thai, are there any type of taxes that Thai citizens would be liable for? Does Thailand have capital gains taxes on financial instruments trading?

Edited September 20, 2014 by siamrak

[enuff said]

.

Just a short answer to get the ball rolling. I am pretty sure any money you make outside that is then brought into Thailand, you have to declare as income.

Investment income prolly.

I'm sure others will reply as soon as the bars close.

~

[bertty]

I never knew trading online was a guaranteed money maker.

[siamrak]

.

Just a short answer to get the ball rolling. I am pretty sure any money you make outside that is then brought into Thailand, you have to declare as income.

Investment income prolly.

I'm sure others will reply as soon as the bars close.

~

Thanks for your input - makes sense! As some additional info to give a clearer picture, I can say that investment account(s) are linked to US banks with branches in Thailand so technically I wouldn't be transferring any money into whatever Thai bank account(s) I set up, but rather, be withdrawn via ATMs in Thailand. So in that sense again it would purely be my own spending money. My purpose for the side income I make is for extra disposable income here and there and saving the rest in my [uS] bank account. But I do understand that if I seek to transfer over US$10K into Thailand then that's going to be a different ball game.

[Rooo]

Moved to business forum.

[mahjongguy]

"...US banks with branches in Thailand"

There's really no such thing. Take Citibank, for example. They have a few ATM's in Bangkok, yes. Using them allows you to avoid the transaction fees you would otherwise have to pay at the ATM's of Thai banks. You can also perform other types of actions involving your U.S. accounts. That's good. But, the Citibank offices themselves represent Citibank Thailand and provide no services related to to your U.S. accounts.

"...if I seek to transfer over US$10K into Thailand then that's going to be a different ball game."

What does that refer to? Visibility? Taxability? FATCA?

[Naam]

"...if I seek to transfer over US$10K into Thailand then that's going to be a different ball game."

no game, no hassle and no worries even if you transfer 100k or 500k US-Dollars.

[worgeordie]

A very good way to loose money if you don't know what you are doing,

you must really trust your Thai friend if account is going to be in his name.

regards Worgeordie

[TommyUK1960]

I never knew trading online was a guaranteed money maker.

I have never met anyone in Thailand who makes money from trading. Even the big boys in the city lose out some times.

[Ludacris]

The way I understand it is as long as you are investing or trading your own money through your own account (as opposed to running a business trading other people's money and collecting fees) than there is no need to have a work permit or declare profits. Using your own money is not considered working.

This makes sense since there's no capital gains tax in Thailand, so if you're just profiting (or losing!) from your own personal trading and not collecting fees or running a business, I can't see how it would be taxed anyways.

[mahjongguy]

"...since there's no capital gains tax in Thailand"

Hogwash, unless you mean there is no special tax rate for capital gains. Profit is income, with the single exception that gains made from selling individual equities on the SET are not taxed.

[choochoo]

I never knew trading online was a guaranteed money maker.

Usually taxes are the least of worries. No need to pay taxes on LOSSES/...................lol.

[Ludacris]

Of course I meant there's no capital gains on the SET, as well as no tax on any kind of capital gains from overseas.

To answer the original question, if the OP lives in Thailand long enough throughout the year and therefore becomes a tax resident of Thailand (and is not American!) all his overseas and Thai capital gains from trading will be tax free. Dividends will have withholding tax applied at the rate in the tax treaty if from overseas stocks.

[Lukecan]

I'm going to play the devils advocate here.

I wouldn't declare it If I were you, why should you pay the Thai government tax on your income stream from the USA?

Just withdraw the cash from a citibank ATM.

By the way congratulations on being a consistent winner on Forex, not a lot of people achieve this feat.

[Ludacris]

You've got it backwards.

There's no need to hide your overseas capital gains from the Thai gov't because there's no tax owed anyways in Thailand. The issue is that if the OP is a US citizen, then even if he becomes a tax resident of Thailand the US will still want him to pay US taxes.

If you're a citizen of any other country in the world besides the US that I'm aware of that taxes capital gains on securities (not talking about property), once you become a tax resident of Thailand then you have no capital gains tax obligations to your home country.

This is one of the major benefits of living in Thailand that's often overlooked...

There's no need to be a superstar at trading to take advantage of being a tax resident of Thailand. This also applies to more long term investments held inside or outside of Thailand which hopefully is relevant to many expats, as well as expats who work here who should be paying a lot less tax on their employment income than in their home country.

[MiclB]

You've got it backwards.

There's no need to hide your overseas capital gains from the Thai gov't because there's no tax owed anyways in Thailand. The issue is that if the OP is a US citizen, then even if he becomes a tax resident of Thailand the US will still want him to pay US taxes.

If you're a citizen of any other country in the world besides the US that I'm aware of that taxes capital gains on securities (not talking about property), once you become a tax resident of Thailand then you have no capital gains tax obligations to your home country.

This is one of the major benefits of living in Thailand that's often overlooked...

There's no need to be a superstar at trading to take advantage of being a tax resident of Thailand. This also applies to more long term investments held inside or outside of Thailand which hopefully is relevant to many expats, as well as expats who work here who should be paying a lot less tax on their employment income than in their home country.

[jagfx]

Reading this thread with interest. My thoughts would be for the OP to seek some good legal or accountancy advice in the US regarding the best way to go about this. The problem in being a US resident, no matter where you live in the world, is that any income you earn is taxed by Uncle Sam. The trick is to reduce this as much as possible by any legal means available.

