IT Freelancer Thailand Offshore Company Setup Recommendation

[gekkof]

Hello guys,

I need to found a company to bill my european clients in the next 2 years and hope you can share insights, point me in the right direction and possibly even recommend the right service provider.

Situation:
- Moved out of Germany.
- Living in Thailand.
- Setup probably just for 2 years. Afterwards, I may move back to Europe.
- IT Freelancer with a single European Client.
- Income ~140k Eur / Year
- Would prefer to be paid in Euro.
- Option to hire myself via a Thai company which provides a Visa and Work Permit and bills my own company.

I read all previous posts but all the information that I could gather was from a guy called Wellington who recommended a Seychelles company with a local director.

Options for companies to found:


US LLC
I could just straight up bill my customer from a US LLC. According to a lawyer I talked to this would most likely cause no trouble in Thailand. However, I'd like to mitigate the risk of establishing a permanent establishment. I.e. my thought process was that a company with at least a little bit of substance and at least a nominee director would lower that risk.


Seychelles IBC + (optional US LLC)
I could just found a Seychelles company with a nominee director or even better with a real director who signs that single contract with my client. However, I heard it would be difficult to get a bank account.
If thats a viable solution please point me to a service provider if you can recommend someone.

For the bank account problem: Is it viable to just found a Seychelles Company which then creates a US LLC? Then, only the US LLC would own a bank account. That should be easier right?


Singapore LTD
A singapore company would also be nice. However, I would not satisfy the requirements (at least officially) to be a tax resident in Singapore. Therefore, I could not use the Singapore startup tax exemption (4.25% CIT on first 100k SGD, 8.25% on 100-200k). This would then lead to a 17% taxation in Singapore. Additionally, double tax agreements would not apply for me. I.e. if Thailand decides that I established a PE, I would have to pay Singapore 17% + Thailand taxes & fines on top.

I don't try to be cheap on the consulting costs but so far neither the international tax consultant (recommended Singapore LTD + Dividenden in Thailand ausschütten) nor the lawyer who had knowledge for the Germany/Thailand scenario (recommended just US LLC) really helped me find a satisfying setup. Would be happy about a second opinion. Thanks in advance for any input!


UAE Freezone Company
I read about Fred who sets up companies in the UAE. Sounds like a good solution with a company with substance but pretty expensive. The setup would cost me 18-22k for 2 years + flights and time spent in Dubai as far as I understood.
However, I'm also willing to go with that setup if it provides me peace of mind because the company has real substance.

 

[troubled soul]

• If you are concerned about the risk of establishing a permanent establishment in Thailand, then I would recommend setting up a Seychelles IBC with a US LLC as a subsidiary. This would give you the best of both worlds: you would be able to minimize the risk of PE while still being able to bill your clients in euros and get a bank account.
• If you are not concerned about the risk of establishing a permanent establishment in Thailand, then I would recommend setting up a US LLC. This is the simplest and most cost-effective option.

 

[JackAlabama]

Hello guys,

I need to found a company to bill my european clients in the next 2 years and hope you can share insights, point me in the right direction and possibly even recommend the right service provider.

Situation:
- Moved out of Germany.
- Living in Thailand.
- Setup probably just for 2 years. Afterwards, I may move back to Europe.
- IT Freelancer with a single European Client.
- Income ~140k Eur / Year
- Would prefer to be paid in Euro.
- Option to hire myself via a Thai company which provides a Visa and Work Permit and bills my own company.

I read all previous posts but all the information that I could gather was from a guy called Wellington who recommended a Seychelles company with a local director.

Options for companies to found:


US LLC
I could just straight up bill my customer from a US LLC. According to a lawyer I talked to this would most likely cause no trouble in Thailand. However, I'd like to mitigate the risk of establishing a permanent establishment. I.e. my thought process was that a company with at least a little bit of substance and at least a nominee director would lower that risk.


Seychelles IBC + (optional US LLC)
I could just found a Seychelles company with a nominee director or even better with a real director who signs that single contract with my client. However, I heard it would be difficult to get a bank account.
If thats a viable solution please point me to a service provider if you can recommend someone.

For the bank account problem: Is it viable to just found a Seychelles Company which then creates a US LLC? Then, only the US LLC would own a bank account. That should be easier right?


Singapore LTD
A singapore company would also be nice. However, I would not satisfy the requirements (at least officially) to be a tax resident in Singapore. Therefore, I could not use the Singapore startup tax exemption (4.25% CIT on first 100k SGD, 8.25% on 100-200k). This would then lead to a 17% taxation in Singapore. Additionally, double tax agreements would not apply for me. I.e. if Thailand decides that I established a PE, I would have to pay Singapore 17% + Thailand taxes & fines on top.

I don't try to be cheap on the consulting costs but so far neither the international tax consultant (recommended Singapore LTD + Dividenden in Thailand ausschütten) nor the lawyer who had knowledge for the Germany/Thailand scenario (recommended just US LLC) really helped me find a satisfying setup. Would be happy about a second opinion. Thanks in advance for any input!


