Thailand or Singapore for Business?

[jxxxl]

I'm starting and export business and I need to create a company structure somewhere in Asia. I love living in Thailand but from a pure business standpoint, is there any reason to set up the business here rather than in a country like Singapore?

 

 

 

I am a US citizen and one of the reasons I want to set up the business is to shelter my profits from the IRS. Therefore, a country having a "tax haven" status is important. Does anyone know if Thailand has that status - I believe Singapore does?

 

 

 

Thanks for any advice.

 

 

 

JX

[Guest]

Jxxxl--

 

 

 

Having been in asia for a number of years working for a US-based company I can say that Singapore would be my #1 choice.. Why? Simply it offers a "safer" base from which to operate.

 

 

 

I define "safe" in many ways.. Safe banking system, orderly legal/contract system, orderly tort laws, logical and uniform employment laws, health and safety laws, import/export customs rules....etc,etc... This is not to say that Singapore has it all and it perfect, but in comparision to other cities in the South Asia region I would say that Singapore is #1.

 

 

 

Singapore has an excellent business structure and is widely know to be (mostly) free from corruption on the federal/state level and at the local level.. This cannot be said for many other regional places.. Plus, it offers excellent connections (for hard goods) to other asian markets using both air and sea modes.

 

 

 

As for tax status, you should consult a qualified attorney in each prospective country for an opinion.

 

 

 

This is not to say that I dislike Thailand, but I would not set up a base in Thailand over places like Singapore.. Tokyo or Seoul would be other excellent options in the North Asia market as well..

 

 

 

--UPSer

 

 

 

 

[ThaiHome]

Trying not to sound hostile, but would care to further define "tax haven"? I don't think the IRS recognizes that such places exist. For a US citizen, sheltering income carries a certain risk of being accused of illegal activities

 

 

 

Other then that, the points UPSer raise are very valid for picking Singapore. I would not want to take my chances in a Thai court on a civil matter.

 

TH

[jxxxl]

TH,

 

 

 

I am not an expert on this issue, but certain countries have a tax haven status such that they are not required to supply information to the US government if requested to do so.

 

 

 

Now, on the matter of paying taxes, as a US citizen, I am required to report and pay taxes on almost ALL income irrespective of where or how it's made.

 

 

 

nuff said.

 

 

 

JX

[Crash999]

"is there any reason to set up the business here rather than in a country like Singapore? "

 

 

 

A big reason - cost. Creating a business entity here in Thailand can be done by a good lawyer with an iron-clad structure for around $5k-$10k depending on complexity with a couple more grand in yearly fees to keep it going. You can register a company for far far cheaper but you get what you pay for.

 

 

 

As a US citizen you are entitled to set up a wholly-owned foreign company, unlike foreigners from any other nation due to the bilateral Treaty of Amity which has lasted for decades. See a book called 'Start Up and Stay Up in Thailand' for detailed information about what you should know.

 

 

 

Not sure where you're going with that tax idea, but keep in mind that you would be entitled to pay local Thai corporate taxes on your reported income. All US citizens are supposed to report and pay US income tax if one earns above (this year it's) US$80k per year above and beyond what one pays locally.

 

 

 

Don't be scared by those who give you horror stories about the Thai legal system and so on with the idea that a business cannot function here. Keep in mind that many of us are expatriates here and manage large subsidiaries of international corporations. If the business environment was so bad here, we'd not be able to function either.

[jxxxl]

UPSer,

 

 

 

Thanks for the great information, you sound like you know what you are talking about.

 

 

 

I pretty much figured I would get this kind of feedback. Given my business would not require a physical location in Thailand, I can't think of any reason to set up the structure here. I've also heard the bureaucracy involved with setting up a business in Thailand is a nightmare.

 

 

 

JX

[Crash999]

"Singapore has an excellent business structure and is widely know to be (mostly) free from corruption on the federal/state level and at the local level.. This cannot be said for many other regional places.. Plus, it offers excellent connections (for hard goods) to other asian markets using both air and sea modes. "

 

 

 

The export system is relatively free from corruption, though it's importation customs that drives people nuts and is probably up there as the most corrupt organization in the country.

 

 

 

But don't knock Bangkok's air and sea links. Sure, many vessels transit through Singapore but I'm looking at some freight rates right now that are only 5% higher to the US than shipping FOB Singapore.

 

 

 

Besides, if this guy is going to set up an export business, there simply isn't much to export from Singapore itself these days. Much of the sourcing business conducted there is due to the location of the headquarters of enormous multinational garment producers, but seldom is it FOB Singapore.

 

 

 

Hmm... too bad there isn't an import/export board for Thailand or SE Asia- would be fun to bounce ideas back and forth off each other.

[jxxxl]

Crash,

 

 

 

Thanks for the alternative viewpoint - great info. Do you know if the Thai system makes it easier to start certain types of businesses? I know Thailand works hard to promote exports so I would imagine they may make it easier to start an export business rather than say, a gogo bar.

 

 

 

Also, any problem getting money out of Thailand?

 

 

 

Cheers,

 

 

 

JX

[buffalo_bill]

Jxxxl,

 

 

 

" creating a company structure somewhere .. " sounds like you do not need a physical residence like warehouse etc. I guess you plan to do some trading business and need the address writing the bills. I do not waste my time with philosphies on the moral background of your plans, here are the facts :

 

 

 

Thailand you can totally forget for this purpose due to 20 reasons, although there are ways. Depends what you do. You need strong nerves.

 

 

 

Singapore is well organised but for what I think you are heading for, most counter-productive. Please consider the movement of money to be the main risk on any tax avoiding structures. What you have to enter finally is money-laundering. Does not sound nice but that's what it is.

 

 

 

Your country of choice is Hongkong, procedure as follows: take some cash with you, see a large accountancy office and buy a non-residential company. Available ex stock. Maybe you ring them before.Shareholders are supplied by same office, not to worry. Capital 2 HKG - Dollar. Initial cost depends, about 1500 USD , anual fees same. Tax zero. I would install myself as director in case questions asked what you do there. There we are, have good business. Remember: shareholders unknown. Problem her and anywhere else : once you turn up at the bank and open an account you are in the books. Better find somebody else.

 

 

 

This needs to be noticed : HKG now Mainland China, the previous UK well organised system is shrinking. Cooperation with US tax people unlikely, but : almost all bigger countries have detectives in any tax heaven to do immediate checks once things start to smell. Do not underestimate this, most people do. I repeat it.

 

 

 

Recommendation : unless you have real big money to move around, forget the whole thing. There are plenty complications involved plus the alltime-risk. Sometimes more peaceful to pay some taxes and sleep better. Can also consider residential company in HKG , tax only 15 %.

 

 

 

There are no easy solutions to this anywhere.

 

 

 

Bbill

 

 

 

Disclaimer : Post does in no way reflect any personal experience. Is in the name of science only.

[buffalo_bill]

Crash,

 

 

 

I sign your point that against all rumours trading with Thailand offers no big worries whatsoever. Shipping via Singapore is no trouble at all, customs problems unknown to me. The problem is elsewhere : Thai companies if not Japanese/US or other subsidiaries, are commonly unrealistic, have no idea about market prices, do not know what service is and have no clue what's going on. Just had a party here trying to sell rubber-products ( RUBBER !!!!)to the automotive industry. A shattering experience. Prices above anything that one had ever heard of. Could continue.

 

 

 

Cheers

 

 

 

Bbill