How does Thailand Treat US LLCs (partnerships)?

[yngmind]

I want to know how Thailand treats single-owned US LLCs, like a partnership or a corporation.

I have asked perplexity, and that's what I have received - "
Based on the search results, Thailand treats US LLCs that are partnerships for US tax purposes in the following way:

• For US LLCs that are treated as partnerships for US tax purposes, Thailand will generally treat the income derived by the LLC as being derived by the individual partners, not the LLC itself. 134
• This means the partners of the US LLC, not the LLC itself, would be subject to Thai taxation on the income derived through the LLC, depending on their own tax residency status. 34
• However, if the US LLC is treated as a corporation for US tax purposes (e.g. a publicly traded limited partnership), then Thailand will treat the dividends paid by the LLC to its shareholders as being derived by the shareholders, not the LLC itself. 3
• The key factor is how the entity is treated for US tax purposes, not how it is characterized under Thai law. Thailand will generally respect the US tax treatment of the entity. 34

In summary, Thailand tends to look at US LLCs that are treated as partnerships for US tax purposes and tax the individual partners rather than treating the LLC itself as a separate taxable entity. The US tax classification of the entity is the primary determinant for how Thailand will view it.

I think it's a great topic to discuss, if they treat it as partnership, it will be easy to avoid all the taxes legally.

I can ask the PWC in Bangkok these questions because everything about Thailand tax is unclear.

I know they don't enforce anything, there is no CFC and the information about Delaware LLC is private.

The other way is to say you're a passive investor if they treat it as a corporation.

 

[daniels27]

Looking at how much counties like Germany, Switzerland or the UK struggle with US LLCs, I would not expect much clarity on this subject in Thailand.

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But please also be aware that most countries will regard any company managed from within their territory was a local company. Switzerland also does not have CFC rules but thru still have similar laws and even mention this in the paper.

Even in above mentioned counties, they are slow in enforcing anything until you tell them. I know meant that moved to one of those countries and kept paying taxes in their old home without any problems for 1 to 5 years. Just beware. I guess Thailand will be similar. Staying there 3 years without reporting will probably work. If you then declare it, questions and the bill will come. Maybe better declare some income from your LLC or something.

 

[Don]

There are lots of possible scenarios.

Single-member US LLC can theoretically be treated as:
1) tax resident in a jurisdiction where the member is resident (usually subject to tax on its worldwide profits), usually based on management and control or CFC.
2) having a permanent establishment (PE) in the jurisdiction where the member is resident. PE profits are subject to tax, while foreign profits might be exempt since the entity itself is not considered a tax resident in the jurisdiction where it has a PE.
3) having a permanent establishment (PE) in the jurisdiction where the member is not a resident. PE profits are subject to tax in the jurisdiction of such PE, while foreign profits might be exempt since the entity itself is not considered a tax resident in the jurisdiction where it has a PE.
4) not a tax resident in the jurisdiction where the member is resident, nor having a PE. The income derived from the US LLC may be taxed as personal income locally.
5) not a tax resident in the jurisdiction where the member is resident, nor having a PE. The income derived from the US LLC may be regarded as foreign-sourced and not taxed locally. Also, the US doesn't tax such income.
6) not a tax resident in the jurisdiction where the member is resident, nor having a PE. The income derived from the US LLC may be regarded as locally-sourced but not taxed locally due to the absence of taxes in such jurisdiction. Also, the US doesn't tax such income.