UAE Freezone Company
I read about Fred who sets up companies in the UAE. Sounds like a good solution with a company with substance but pretty expensive. The setup would cost me 18-22k for 2 years + flights and time spent in Dubai as far as I understood.
However, I'm also willing to go with that setup if it provides me peace of mind because the company has real substance.

Figure out the visa for Thailand first. How will you solve that? If you have no clear plan for getting the visa, Malaysia is way easier on this.
Might be best to arrange thru Iglu and the likes.

 

[gekkof]

I got the visa figured out. I will be hired by an EOR company in Thailand. They will bill my own company and add some surcharge to employ me in Thailand.
I'm still a little bit insecure about just a simple US LLC. Waiting for some more opinions on that and then I'm going to implement it.

 

[JackAlabama]

I got the visa figured out. I will be hired by an EOR company in Thailand. They will bill my own company and add some surcharge to employ me in Thailand.
I'm still a little bit insecure about just a simple US LLC. Waiting for some more opinions on that and then I'm going to implement it.

No need to mess around with an Us llc if you can visa and billing in one place.

Otherwise you would need a visa work around for Thailand, which is a big hassle or very costly. What you would save with by not using the thai eor, you will for sure spend in visa related matters.

 

[gekkof]

To clarify, I will partly pay my salary (2k USD) via an intermediate company in Thailand. That should also be enough to cover living costs. The intermediate company (Employer of Record) offer Visa + Workpermit as a service and they will bill me for my own salary + a surcharge for providing their services. The rest of the money I will keep in the US LLC and regularly pay it to an international broker such as IKBR. The visa situation is therefore solved. The consequence is that large parts of my income would not be taxed by Thailand.

 

[JackAlabama]

To clarify, I will partly pay my salary (2k USD) via an intermediate company in Thailand. That should also be enough to cover living costs. The intermediate company (Employer of Record) offer Visa + Workpermit as a service and they will bill me for my own salary + a surcharge for providing their services. The rest of the money I will keep in the US LLC and regularly pay it to an international broker such as IKBR. The visa situation is therefore solved.

Gotcha. Seems like this can work out. Just need to have IBKR in the name of the llc in that case.

 

[gekkof]

Why not pay the money to an international bank account first and then to IBKR?

 

[JackAlabama]

Why not pay the money to an international bank account first and then to IBKR?

Yah also works in case you have one.

 

[Clearsky Network]

Hello guys,

I need to found a company to bill my european clients in the next 2 years and hope you can share insights, point me in the right direction and possibly even recommend the right service provider.

Situation:
- Moved out of Germany.
- Living in Thailand.
- Setup probably just for 2 years. Afterwards, I may move back to Europe.
- IT Freelancer with a single European Client.
- Income ~140k Eur / Year
- Would prefer to be paid in Euro.
- Option to hire myself via a Thai company which provides a Visa and Work Permit and bills my own company.

I read all previous posts but all the information that I could gather was from a guy called Wellington who recommended a Seychelles company with a local director.

Options for companies to found:


US LLC
I could just straight up bill my customer from a US LLC. According to a lawyer I talked to this would most likely cause no trouble in Thailand. However, I'd like to mitigate the risk of establishing a permanent establishment. I.e. my thought process was that a company with at least a little bit of substance and at least a nominee director would lower that risk.


Seychelles IBC + (optional US LLC)
I could just found a Seychelles company with a nominee director or even better with a real director who signs that single contract with my client. However, I heard it would be difficult to get a bank account.
If thats a viable solution please point me to a service provider if you can recommend someone.

For the bank account problem: Is it viable to just found a Seychelles Company which then creates a US LLC? Then, only the US LLC would own a bank account. That should be easier right?


Singapore LTD
A singapore company would also be nice. However, I would not satisfy the requirements (at least officially) to be a tax resident in Singapore. Therefore, I could not use the Singapore startup tax exemption (4.25% CIT on first 100k SGD, 8.25% on 100-200k). This would then lead to a 17% taxation in Singapore. Additionally, double tax agreements would not apply for me. I.e. if Thailand decides that I established a PE, I would have to pay Singapore 17% + Thailand taxes & fines on top.

I don't try to be cheap on the consulting costs but so far neither the international tax consultant (recommended Singapore LTD + Dividenden in Thailand ausschütten) nor the lawyer who had knowledge for the Germany/Thailand scenario (recommended just US LLC) really helped me find a satisfying setup. Would be happy about a second opinion. Thanks in advance for any input!


UAE Freezone Company
I read about Fred who sets up companies in the UAE. Sounds like a good solution with a company with substance but pretty expensive. The setup would cost me 18-22k for 2 years + flights and time spent in Dubai as far as I understood.
However, I'm also willing to go with that setup if it provides me peace of mind because the company has real substance.

I would consider Seychelles or Hong Kong.

 

[palit]

To clarify, I will partly pay my salary (2k USD) via an intermediate company in Thailand. That should also be enough to cover living costs. The intermediate company (Employer of Record) offer Visa + Workpermit as a service and they will bill me for my own salary + a surcharge for providing their services. The rest of the money I will keep in the US LLC and regularly pay it to an international broker such as IKBR. The visa situation is therefore solved. The consequence is that large parts of my income would not be taxed by Thailand.

