Company formation when moving to asia

[Viezeman]

Hello everyone,

I would like to get some advice for my situation,

I own a subscription based website located in the Netherlands. Official im still registered in Netherlands and my company as well as sole entrepreneur. (Eenmanszaak).
The last couple of years im staying most of the time in Thailand and i have plans to relocate here permanently.

The problem with moving my business here is the fact that a Thai person needs to own 51% which is very far from what i want so i need to have a different solution.

im looking for a legal company structure to relocate the business anywhere in the EU to keep the trustworthy image and being able to use my current payment processor.

Now the next step, which of im not sure if its possible or legal, is to form a company in any of the tax haven jurisdictions and send a monthly invoice for licensing/royalties of my platform so i wont have to pay taxes on a big chunk of my profits. Im talking about -+ 230K revenue this year. Last year a Eenmanszaak was still interesting but the revenue is increasing fast.

I dont sell any products, only subscriptions. SFM looks like a trustworthy website to arrange things but most reviews are very bad.

 

[Perry8]

As long as you relocate to Thailand (residency), you can absolutly do it this way.

Open a EU company in Cyprus, Ireland (12,5% tax), or Estonia (20% tax but only on profits that are extracted from the company) for trustworthyness if you think this is required. And you can also have an offshore company in a suitable jurisdiction.

Do not use SFM. I have peronally used them a number of times and it is not recommendable. SFM is a "reseller" in the sense that they use local agents. They will get you your company, but it will take more time and be more expensive than the alternatives. You should find the local agents instead and place your order there.

 

[clemens]

Perry8 said:
Do not use SFM.
Click to expand...

I agree, there is a lot of bad stuff posted about them in the past on this forum.
You can find many local attorneys easely on Google. There is one in the MG Gold where you get a 15% discount which I discovered.

Beside that, you will have great chances to get your setup legally working as @Perry8 already said.

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[John82]

Viezeman said:
Hello everyone,

I would like to get some advice for my situation,

I own a subscription based website located in the Netherlands. Official im still registered in Netherlands and my company as well as sole entrepreneur. (Eenmanszaak).
The last couple of years im staying most of the time in Thailand and i have plans to relocate here permanently.

The problem with moving my business here is the fact that a Thai person needs to own 51% which is very far from what i want so i need to have a different solution.

im looking for a legal company structure to relocate the business anywhere in the EU to keep the trustworthy image and being able to use my current payment processor.

Now the next step, which of im not sure if its possible or legal, is to form a company in any of the tax haven jurisdictions and send a monthly invoice for licensing/royalties of my platform so i wont have to pay taxes on a big chunk of my profits. Im talking about -+ 230K revenue this year. Last year a Eenmanszaak was still interesting but the revenue is increasing fast.

I dont sell any products, only subscriptions. SFM looks like a trustworthy website to arrange things but most reviews are very bad.
Click to expand...

Hi, I would like to say that in Thailand companies can be completely with foreign owners. I personally opened a large number of such companies. I also want to recommend you Singapore company together with Thai company, this structure can close most of your needs. Singapore is a very respectable and trustful jurisdiction with minimal taxes and risks. It depends on your revenue, but most likely the first three years you will not have to pay any taxes there at all.

Last edited: May 2, 2020

 

[Perry8]

John82 said:
Hi, I would like to say that in Thailand companies can be completely with foreign owners. I personally opened a large number of such companies. I also want to recommend you Singapore company together with Thai company, this structure can close most of your needs. Singapore is a very respectable and trustful jurisdiction with minimal taxes and risks. It depends on your revenue, but most likely the first three years you will not have to pay any taxes there at all.
Click to expand...

Interesting idea. How does a typical structure look like? Are you referring to a Singapore holding company with a Thai daughter?

 

[onemansomewhere]

Where are your customers? EU only?
If yes, the best combination is offshore company + company in Hungary. Hungary does not have withholding tax.. And it is EU country.

 

[John82]

No, just two independent companies. Which are counterparties. More specifically, a Singapore company is a supplier to a Thai company.

Perry8 said:
Interesting idea. How does a typical structure look like? Are you referring to a Singapore holding company with a Thai daughter?
Click to expand...

 

[Dasboot]

Viezeman said:
Hello everyone,

I would like to get some advice for my situation,

I own a subscription based website located in the Netherlands. Official im still registered in Netherlands and my company as well as sole entrepreneur. (Eenmanszaak).
The last couple of years im staying most of the time in Thailand and i have plans to relocate here permanently.

The problem with moving my business here is the fact that a Thai person needs to own 51% which is very far from what i want so i need to have a different solution.

im looking for a legal company structure to relocate the business anywhere in the EU to keep the trustworthy image and being able to use my current payment processor.

