I'm about to get married to my long-time partner, who is an American citizen. As we plan to run a business together in the US, our lawyer suggests we sign a paper to make it more convenient for me by applying for a long-stay visa for our business establishment. I have two concerns:
1. How do I protect my family trust from any financial claims in the future as well as my personal assets, either cash or land?
2. The lawyer suggested we invest using the name of my partner solely, as a Thai citizen cannot conduct business alone in the US, and I decided to follow this advice. But I'm concerned about this strategy. I know anything can happen in business, so I want to ensure I protect my investment and family assets. This means ensuring that if the business goes south, the assets will be fairly arranged for both of us without a legal loophole giving either an advantage.
Thank you for your advice. Regards,
ANSWERED BY ... Teera Phutrakul, CFP, Chairman, TFPA You are looking at three separate issues here: US citizenship, family trusts and setting up a business in the US. Here's the lowdown on what is at stake.
I hope you realise getting married to an American does not mean US citizenship is a sure thing. First, you have to apply for a green card (a permanent resident card), which can take anywhere from three to 12 months. For newlyweds, the green card is conditional on you staying married for at least two years. If you divorce or separate, then all bets are off.
Once the application is approved, your official primary residence has to be in the US and you will begin paying US federal and state taxes. Here comes the best part: your global income, i.e. everything that you earn in Thailand too, shall be subject to US taxes, though this is not always easy to enforce. When you die, there's also estate tax.
After receiving a green card and paying taxes as a resident for at least five years, then you are eligible to apply for citizenship.
As for your family trust, I am unsure whether you are referring to yourself as the settlor or the beneficiary of the trust. Trusts are flexible, varied and complex. Each type has advantages and disadvantages, which you should discuss thoroughly with your financial planner.
Last, you do not need to be a US resident to own a business, and you do not need American partners. Owning is different from working. If you work and collect a salary from the business, you need residency or work visa status. If you just own a business and collect income from the profits, you do not need to be a resident. Any foreign investor can own a business, but you have to pay taxes on income earned in the US. What kind of entity you hold depends on the state, the type of business and your tax situation. The final decision is largely driven by tax considerations and personal liability.
The Thai Financial Planners Association is the Certified Financial Planner (CFP) trademark licensing authority in Thailand. It is a self-regulated, non-profit group of financial advisers and experts from various organisations set up to give advice to investors. Questions can be submitted through email@example.com or the TFPA webboard, www.tfpa.or.th
About the author
Writer: Thai Financial Planners Association