Working as freelance in PH.

[Avalon]

I've been working online here full-time since 1997.  Currently I work from home and have unofficial staff working from their homes on a cash basis.

My current structure is I have a company incorporated in the British Virgin Islands and pay US$250 per year in lieu of tax.

My office address and company bank account is in HK (HSBC) and my clients - mainly UK, Spain, Australia - wire money to my bank account there from PDF invoices I send them.  As the service are not delivered in HK this is not taxable there.

One of my local bank accounts is HSBC Makati and I routinely transfer funds there that appear instantly during banking hours and can be pulled out of an ATM for local rates - P10 or P20 per P10K or P20K (BPI).

I'm a British Citizen who has not lived in the UK since 1967 so no tax payable there.

I tell the BIR quite honestly that my income is Director's Fees drawn from a HK based company I serve and as this is foreign-sourced income to a foreign national residing in the Philippines it is not taxable.  I photocopied 12 months of bank statements showing these drawdowns and BDO gave me a bank loan to buy a new Hilux.

But here's my golden rule:

Never (ever) operate a business here that competes with a local company or person - you'll find every dirty trick there is to wipe you out.

My business supplies services overseas - I don't compete with anyone here - I just bring the money in and spend it - and everyone is happy.

Hope that helps

 

[Possum]

1 hour ago, Avalon said:

Never (ever) operate a business here that competes with a local company or person - you'll find every dirty trick there is to wipe you out.

I have found this to be true in most 3rd world countries controlled by oligarchs. They think  every dollar you make is one dollar you are stealing from them make no difference if they are wealthy already it's their kingdom. In another country I brought in a minor partner with political connections . He had no money invested but kept things quiet as long as he got a monthly share.

In your case I don't see any issue

[hk blues]

12 hours ago, Avalon said:

I've been working online here full-time since 1997.  Currently I work from home and have unofficial staff working from their homes on a cash basis.

My current structure is I have a company incorporated in the British Virgin Islands and pay US$250 per year in lieu of tax.

My office address and company bank account is in HK (HSBC) and my clients - mainly UK, Spain, Australia - wire money to my bank account there from PDF invoices I send them.  As the service are not delivered in HK this is not taxable there.

One of my local bank accounts is HSBC Makati and I routinely transfer funds there that appear instantly during banking hours and can be pulled out of an ATM for local rates - P10 or P20 per P10K or P20K (BPI).

I'm a British Citizen who has not lived in the UK since 1967 so no tax payable there.

I tell the BIR quite honestly that my income is Director's Fees drawn from a HK based company I serve and as this is foreign-sourced income to a foreign national residing in the Philippines it is not taxable.  I photocopied 12 months of bank statements showing these drawdowns and BDO gave me a bank loan to buy a new Hilux.

But here's my golden rule:

Never (ever) operate a business here that competes with a local company or person - you'll find every dirty trick there is to wipe you out.

My business supplies services overseas - I don't compete with anyone here - I just bring the money in and spend it - and everyone is happy.

Hope that helps

 

You mention "unofficial staff" - are they located here in the Philippines? If so, how to the BIR view that arrangement. If elsewhere, what are the tax implications where they reside?

Otherwise, seems you've got your ducks in a row.

[Cola Cubes]

On 12/23/2022 at 8:54 PM, Avalon said:

My current structure is I have a company incorporated in the British Virgin Islands and pay US$250 per year in lieu of tax.

My office address and company bank account is in HK (HSBC) and my clients - mainly UK, Spain, Australia - wire money to my bank account there from PDF invoices I send them.  As the service are not delivered in HK this is not taxable there.

Avalon - I am similar to you but achieving it in a different way.  It has worked until now (12 years).  My Caribbean company is also with HSBC HK.  Can I ask a few questions?

• Do you need to maintain company accounts in HK for your BVI company?
• Must these be audited?
• Do you use a virtual office address in HK?
• Did you need to have a telephone number in HK?