Thanks I didn't know that EOR Companies exist. I'm also an IT Freelancer from Germany, planning to implement a similar setup. I just saw a webinar with Christoph from Staatenlos about Nevis today (you can find it on YouTube) and thought it could be an interesting alternative to Seychelles or Hong Kong. He said that they used Seychelles in the past too, so there might be an advantage that they use Nevis now. But I can't really compare, since I'm new to these topics. Michael Wohlfart has also some interesting webinars. Can you recommend a EOR Company in Thailand?

 

[scooterguy]

To clarify, I will partly pay my salary (2k USD) via an intermediate company in Thailand. That should also be enough to cover living costs. The intermediate company (Employer of Record) offer Visa + Workpermit as a service and they will bill me for my own salary + a surcharge for providing their services. The rest of the money I will keep in the US LLC and regularly pay it to an international broker such as IKBR. The visa situation is therefore solved. The consequence is that large parts of my income would not be taxed by Thailand.

What's the point of doing this then? If it's for the visa, just get the Thai Elite visa and it will end up being much cheaper.

You may also qualify for some of the Smart visas with 190k a year, though I think your client also needs to meet certain criteria: Thailand SMART Visa | Siam Legal International.

 

[gekkof]

There are many options in Thailand. US LLC + Education Visa from a University or Language school probably works and is by far the cheapest option. However, it just works because Thailand enforcement is slacking and because its intransparent. I'm going with a safe option that involves a SG company. I make use of the startup tax exemption. With all Visa, Tax, Accountin etc. fees I end up at roughly 11% and a pretty safe setup.

There is also a pretty cool thing when you go back to Germany where you can go close to taxless for multiple years. Its kind of a revert exit tax where you get tax credits for your company worth when you relocate to Germany. The company worth is calculated as your profit * ~13 by default which is pretty bad when you leave the country but pretty good if you come back and can deduct the company worth over 15 years. I'll write you a PM palit and we can exchange contact information.

 

[JustAnotherNomad]

Stay away from the UAE. I also wouldn't want to work with a sketchy country like the Seychelles.
I would just go with a US LLC as it's the cheapest option. I don't see any benefit with using a SG company.
I don't know how Thailand handles salaries paid out by a foreign company - if it's not taxed unless remitted the same year, then a company in Estonia or a UK Ltd. could also work.

 

[gekkof]

As I said US LLC most likely works out but if you would like to relocate to Germany in the future your income cannot be tied to a permanent establishment. Germany may declare authority to tax it.
US LLC and paying out salaries apparently works because of weak enforcement. However, its not something that you would want to disclose to German tax authorities in the future.
I talked to 3 international tax consultant 1 was pretty relaxed and said to just go for the US LLC and the other 2 said its strictly speaking not legal. If you are someone who wants to be more or less 100% certain that you won't have future trouble if you decide to relocate to Germany I'd recommend a permanent establishment somewhere. If you are more relaxed about it US LLC seems to work out just fine.

 

[JustAnotherNomad]

I'm not an expert on German tax matters, but I believe that from the German side, it can only be problematic if you don't have any kind of physical place of business.
If you work from your apartment in Thailand, then this should count as a physical office in the eyes of the German tax office, even if it is not registered as a PE in Thailand.

 

[JohnLocke]

Do you still have property in Germany or anything that ties your to Germany?

 

[JustAnotherNomad]

I'm going with a safe option that involves a SG company. I make use of the startup tax exemption. With all Visa, Tax, Accountin etc. fees I end up at roughly 11% and a pretty safe setup.

Why tho? If you don't want to use a partnership like a US LLC or UK LLP, you could use a UK Ltd. or Estonian company and pay yourself a salary, and you should get pretty close to 0% tax.
With an Estonian company, it would actually be 0% if you save the remaining money in the company (you can invest through the company).
Banking would probably also be easier than with a SG entity?

You could probably also hire someone in the Seychelles or so for your US LLC. Then you have a PE there...

 

[troubled soul]

You could probably also hire someone in the Seychelles or so for your US LLC. Then you have a PE there...

Is Singapore will word for this setup ? Yes It cost more but Singapore have good reputation.......Do Singapore works for USA LLC tax free operation ?
Like I am resident of UAE with Golden visa.
My Company is single person US LLC, and hire someone in Singapore ?
If this works ?

@Marzio What is your expert advice on this ?

The presence of a PE is largely irrelevant, except for treaty purposes, as Singapore taxes with reference to the source of income rather than the presence of a PE.

There are no CFC rules in Singapore.

https://taxsummaries.pwc.com/singapore/corporate/corporate-residence

 

[JustAnotherNomad]

In Singapore, the tax residence of a corporation is determined by the place where the central management and control of its business is exercised. This is taken generally to mean the place where the directors meet to exercise de facto control. The IRAS has also set out further guidance.

What does this mean? Can you have an "offshore" company like in HK in SG by declaring that management and control is outside of SG? And then not pay tax in SG?