Thailand Issues New Incentives to Attract Foreign Investors, Professionals, and Retirees

Foreign investors, professionals, and retirees will be able to enjoy a number of new incentives in Thailand, as the government seeks to attract high-earning overseas residents to help the country’s COVID-19 recovery.

Thailand’s cabinet passed a resolution on September 14, 2021, introducing immigration, tax, and land ownership incentives aimed at foreign investors and skilled professionals. The incentives are part of an effort to stimulate Thailand’s economy which has been badly impacted by the COVID-19 pandemic.

According to a government spokesperson, the government expects the incentives to attract over a million foreign investors and professionals within five years, contributing over 1 trillion baht (US$30 billion) to the economy.

In this article, we look at what incentives will be available, and who is eligible to apply for them.

What are the incentives?

The incentives come in three categories: immigration, tax, and real estate.

Immigration

Qualified applicants can receive a 10-year long-term resident visa to live in Thailand, including for their spouses and children. Qualified applicants will also be issued an automatic work permit. This is a new type of visa that did not previously exist in Thailand.

As opposed to other types of visas, those on long-term resident visas will not have to submit written notices to relevant authorities to stay longer than 90 days in the country. Potentially, they will not be subject to restrictions on hiring foreign workers, such as the requirement that employers hire four Thai workers for every foreign one, although this remains to be determined.

Tax

Qualified applicants will be able to enjoy the same income tax rates as Thai citizens, as well as tax exemptions for income earned abroad. Further, they can apply for a 17 percent fixed income tax rate in accordance with the Eastern Economic Corridor scheme.

Land and property

Qualified applicants will be able to enjoy relaxed restrictions on foreign ownership and rent of land and property.

The incentives will be overseen by Thailand’s Office of National Economic and Social Development Council. They will be in place for five fiscal years from 2022-2026, at which point authorities will evaluate their performance and decide whether to extend them.

Potential applicants should note that while the Thai government has confirmed incentives in these areas, details in some areas, such as land and property, have not yet been made clear.

Who qualifies for the incentives?

The incentives apply to four categories of foreigners: wealthy global citizens, wealthy pensioners, work from Thailand professionals, and highly skilled professionals.

Wealthy global citizens

People with at least US$80,000 in income over the last two years and at least US$1 million in assets can qualify for the incentives. Further, they must have medical insurance covering at least US$100,000 and invest at least US$500,000 in Thai government bonds or real estate.

Wealthy pensioners

Retired pensioners with a stable pension of at least US$40,000 per year and aged 50 or older can apply. They too must have medical insurance covering at least US$100,000 and invest at least US$250,000 in Thai government bonds or real estate.

Work from Thailand professionals

Foreign professionals who work remotely from Thailand (often referred to as digital nomads), with at least US$80,000 in income over the last two years and at least five years of work experience will be eligible.

Highly skilled professionals

This category refers to professionals with at least US$80,000 in income over the last two years or US$40,000 per year who work in targeted industries, including building infrastructure, logistical systems, and digital systems, or experts and researchers who work with state agencies or as university lecturers.

To be noted, not all of the details are clear for the new incentives for foreigners, even though they were passed by the cabinet. More details about issues in need of clarification, such as what form will land incentives take and how applicants can prove their net worth, stand to surface in the months ahead.

(Source from: ASEAN Briefing)

Insights of ASEAN E-commerce (2021)

The spread of Covid-19 has compelled ASEAN leaders to impose social distancing measures and lock down cities from time‑to‑time, since the beginning of the outbreak in early 2020. It has put strain on traditional retail given the widespread closures of physical stores and diminishing consumer demand. While the pandemic has led to a period of extreme upheaval for traditional street-side stores, it has driven a dramatic uptake of digital adoption across ASEAN countries, accelerating the shift towards online retail channels that was already underway.

Store‑based retail sales plunged and remained weak over the last year in major ASEAN consumer markets. As the pandemic progressed, however, it has sped up digital transition and accelerated an expansion of e‑commerce. Consumers are provided with access to a significant variety of products from the convenience and safety of their homes, while retailers scramble to bolster their online channels to minimize impacts from social distancing measures or contact restrictions.

First Time Using E-commence

There was a dramatic uptake of digital technologies across key economies in Southeast Asia, with 40 million people came online for the first time in 2020 alone, bringing the total number of internet users to 400 million, up from 250 million in 2015. More than three out of five people in these economies are now online and since the pandemic began they have been spending more time on the internet. Time spent online per day rose by an average of one hour across ASEAN countries, with the highest spike in the Philippines, where consumers spent more than five hours a day online.