Without knowing how good (and trustworthy) the Thai friend is, it is hard to make a call on the idea of depositing your funds into an Aussie brokerage account under your friend's name. This doesn't give you much protection if things go pear shaped in the relationship, especially if it involves a difference of opinion when it comes to trading decisions. There maybe some other way under Thai law where you could form a partnership or a Thai company to control this trading account that would give some better protection.

As an Aussie resident myself, Forex Trading is still a very grey area when it comes to any ATO (tax office) rulings and is pretty well treated the same as stock trading for now, even though it is an entirely different type of beast. With Aussie laws similar to the US, any income you make, whether it be trading your own funds or not, are added to your normal job income and taxed accordingly. Personal tax rates are pretty high in Oz, so it is better to trade through a company name as this greatly reduces the tax requirement.

At the end of the day, I would seek professional advice. Might cost you a few dollars, but it would be money well spent that could save you many more dollars in the long run. Good luck with it and be sure to let us know which path you take. Cheers.

[Naam]

There's no need to hide your overseas capital gains from the Thai gov't because there's no tax owed anyways in Thailand.

there's also no need to disclose your offshore capital gains or income to the Thai taxman

[OPG]

Reading this thread with interest. My thoughts would be for the OP to seek some good legal or accountancy advice in the US regarding the best way to go about this. The problem in being a US resident, no matter where you live in the world, is that any income you earn is taxed by Uncle Sam. The trick is to reduce this as much as possible by any legal means available.

Without knowing how good (and trustworthy) the Thai friend is, it is hard to make a call on the idea of depositing your funds into an Aussie brokerage account under your friend's name. This doesn't give you much protection if things go pear shaped in the relationship, especially if it involves a difference of opinion when it comes to trading decisions. There maybe some other way under Thai law where you could form a partnership or a Thai company to control this trading account that would give some better protection.

As an Aussie resident myself, Forex Trading is still a very grey area when it comes to any ATO (tax office) rulings and is pretty well treated the same as stock trading for now, even though it is an entirely different type of beast. With Aussie laws similar to the US, any income you make, whether it be trading your own funds or not, are added to your normal job income and taxed accordingly. Personal tax rates are pretty high in Oz, so it is better to trade through a company name as this greatly reduces the tax requirement.

At the end of the day, I would seek professional advice. Might cost you a few dollars, but it would be money well spent that could save you many more dollars in the long run. Good luck with it and be sure to let us know which path you take. Cheers.

A US Citizen can own 100% of a Thai company as long as they meet specific government requirements.

He can form an offshore company and then establish a subsidiary here in Thailand and establish the trading account through the offshore facility and keep track of it through there for his protection. If your Thai friend will use MT4 to trade, then I strongly suggest that you have the user ID and password to check on his live trading and if any mistakes are occurring or he's gone out of his mind with greed, you can close the account or close trades that he shouldn't have opened etc...and potentially change passwords so he can no longer continue trading your funds.

The smart thing to do, is open a new trading account outside of the USA and utilize your contact address here in Thailand or establish an offshore company and banking and use those details for your contact etc...sign over authority to your Thai friend to trade your account and you have all authority to change passwords whenever you wish and cut him off or close the account before he breaks you. If your friend is inexperienced in FX trading, you are definitely making a WRONG MOVE unless you have so much money that you can afford to lose what he will trade.

Beginners luck happens all the time. You begin to think that you are superman and the greed you begin to feel and act upon will leave you looking like the actors in Dumber and Dumber...broke and telling yourself...why did I do that! GUARANTEED! And I'll be willing to bet on it as well. If you have the knowledge and can control the greed factor, you have a chance in making money, but only if you can control greed.

Good Luck!

[tingtong]

I never knew trading online was a guaranteed money maker.

I have never met anyone in Thailand who makes money from trading. Even the big boys in the city lose out some times.

I have never seen 1 million dollars cash.

Yet I believe it must exist somewhere!

[jagfx]

Some excellent points there OPG. Yes you can control a MT4 account a lot tighter to prevent blow outs or even unauthorised withdrawals. I would even go one step further and invest in some good trade copier software. This can be useful if one person is responsible for the trade settings, for both the actual trading and the money management side of things like close all trades when equity hits a certain level (profit or loss) etc. You can be very creative and set it all up where it does offer you some protection and a safety net. You can also use it to make the money trail very difficult to track if you were so inclined. Not something I would recommend though as always best to be aboveboard just in case a Tax office does come looking for you.

For those that have some negativity about successful forex trading, then I would suggest you check out the two part series that concluded on BBC Two (UK) last night. You can still watch them through their online site or I think they are on YouTube. Episode one was on YouTube anyway. Granted, there are thousands of failing traders out there, but I can assure you there are plenty of successful ones also. Cheers.

[regfrancis]

I've been trading with Etrade for ten years now, and then The on the SET with KTZIMCO, then Saxobank Singapore and CMC Markets in (both worldwide trading) Australia and now London. Its hotting up for me now-- with the total capital much grown. I have formed a company to Operate the investments. I'm proposing a meeting on Sunday 28 Sept in Bangkok, and Wed 1 Oct in Pattaya. We can discuss trading methods, tax strategy and opportunity's for both beginners and experienced traders

Please PM me for meeting details

[siamrak]

Thanks very much to all (Ludacris, OPG, jagfx, et. al.) for adding to the thread and giving me much useful information. It's annoying being a US citizen and having to declare income. Oh well...whatever. It's interesting to know that as long as you are using your own money and trading, then there is no need to have a WP even for that. All the other threads on the topic of people who wanted to move to Thailand (or had already done so) and were going to be making a living via their trading were being advised that even for that trading they would need a WP. So that's fresh, but welcome, news!