Incorporating a cryptocurrency hedge fund in Singapore as a Thailand resident

[rm777]

Hi guys,

Great forum, have been scouring the Internet for something like this and the amount of information and knowledgeable people on here is really something to behold!

I am a Canadian citizen and I am interested in creating a hedge fund in a trustworthy jurisdiction that doesn't require extensive licensing for handling OPM and buying/selling securities.

I understand that Singapore residency is very hard to get. I contacted an offshore specialist and he suggested that instead of trying to get Singapore residency, I should get the Thailand Elite Visa which will grant me 5 years of entry. Through the Visa I will be able to achieve de facto personal tax residency status if I stay there for 183 days.

Thailand doesn't seem to have Controlled Foreign Corporation laws. A resident is also subject to Thai tax on foreign-sourced income, but only if that income is remitted to Thailand in the same year it is received.

Would it be viable to incorporate in Singapore and run the company from Thailand?

Any help would be greatly appreciated.

 

[PiersBlack]

If you're the shareholder/director of the company and reside in Thailand, you're effectively managing the company from Thailand (permanent establishment) and therefore it is technically a resident in Thailand and subject to local corporate tax. The question is, is it enforced or actively monitored by local authorities? That's what you need to consider.

Also, keep in mind having an Elite visa doesn't grant you permission to "work". But then again, the previous question remains...

 

[rm777]

If you're the shareholder/director of the company and reside in Thailand, you're effectively managing the company from Thailand (permanent establishment) and therefore it is technically a resident in Thailand and subject to local corporate tax. The question is, is it enforced or actively monitored by local authorities? That's what you need to consider.

Also, keep in mind having an Elite visa doesn't grant you permission to "work". But then again, the previous question remains...

Yeah, I've read about this as well. But I can't seem to get a conclusive answer anywhere. I've also seen the argument that engaging in speculation is not considered "work" in Thailand and therefore there is no breach of terms of the Elite Visa.

Based on my latest interpretations, Thailand does not tax foreign income of any kind as long as you don't bring it into the country in the same year you earned it, even if you earned it while in Thailand. This might be why Thailand does not pursue digital nomads as aggressively as some other countries, because they simply can't be taxed anyway.

This in contrast to most countries with a territorial tax system which will tax you based on where you were when you earned the money, which determines if the income is locally or foreign sourced and thus taxable.

Basically Thailand only looks at the location of the money, where other countries look at the location of the person making it.

I would prefer Singapore residency but I don't think I will be able to qualify through the EntrePass. I wonder if it would be possible to self-sponsor residency from my own company through the Employment Pass?

 

[seabreeze]

If you're the shareholder/director of the company and reside in Thailand, you're effectively managing the company from Thailand (permanent establishment) and therefore it is technically a resident in Thailand and subject to local corporate tax. The question is, is it enforced or actively monitored by local authorities? That's what you need to consider.

Also, keep in mind having an Elite visa doesn't grant you permission to "work". But then again, the previous question remains...

Sponsoring an employment pass and living in Singapore is an option, but you'd need to have a couple of year's salary and running costs on account balance first.

By virtue of your living in Thailand, the Singapore Co. does not automatically become liable to tax or is not automatically tax resident in Thailand. Some of the following factors will contribute to such an outcome: performing work for the SG CO from the territory of Thailand, having an office or a home-office available from which acts of control take place (sign documents, engage the company verbally in deals etc.), having clients and a majority of directors resident in Thailand.

The Thailand Elite Visa is a very expensive way to live in Thailand, but hey, to each his own.
Another option I would consider is setting up a BOI company. If you plan to buy a house in Thailand, the latter makes more sense. This BOI could in some circumstances be used to bill the SG entity for services (for as long as said services fall under BOI criteria) and, if the SG entity is not seen as controlled directly by you, it would justify your presence in Thailand as well as your appearance of working and income.

For the easiest more or less compliant solution, you could do the following:

- Make sure the Singapore Co. does not belong directly to you (trust) and that you are not director (nominee). You can take on a consultant role regarding the trades, and that too, preferably via an offshore company with a nominee. Be equally careful in not controlling the offshore consulting-Co directly too. That way, the setup will have very few exterior tell-tale signs that the Singapore entity is a Permanent Establishment in Thailand. And even if someone decided to dig deep, you could be found as working without a permit for the second offshore, it would likely be maintained that there is no link with a position of authority between you in TH and the SG entity.

Another idea with another jurisdiction:

- A Labuan entity is not too expensive. You could spin one up to hire you, even with near-zero activity (the downside is that it'd be subject to regular MY tax, but hey, no income so who cares) and then live just across the border from Singapore.
- You might consider just plain using a Labuan entity and having a rep office accross the border from SG. You could even open a rep office in SG on behalf of the Labuan entity if you really wanted to.


Last but not least, do yourself a favor and make sure all BoD and BoS meetings take place in SG over several days, several times a year, and that they are very well documented. You'd want to be able to PROVE that control took place in SG.

 

[dimitri]

I live in Thailand. With most visa you are not allowed to work. But it's a grey area.

"Thailand does not tax foreign income of any kind as long as you don't bring it into the country in the same year you earned it, even if you earned it while in Thailand. "

This is wrong. The "even if you earned it while in Thailand. " part. The problem is that this is difficult to prove. If you stay 183 days a year in Thailand and 182 days not and you have your own company... It is possible that you worked in your company while not being in Thailand. You worked outside of Thailand for 182 days, and the 183 days you were in Thailand you did nothing. And that is how you make your money. You don't have to pay tax.

There are people who live in Thailand and work in the oil industry. They leave for some months to work. They keep their money on a foreign bank account and only transfer it after a year. So they don't have to pay tax.

Thailand is a bit strange. I know people living here already for over 10 years who never paid any tax in Thailand. Some visa require that you have money in a Thai bank account for the annual renewal of your visa. Depending on the visa this is about 12000 - 24000 Euro. That amount of money must be in the bank account every year when you renew your visa again. And you must prove that it came from abroad. That is all. They don't ask you how you got that money, how you make money. It seems that they are not interested at all. For digital nomads this is a beautiful country to live in.

I think that they are already happy if
A) you make your money abroad, which means that you did not make it in Thailand and that you did not take jobs from Thai people and
B) That you live in Thailand and spend your money here, and by doing so you are supporting the local economy.

 

[Dasboot]

Thailand is "flexible" for sure!

Will it remain so? Probably, too many powerful people who won't let them introduce full on surveillance schemes that easily...

According to an ex private banker I know there was some offensive planned for 2020 looking into smaller transfers than before, but now that is all out of the window.

Everything will be about survival now, even for the large corporations after a while. And IF the country opens up there will be a surge in visitors & everyone will be super happy getting a bit of the cash!

 

[username84447]

@rm777 I'm curious if you have an update of how you were able to manage this? Did you end up learning any more about this setup?