Sorry for the questions.  Glad it works for you.  Especially with HSBC  :-)

 

 

 

 

 

[Avalon]

On 12/24/2022 at 9:37 AM, hk blues said:

You mention "unofficial staff" - are they located here in the Philippines? If so, how to the BIR view that arrangement. If elsewhere, what are the tax implications where they reside?

Otherwise, seems you've got your ducks in a row.

They work from their homes and are paid cash so they're off the radar.  We did form a local corp at one stage but it was a nightmare for red tape and audited accounts etc.  We closed the office for lockdowns and shut down the company - we may open another if we expand but it really is a pain here.

[Avalon]

5 hours ago, Cola Cubes said:

Avalon - I am similar to you but achieving it in a different way.  It has worked until now (12 years).  My Caribbean company is also with HSBC HK.  Can I ask a few questions?

• Do you need to maintain company accounts in HK for your BVI company?
• Must these be audited?
• Do you use a virtual office address in HK?
• Did you need to have a telephone number in HK?

Sorry for the questions.  Glad it works for you.  Especially with HSBC  :-)

 

 

 

 

 

I don't maintain accounts as I'm not required to file returns anywhere and am the sole shareholder in the company - there is no requirement for audited accounts.

I have an office address in HK and a phone line but they're never used.  HSBC did require a local address to send mail to when I opened the account there, not sure if they still do.  Our local agent in HK, who has done this for me on other corps since 1989, handles any liason needed with HSBC for a nominal fee, DHLs me any docs needed to sign, ATM cards and PIN device etc.

Hope that helps.

 

[Boinky69]

On 12/23/2022 at 10:54 PM, Avalon said:

I've been working online here full-time since 1997.  Currently I work from home and have unofficial staff working from their homes on a cash basis.

My current structure is I have a company incorporated in the British Virgin Islands and pay US$250 per year in lieu of tax.

My office address and company bank account is in HK (HSBC) and my clients - mainly UK, Spain, Australia - wire money to my bank account there from PDF invoices I send them.  As the service are not delivered in HK this is not taxable there.

One of my local bank accounts is HSBC Makati and I routinely transfer funds there that appear instantly during banking hours and can be pulled out of an ATM for local rates - P10 or P20 per P10K or P20K (BPI).

I'm a British Citizen who has not lived in the UK since 1967 so no tax payable there.

I tell the BIR quite honestly that my income is Director's Fees drawn from a HK based company I serve and as this is foreign-sourced income to a foreign national residing in the Philippines it is not taxable.  I photocopied 12 months of bank statements showing these drawdowns and BDO gave me a bank loan to buy a new Hilux.

But here's my golden rule:

Never (ever) operate a business here that competes with a local company or person - you'll find every dirty trick there is to wipe you out.

My business supplies services overseas - I don't compete with anyone here - I just bring the money in and spend it - and everyone is happy.

Hope that helps

 

Avalon - Sounds like you have it all covered!!

Is there some tax advantage having the primary company listed in the BVI rather than direct via HK?

What are the annual cost in HK to run the virtual office?

How does one go about finding an agent in HK and BVI for the preliminary set up? Can you advise an estimate cost to establish all then annual costs to maintain it all?

Edited March 24 by Boinky69

[Gutenberg]

26 minutes ago, Boinky69 said:

Avalon - Sounds like you have it all covered!!

Is there some tax advantage having the primary company listed in the BVI rather than direct via HK?

What are the annual cost in HK to run the virtual office?

How does one go about finding an agent in HK and BVI for the preliminary set up? Can you advise an estimate cost to establish all then annual costs to maintain it all?

Just to add something as the poster you quoted has his structure going since years - HK has changed a lot in recent years and getting a bank account for BVI company in HK will be very, very difficult. Even getting a HK company with bank account 'the old ways' will be more difficult, unless you have a big amount to deposit. There are some EMIs available for HK companies though, like Statrys and Airwallex.

If you are looking for a really easy/cheap solution: Delaware LLC + Wise.