What Happens When I Transfer Foreign Currency From Abroad To A Thai Citizen?

[kudroz]

My wife is doing web work for my company in Canada, and I want to send her salary by wire transfer (needs to be sent by wire so I can deduct it as an expense) - but I was reading about opening a foreign currency account in USD for her... and I'm all confused with all the blah blah on that website

They say the depositor needs to:

submit evidences showing the obligations to pay in foreign

currencies to the following persons:

a) A person abroad such as a merchant in a foreign country

A bank licensed to operate in Thailand including Siam Commercial Bank and BIBF

c) The Export and Import Bank of Thailand

or the Industrial Finance Corporation of Thailand (IFCT) AND

1.) She needs to provide proof why she is receiving funds or am I reading this all wrong? Is she going to be taxed when she receives the funds or at the end of the year when she submits her taxes?

2.) What about she wants to pay for her web hosting by wire transfer as well, is she going to pay witholding taxes when she sends money out of thailand? What about if she opens an account at Kasikorn bank with their e-web card and pay her web hosting that way, any withholding taxes on that?

3.) What happens if she sends herself a wire transfer to her bank account in Canada when we move there permanently in a few years?

4.) I remember I read somewhere that when you send money outside of Thailand you need to pay withholding taxes... but what about travellers cheques? How are they collecting withholding taxes on that?

*edit, i can't spell...

Edited August 23, 2006 by kudroz

[OldAsiaHand]

I've been wiring foreign currency into accounts belonging to Thai citizens for many years without the sightest difficulty. Occasionally, the recipient has been asked by the receiving bank to give them the source of the funds and a reason they were wired, but simply saying 'personal expenses' has always been sufficient, even when the sums were very large. It's not an intelligence operation, just a minimum-wage clerk filling in the blanks.

[thohts]

I've never had an issue in 2 years wiring money to a Thai person.

Does she really *need* to hold her funds in dollars. What's wrong with Thai baht?

#1 I don't think so. But she must pay tax at the end of the year on any salary she receives in Thailand. However, if she only brings in money she has earned in the previous tax year, no tax is due on these funds. Consult a Thai tax attorney for more info.

#3 most likely, she'll receive it

#4 sounds fishy. I've never heard of that.

(By the way, I think SCB has the best foreign exchange rates out of the major banks here.)

The best way to do it, in my opinion, is to set up an account at HSBC in Hong Kong for her. Wire the money to her account there, which can be received and held in Canadian or US dollars. She can then set up accounts that she wants to wire transfer funds to, such as a bank account in Thailand. (She'll also get a better rate if she sends baht instead of dollars, not doing the currency conversion in Thailand)

Good luck!

edit: also, there is a maximum of $20,000 (USD equiv.) you can wire outside of Thailand before they require additional information, such as source of funds. No problem with splitting up transfers, though. also, no proof of any kind for incoming amounts up to 2 million baht, as far as I know. It's sending money that's more of an issue, not receiving.

Edited August 24, 2006 by thohts