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Is Thailand an "Offshore Jurisdiction"?

Transcript of the above video:

In this video, we're going to be talking about “offshore jurisdictions” and we're gonna be talking about Thailand in the context of so-called offshore jurisdictions. The first question that to consider is “Is Thailand an offshore jurisdiction?” unless first of all parse out the notion of what is an offshore jurisdiction. We're not simply talking about a jurisdiction that's an island or something somewhere for example, the so called square mile. The City of London is often considered to be an offshore jurisdiction in certain ways because it provides certain haven tax benefits if you will and it provides certain benefits for those wishing to use certain jurisdictions as you know the jurisdiction in which a company is formed something like this or banking is done etc as a practical matter.

Yes, there are certain benefits that can accrue to a company here in Thailand under things like the BOI, the Board of Investment certification structure or maybe perhaps even like a MIDI certification. I could see where if one was  running a regional operation in Southeast Asia and one wanted an American, wanted to own their operation outright unlike most the jurisdictions including Thailand which have some protective measures in place to preclude foreigners from actively just coming in and doing business from the get-go. It may be beneficial under enmity to use Thailand as sort of a kind of quasi offshore jurisdiction in that the company could be formed here doing business regionally or something. But as a practical matter no.

Thailand's not really much as far as an “offshore jurisdiction.” Most notably it does have a progressive tax system. Usually you know, there's a corporate income tax here that currently is at the time of this filming is 20 percent. Most offshore jurisdictions are called that because within the jurisdiction there is virtually zero tax or some novel tax rate especially produced in jurisdictions where the company is formed to do business offshore. Hong Kong's are really good where you have a company that's up in Hong Kong for the specific purpose of doing business outside of Hong Kong and the tax implications of that kind of structure are relatively minimal. Thailand doesn't necessarily have that although there are certain exemptions from certain kinds of taxation with respect to things like VAT if corporate activity is occurring outside of the country.

But as the notion of Thailand being like a tax haven or an offshore jurisdiction, I don't think it's particularly correct. The other thing is the Thai legal system in a lot of ways can be very formalistic and this is also true for the banking system here. Setting up bank accounts in Thailand can be a rather complicated exercise. There's a lot of documentation associated with it and then changing things on the bank account often requires physical presence at the bank rather than online. And again requires a lot of documentation associated with whatever one's wanting to change.

So I guess the thing to take away from this video is Thai companies are great for doing business in Thailand. They're great for you know, in some cases they can be very optimal for doing business regionally. But the notion that there's some kind of offshore haven from taxes or something like this just really isn't accurate and for those who are interested in that kind of a structure probably a good idea to look elsewhere at least jurisdictionally.