The use of e‑commerce has also surged since the start of the pandemic, with the strongest uptake in Indonesia, followed by the Philippines and Malaysia. As consumers increasingly embrace the benefits of safety and convenience over e‑commerce, the shift to online shopping is expected to stay post‑pandemic. Interestingly, many ASEAN countries have seen stronger e‑commerce adoption among internet users than the world average as well as many mature markets. Indonesia was found to have the highest e‑commerce adoption in the world last year, with 87% of its internet users having purchased online via an electronic device, followed by the U.K. (86%), Thailand (84%) and Malaysia (83%).[4] Adoption in other ASEAN countries, such as the Philippines, Singapore and Vietnam, has also outrun mainland China, which is considered one of the world’s largest e‑commerce market.

Being late adopters to the internet, most consumers in the region have never owned a desktop computer. Instead, with smartphones becoming increasingly more affordable and accessible, mobile devices have become the main means to stay connected and shop online. Indonesia emerged as the world’s most enthusiastic adopter of mobile e‑commerce last year, with about 79% of Indonesia’s internet users purchasing something online via a mobile device, followed by Thailand (74%) and the Philippines (70%). Meanwhile, mainland China ranked the sixth in mobile e‑commerce usage, with 64% of internet users having shopped online using a mobile phone.

E‑commerce was previously factored by many retailers in ASEAN as a good‑to‑have option rather than being an essential business strategy. As Covid-19 reshapes consumers’ behaviours and accelerates transition to online shopping in ASEAN, e‑commerce has become an effective channel for companies, including Hong Kong SMEs and exporters, to reach local consumers or grow their existing footprint in ASEAN markets.

Lazada and Shopee are the two key online platforms with operations in major ASEAN countries, including Indonesia, Vietnam, Thailand, Singapore, Malaysia, and the Philippines. While these two leading e‑commerce players took a regional approach, there are also many local B2C platforms in individual ASEAN countries. For example, Tokopedia and Bukalapak are popular in Indonesia while Sendo is well‑liked by Vietnamese consumers.

Consumer electronics and apparel are the key product categories purchased online by Southeast Asian consumers, accounting for over half of the region’s e‑commerce gross merchandise value (GMV) in 2020. Meanwhile, the “stay‑at‑home economy” has disrupted food purchasing and consumption habits, forcing many consumers to cook or eat at home, and experiment with ordering food and groceries online. The e‑commerce GMV share of food and groceries jumped from 4% in 2015 to 11% last year, with more than two out of five ASEAN consumers are new to online groceries purchase.

<Source: HKTDC - Melissa Ho>

Open Bank Account under COVID-19 pandemic

Current Status in HK

With the low and simple tax system, having a HK company with a Hong Kong bank account can bring numerous benefits for doing business locally or globally.

To get a bank account in HK, one of the KYC ("Know Your Clients") requirements is to have a face-to-face interview the ultimate owner(s). However, non-HK residents are not allowed to enter unless a working visa is granted.

Most foreign clients are now shifting to use an E-Account offered by local FinTech companies ,like PayPal but better for business. Another option is to apply a bank account in home country or offshore jurisdictions.

What is E-Accounts?

E-Accounts offers online services in sending and receiving moneys among merchants which are provided by the Licensed Money Service Operators in HK. The E-Accounts does not require minimum deposit nor charge any monthly fees. The only fees is the admin fee for sending moneys and this charge is normally lower than the standard banks charge.

One of the E-Accounts providers is Airwallex, whose investors are Tencent, Master Card, DST Global and ANZ Bank. Click here to Airwallex's website.

What is Offshore Bank account?

As mentioned above, HK banks require face-to-face interview, but you must have heard that some banks accept paper-application (also known as Remote Application). How can this be?

In fact, most of the banks accepting remote application are located at the so-called offshore jurisdictions like Belize, Nevis, BVI, Mauritius or Switzerland. These banks provide international banking facilities including multi-currency and online banking. And the bank charges are comparatively higher than HK banks do.

What should I do?

What we are seeing is that most choose to get an E-Account or an Offshore Bank account to do business with a HK company as the tax benefits can cover these costs. Another reason is that the transaction records from these accounts would be a credit for applying for a Hong Kong bank account in future.

Need Assistance?

Please feel free to send email at info@rbcs.com.hk