Now the next step, which of im not sure if its possible or legal, is to form a company in any of the tax haven jurisdictions and send a monthly invoice for licensing/royalties of my platform so i wont have to pay taxes on a big chunk of my profits. Im talking about -+ 230K revenue this year. Last year a Eenmanszaak was still interesting but the revenue is increasing fast.

I dont sell any products, only subscriptions. SFM looks like a trustworthy website to arrange things but most reviews are very bad.
Click to expand...

The thai owner can have a class of shares with no voting power, set it up that way with my company.

 

[CaptK]

If you gain residency in Thailand and sever all ties with Netherlands. Then you can open a UK LLP then take the profit as dividend.

Option 2 Mauritius company owns the IP and then have an EU company that has the licence agreement to market the product. Then they simply process subscriptions take an admin fee and pass the difference on.

 

[JustAnotherNomad]

Why would you need a Thai company? As others have mentioned, can't you set up a company in any other country and then pay yourself a dividend? The way I've understood it is that foreign-sourced dividends are tax-exempt in Thailand.

 

[Dasboot]

JustAnotherNomad said:
Why would you need a Thai company? As others have mentioned, can't you set up a company in any other country and then pay yourself a dividend? The way I've understood it is that foreign-sourced dividends are tax-exempt in Thailand.
Click to expand...

For me: quite simply since I've migrated here & planned on doing lots of real-life networking, events & business!

Now this might have changed, but still having a work permit and business visa is in many ways THE best option other than residency, elite visa or citizenship.

It is also the only real way to permanent residency or citizenship.

 

[JohnLocke]

CaptK said:
If you gain residency in Thailand and sever all ties with Netherlands. Then you can open a UK LLP then take the profit as dividend.
Click to expand...

I know a few guys that did exact that and they regret not to have done that long time before. Only downside, you need to live in Thailand, for some it is Paradise for others it is a shithole. I will live that up to each at their own 🙂

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[JustAnotherNomad]

Sure it works with a LLP? I would think you'd need a Ltd.

 

[JohnLocke]

sorry LTD - forget to correct that. But yes that works with a LTD they are happy.

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[CaptK]

JustAnotherNomad said:
Sure it works with a LLP? I would think you'd need a Ltd.
[

/QUOTE]
Yes because when you take dividends from the profit from the LLP you pay the tax in your home country. No UK tax whatsoever. One layer system, tax exemption on foreign income for foreigners living in Thailand.


The second option could work on a 2 layer system. The point is for tax efficiency which he is trying to achieve, the main company has to be in a efficient jurisdiction. If a UK company holds the IP then is is due for tax. If he uses a Mauritius (or any suitable jurisdiction) for the IP he can license to any EU company as stated in my first answer. His questions was in regards to tax efficiency and keeping the kudos of a EU company.

In my opinion UK LLP is his better and cheaper option.
Click to expand...

 

[JustAnotherNomad]

An LLP cannot pay dividends because it is not an entity of its own for tax purposes. The only way this could happen is if Thailand misclassified it as a foreign corporation (hybrid mismatch).

 

[CaptK]

JustAnotherNomad said:
An LLP cannot pay dividends because it is not an entity of its own for tax purposes. The only way this could happen is if Thailand misclassified it as a foreign corporation (hybrid mismatch).
Click to expand...

Sorry I used dividends instead of profits.
Profits of an LLP are split between the partners.
If any of the partners are not UK tax payers then they would file as so. Everything is declared and transparent with the UK tax authorities. So long as the company paying him is not UK based nor the individual then no tax is applicable. He can send the funds to Thailand tax free. I have many expat clients with this set up.

For Example
Google USA pay him his subscriptions to his UK LLP. No funds came from the UK therefore exempt from UK tax. Pays himself the profit in Thailand.

 

[JustAnotherNomad]

Yes, the UK side is clear. But are you sure this isn't taxed as local income in Thailand?
I thought that only dividends would count as foreign sources and thus exempt from tax in Thailand.

 

[CaptK]

Yes his income will be foreign sourced. He is not carrying out any business in Thailand and so he is exempt. His hosting is abroad, the company is abroad.


If he wants better peace of mind then he should go down the 2 layer route of Mauritius IP holder and UK LTD admin and marketing company.

 

[JustAnotherNomad]

Honestly it sounds risky. I can only speak of European countries where the effective place of management has much more to say than where your website is hosted. But I don't know anything about Thailand, so I'm not saying you are wrong. Probably they don't really enforce taxes on foreigners anyway.
But I agree that the other structure seems safer.