UAE and residency in Thailand (Futures Trading?)

[Nok]

Hi guys,

I was thinking about the best structure to setup for me as a German national. Our government pretty much screwed retail trading by enacting a new law where one can only deduct trading losses up to a certain amount. Think making 400k with 300k losses where the losses can only be deducted up to 10k p.a.. So most people started opening up EU Ltd companies to trade.

I was thinking about setting up a company in a UAE free trade zone while buying a Thailand elite visa for 5-20 years and distribute my profits the next year to me in Thailand. Is this a viable structure if I trade from Thailand (no Cfc rule)? Or would I have to pay myself a salary so that the Thai tax authorities can get their pound of flesh?

Thank you for your time

 

[fshore]

Or would I have to pay myself a salary so that the Thai tax authorities can get their pound of flesh?

You can't work with the elite visa so couldn't pay yourself a salary. Or if you do receive a offshore salary then you couldn't report it in Thailand as your not allowed to work.
Why do you need a UAE company, why not just Thailand elite visa + trading personally, or a cheaper company like Gibraltar, or whatever you can get a trading/bank account for.

 

[troubled soul]

UAE setup is expensive .
You can check some country where foreign source income is tax free for expat. (Hong Kong ,Malaysia ,Panama , Singapore )
If you only have trading income as only source . some country has zero capital gain tax. You also think about that.

It is better to move to any of these country which suits you rather than "registration company circus ".

 

[khinkali]

@azb1 in many places, trading income isn't capital gain and isn't considered foreign income. This can depend on things like trade frequency and whether you have some other occupation.

An offshore entity of some kind might change that, depending on CFC and PE rules. Assuming a non-CFC jurisdiction with no taxes on offshore passive income, the question is whether the income is passive or whether you're creating a local PE (and perhaps, whether the local authorities care at this level).

 

[Nok]

You can't work with the elite visa so couldn't pay yourself a salary. Or if you do receive a offshore salary then you couldn't report it in Thailand as your not allowed to work.
Why do you need a UAE company, why not just Thailand elite visa + trading personally, or a cheaper company like Gibraltar, or whatever you can get a trading/bank account for.

I would be paid in dividends. No income tax no dividend tax. Is it necessary for a UAE company to get paid a salary?

 

[Nok]

@azb1 in many places, trading income isn't capital gain and isn't considered foreign income. This can depend on things like trade frequency and whether you have some other occupation.

An offshore entity of some kind might change that, depending on CFC and PE rules. Assuming a non-CFC jurisdiction with no taxes on offshore passive income, the question is whether the income is passive or whether you're creating a local PE (and perhaps, whether the local authorities care at this level).

Yeah that we be my case with over 1000 trades per year min. Why only on passive income? Mine would be very much active. I would be trading the UAE account from thailand and receive the dividends the following year

 

[fshore]

Yeah that we be my case with over 1000 trades per year min. Why only on passive income? Mine would be very much active. I would be trading the UAE account from thailand and receive the dividends the following year

You can check with a local Thailand tax advisor, but generally Thailand doesn't care about foreign income that you might have, and they don't consider you and your laptop local income unless you work for or with a Thai company.
I don't see why you need a company at all.

 

[nomad999]

agree you don't need a company for trading from thailand, you can trade on a personal account as long as you don't remit any profit inside the kingdom during the taxable year it is not taxable.
and on top of that thailand is a reputable jurisdiction for many banks/brokers believe it or not

 

[khinkali]

Why only on passive income?

You should look at whether your activity in TH creates a Permanent Establishment of the UAE company. If you're the one doing the work (managing the company, directing or making the trades) then this activity is taking place in Thailand and likely to be subject to some kind of taxation there.

If the trading is done by employees in UAE and you fly to UAE to give them instructions then you have real substance in UAE and don't work from Thailand, so the situation is different. Also if you were making a handful of trades per year then in some places it could be deemed as passive investment profit, rather than work done in the country.

Of course the practice and the letter of the law can differ and I agree to @fshore and @nomad999 to some extent. I remember a Chiang Mai investigation into a bunch of people doing web design and similar for offshore clients, which the authorities said was OK. I'm pretty sure the situation would have been different if they were making millions. I don't know if low six figures USD dividends put you into a level where they care. I would look for local advice to guide you on that.

I left Thailand because I make many small crypto trades per day and the advice was contradictory.

 

[Fred]

Hi @Nok,

I'm German and come from the E-Commerce as well.

Living since 5 years in Dubai - I'm pretty sure we can help you and answer all your question.

We even have currently Germany clients in Dubai with the Thai Elite Visa so they can mention everything to you from the practical side - of course they know why to setup the financial base in the UAE.

Send me PM. We can schedule a personal call.

 

[nomad999]

I left Thailand because I make many small crypto trades per day and the advice was contradictory.

unfortunately for crypto trading thailand have special law and crypto gains are tax at 15% and there is no border for crypto so no escape from it. so for someone heavily involved with crypto thailand is not that interesting anymore.

now in practice you can get away with anything as long as you don't look like you are working, like going to work everyday or working in a office or something like that. being on your computer all day isn't enough to be qualified as working no matter what.
eventually if you live the millionaire lifestyle and get notice you'll possibly get into some trouble with the local police ... I would say in that case you would need a solid setup to justify you wealth to the authority.

most of anything that happened outside the country they don't care and can't do anything about it anyways.
now thailand have signed CRS which is planned to take place in 2022/23 if I am not mistaken, from there things might change we will see ...

just in case, Malaysia on the other hand have no capital gains tax and no cfc rules, bit harder to get in though.

 

[khinkali]

if you live the millionaire lifestyle and get notice you'll possibly get into some trouble with the local police

I agree completely. Just because it works for some backpackers doing a bit of paid blog posting, doesn't mean that you'll be treated the same way with bigger remittances and lifestyle. If the amounts are small enough, you can get under the radar anywhere.

 

[Fred]

I agree completely. Just because it works for some backpackers doing a bit of paid blog posting, doesn't mean that you'll be treated the same way with bigger remittances and lifestyle. If the amounts are small enough, you can get under the radar anywhere.

That's it.

@Nok as you are German take a look at this:

Establish Dubai Company as your financial base and don't transfer to much of your wealth to Thailand because corruption is real and they try everything to get your money - see the Guy in the video - better no show off.

Regarding the taxes it's a huge gap between written law and law enforcement most probably majority get away due to lack of enforcement of the authorities but as said the corruption will be your bigger problem.