The most important thing to understand is that these services don't have your interest in mind and they are out of country, so they can offer you bad advice with no liability on their end (vs. say a CPA). Your problem is not setting up a "free zone company" or whatever that means but getting your current obligations to drop. You do that by visiting your local tax office and telling them you are off the country. It doesn't mean your liabilities disappear overnight.
Your biggest liability (tax-wise) is going to come from your revenue source. That's also where you should be careful. Next, is the country of your passport (because they got you by the **). Everybody else matter very little which is why you should steer away from Dubai, HK, off-shore, etc.. until you understand the nuances of your situation.
As far as I can tell these service are essentially the same as not reporting an income in a roundabout way - illegal but you will likely get away with it because how will the tax authorities of your country know.
Do these services provide you with legal representation towards your home country? My guess is probably not.
Yes, I am moving there, but I do not want to open a company just yet. I might do so in the future to ensure I pay enough taxes for meeting the requirements to become a citizen, but to grow my funds and because I get nothing in return for paying taxes there for now, I would like to keep my business in a different country.
Also, I am probably going to consult a tax lawyer there, but it still does not hurt to ask others about there experience I think.
Though all the digital nomads I met in Thailand kept their company / legal structure in their home country. Setting up shop in a new country - in particular in a slightly dodgy one - may not be worth the trouble to save some taxes on a modest income.
It's 2025 and your depending on your country they might be getting quite a bit of information (bank accounts, brokerage account, insurances transactions, Beneficial Ownership, etc...) Lookup CRS.
But do any of these setups help you with that? Ie. get a tax free company that is not under your name but under your control. And get an international bank account for that company plus an international debit card.
Plus you would need customers who are cool with paying you through an entity like that.
Not only that but the system is guarded through the banks. Even if you open a bank account for your company, you have to fill beneficial ownership rules for that bank account. So they might end up linking you to it that way.
Same, but residence probably always require a time period. I think it highly depends on your actual citizenship and what tax agreements they have with Thailand etc.
I am not a tax resident in my home country anymore, since I already migrated to a different country (UAE). I am also not trying to avoid becoming a tax resident of Thailand, but as the law seems to state currently foreign sourced income is not being taxed there necessarily.
Sounds like the "flag theory", I heard that a few times during my research (the quoted services also cite this).
I think this is not so easy though, depending on the individual circumstances. My home country for example might want proof of my tax resident status of the past years if I ever decide to move there again, which will be difficult, if I have not been a tax resident anywhere. Of course this is easy when you reach a certain amount of wealth, but unfortunatelly I am not there yet and might need some time (if ever) to get there.
I understand at least having a dual residency as a back up plan and that’s our plan with establishing residency in Costa Rica before retirement and keeping our by then paid off condo in the US.
It's optimal because you get left the hell alone. Governments do not know what they citizens do if they are neither living in the country nor having their money in the country. Governments do not know what their residents do, if they are neither citizens nor have their money in the country. Governments do not care what foreigners do with their money in their country if they are neither citizens nor residents.
A simple example would be someone who does not have US citizenship (or Eritrea) and is able to move their tax residency to a second country that has very low or no income tax (e.g. UAE).
There are other countries (e.g. Cyprus) that do not require you to stay for 180 days or more to gain residency, so I think this is the kind of setup he is talking about.
The last piece of the puzzle would be international bank accounts, which gets easier the more money you have (e.g. HSBC Expat, which requires 50k USD to set up).
The most important thing to understand is that these services don't have your interest in mind and they are out of country, so they can offer you bad advice with no liability on their end (vs. say a CPA). Your problem is not setting up a "free zone company" or whatever that means but getting your current obligations to drop. You do that by visiting your local tax office and telling them you are off the country. It doesn't mean your liabilities disappear overnight.
Your biggest liability (tax-wise) is going to come from your revenue source. That's also where you should be careful. Next, is the country of your passport (because they got you by the **). Everybody else matter very little which is why you should steer away from Dubai, HK, off-shore, etc.. until you understand the nuances of your situation.
Tax avoidance rather than evasion is what you’re after.
Avoid the need to pay in the first place instead of taking evasive action for payments demanded ;-)
Thank you for the correction, you are right, I am actually looking to avoid them ;-)
As far as I can tell these service are essentially the same as not reporting an income in a roundabout way - illegal but you will likely get away with it because how will the tax authorities of your country know.
Do these services provide you with legal representation towards your home country? My guess is probably not.
That would be problematic, but isn't that still allowed under Thai tax law (see my answer here: https://news.ycombinator.com/item?id=43370402#43370656)?
These services do not provide legal representation as far as I know.
But are you moving your residency to Thailand? If so get a Thai accountant and a Thai company in your name.
Most countries except the US will not tax you if you move to another country.
Yes, I am moving there, but I do not want to open a company just yet. I might do so in the future to ensure I pay enough taxes for meeting the requirements to become a citizen, but to grow my funds and because I get nothing in return for paying taxes there for now, I would like to keep my business in a different country.
Also, I am probably going to consult a tax lawyer there, but it still does not hurt to ask others about there experience I think.
Though all the digital nomads I met in Thailand kept their company / legal structure in their home country. Setting up shop in a new country - in particular in a slightly dodgy one - may not be worth the trouble to save some taxes on a modest income.
It's 2025 and your depending on your country they might be getting quite a bit of information (bank accounts, brokerage account, insurances transactions, Beneficial Ownership, etc...) Lookup CRS.
But do any of these setups help you with that? Ie. get a tax free company that is not under your name but under your control. And get an international bank account for that company plus an international debit card.
Plus you would need customers who are cool with paying you through an entity like that.
Not only that but the system is guarded through the banks. Even if you open a bank account for your company, you have to fill beneficial ownership rules for that bank account. So they might end up linking you to it that way.
No those services won’t be legal. If you stay in Thailand for that period you can pay tax there and then use FEIE to not pay double to the US
Ok, this may be true for US citizens who are taxed based on their citizenship, but what about other nationalities (I am not a US citizen)?
The current laws in Thailand state that foreign sourced income is only taxed if it is remitted to Thailand (source: https://mahanakornpartners.com/overview-of-personal-income-t...).
So this should be an option, don't you think?
Same, but residence probably always require a time period. I think it highly depends on your actual citizenship and what tax agreements they have with Thailand etc.
I am not a tax resident in my home country anymore, since I already migrated to a different country (UAE). I am also not trying to avoid becoming a tax resident of Thailand, but as the law seems to state currently foreign sourced income is not being taxed there necessarily.
You should pay a real certified accountant from your country to answer your questions.
Your life should be split like this:
One country for citizenship, one country for residence, one country for your money.
This arrangement earns you a lifetime of peace of mind.
Sounds like the "flag theory", I heard that a few times during my research (the quoted services also cite this).
I think this is not so easy though, depending on the individual circumstances. My home country for example might want proof of my tax resident status of the past years if I ever decide to move there again, which will be difficult, if I have not been a tax resident anywhere. Of course this is easy when you reach a certain amount of wealth, but unfortunatelly I am not there yet and might need some time (if ever) to get there.
Why is that optimal?
I understand at least having a dual residency as a back up plan and that’s our plan with establishing residency in Costa Rica before retirement and keeping our by then paid off condo in the US.
It's optimal because you get left the hell alone. Governments do not know what they citizens do if they are neither living in the country nor having their money in the country. Governments do not know what their residents do, if they are neither citizens nor have their money in the country. Governments do not care what foreigners do with their money in their country if they are neither citizens nor residents.
Can you explain a real world scenario based on ease of applying for residence, tax situation, etc?
I haven’t researched anything aside from the US && (Costa Rica || Panama) scenario. There are really no tax advantages or disadvantages that way.
A simple example would be someone who does not have US citizenship (or Eritrea) and is able to move their tax residency to a second country that has very low or no income tax (e.g. UAE).
There are other countries (e.g. Cyprus) that do not require you to stay for 180 days or more to gain residency, so I think this is the kind of setup he is talking about.
The last piece of the puzzle would be international bank accounts, which gets easier the more money you have (e.g. HSBC Expat, which requires 50k USD to set up).