So what is this new 3-million-baht Investment Visa?

It is an extension of stay granted one year at a time and is renewable annually. As this is an extension of stay based on investment, it is designed strictly for the holder to reside in Thailand. It does not grant the holder the right to cork or conduct commercial activities in Thailand.

What law provides for this visa?

Two statutes/ orders provide for this visa. Namely:

a. the Immigration Bureau Order No. 237/2568; and

b. the Immigration Bureau Order No. 238/2568.

The latter order provides for the 12-month extension and lays out the eligibility criteria, the required 3-million-baht investment threshold and the document requirements.

When did this visa start?

The immigration orders came into force on 1 October 2025.

Are there any ambiguities?

To date, the freehold condominium purchase route is well understood and in force. However, as of the time of writing, the authorities are still clarifying the requirements for leasehold and rental pathways for the visa.

Do you need an agent to apply for this visa?

No. You do not need an agent to apply for this visa. There are many companies online who tout their services as “agents” for the visa. However, anyone is permitted to apply for this on their own. The possible benefit of engaging such an “agent” would be that they would be more familiar with the process and perhaps some documents may be better understood in Thai. Hence if you do not understand Thai, you may benefit from such a service.

The market is currently flooded with “agents” charging high “membership” or “service” fees. These fees may come with some additional perks like airport pickups. However, there is no requirement to use an agency to apply for this visa. The process primarily requires you to obtain a Certification Letter verifying your investment, which is administered through Thailand Longstay Service Co., Ltd. under the Ministry of Tourism and Sports. Once you have this Certification Letter, together with the relevant bank and property documents (like the Foreign Exchange Transaction (FET) Form showing funds came from overseas, and the property title deed in your name), you can process the paperwork independently.

Some Thai property agencies or developers may assist their buyers in applying for the 3-million-baht Investment Visa. If you are buying or bought a property through a Thai property agency or Thai developer, you may check with your sales agent if they do provide such a service.

A word of caution when you see “agents” promising guaranteed immediate results or trying to sell you fast track packages using loopholes. These are not advised and to date, I cannot find any “agent” who can fast track the application process. The fastest way to apply would be to have all documents ready and respond promptly when the authorities reach out to you for clarification. There are also “agents” who can claim to be able to obtain an FET Form without the need for funds to come from overseas. This is not legal. Moreover, you would not want to jeopardise your application by submitting something an untruth.

The application procedure

Please note that there may be some changes in the future. This is accurate as of the day of posting. The application is

Step 1: Property purchase and Thai ownership compliance

Finalise the purchase of your freehold condominium worth at least THB 3,000,000. The funds must be transferred from overseas. You will also need to verify that your ownership of the property is compliant (i.e. within the foreign quota limits).

Step 2: Obtain Certification Letter from Ministry of Tourism and Sports

This is done by submitting the property documents, bank forms and a copy of your passport to Thailand Longstay Service Co., Ltd (TLS). There is a one-time membership fee of THB 4,000 and an annual service fee of THB 27,000. They will obtain the Certification Letter from the Ministry of Tourism and Sports on your behalf.

Step 3: Obtain the 90-day visa

With the Certification Letter, you can obtain an initial 90-day Non-Immigrant ‘B’ (Investment) permit from the designated immigration office.

Step 4: Obtain the 12-month extension

Before the expiry of the 90-day permit, you will need to return to immigration to file for the full 12-month extension (this will be facilitated by TLS). This extension is renewable as long as the property is maintained under your name.

Documents required

Personal Documents:

Completed TLS operator application and visa support forms.

Full passport scan (every single page, including blanks). The passport must have at least 6 months of validity remaining.

Passport-format photos.

If applying for dependents later: Marriage and/or birth certificates (must be translated into Thai and legalised or certified by the Ministry of Foreign Affairs or your embassy).

Property and Financial Documents:

Foreign Exchange Transaction Form (FET Form): Issued by a Thai bank, proving the THB 3,000,000 was transferred from a foreign source in a foreign currency specifically for purchasing real estate.

Sale and Purchase Agreement

Chanote Title Deed: Must be registered in your name at the Land Office. (For Bangkok properties, the transfer must have been registered on or after October 1, 2020).

House Registration (Tabien Baan): The yellow or blue residency book for the property.

Land Office Transfer Receipt: The official government receipt showing property transfer fees were paid.

Occupancy Verification Photos: Three specific photos of you at the property:

Standing in front of the building façade (with the building name clearly visible).

Standing at the unit entrance (with the room number legible).

Standing inside the living area of the unit.

Seller’s Documents:

If buying from a Thai individual: A copy of their Thai ID card and their house registration.

If buying from a developer or company: Current company registration documents and the shareholder list (BOJ5 form) proving the company is majority Thai-owned (over 50%).

Timelines to take note of:

TLS Verification Processing (Step 2): Takes approximately 7 to 10 business days.

The “15-21 Day Rule”: When you go to Immigration for your initial 90-day permit (Step 3), you must have at least 15 to 21 days of permitted stay remaining on your current tourist visa or visa exemption. If you have less than that, Immigration will likely reject the application and force you to do a border run to get a fresh entry stamp.

When to Start the Process: Because TLS takes up to two weeks to issue the Ministry Certification, applicants should initiate the TLS submission at least 30 to 45 days before their current Thai visa expires.

Visa Issuance: The 90-day permit is usually issued on the same day as your Immigration appointment. The 12-month extension processing time varies by the specific immigration office but is finalised within the initial 90-day window.

Summary of the 3-million-baht Investment Visa

The target audience is foreigners looking for a long-term, renewable residency option by purchasing a condominium worth at least THB 3,000,000. The condominium must be a freehold condominium and the money must be transferred from overseas in a foreign currency. The Thai bank must issue a FET Form. The condominium must be completed as only when a condominium is completed, will you obtain a title deed with your name on it. Before a condominium is completed in Thailand, the buyer will only have a beneficial interest in the future unit. There is no title deed with the buyer’s name on it. As this is one of the documents required for the application of this visa, the condominium you are using for the application needs to be a completed condominium.

The advanced option would be…

The Long Term Resident Visa under the Wealthy Global Individual option. Please see my previous article for details.

In a nutshell, to qualify as a Wealthy Global Individual, you must:

• Have assets of at least USD 1 million
• Have an annual income of at least USD 80,000 for the past 2 years
• Make an investment of at least USD 500,000 in Thai government bonds or Thai property or a combination of both

The main benefits of this Long Term Resident Visa over the 3-million-baht Investment Visa are:

1. 10 year validity
2. Reduced reporting (annual reporting vs 90-day reporting)
3. Tax benefits in the form of exemption on foreign-sourced income

Please note that these procedures and guidelines may change. It is important to check with the relevant authorities at the point of application for the latest procedures and guidelines.

Yours sincerely,

Daryl

The post Thailand’s new 3-million-baht Investment Visa appeared first on Daryl Lum's Blog.

If you have ever attended any of my webinars, you would have seen this particular slide.

This is a Venn diagram which I created. I usually talk about these four factors as things investors should apply their minds to when looking to invest in a certain city. In such instances, investors would be comparing various cities when looking at buying an overseas property. For example, a Singaporean may be considering whether to purchase a property in London, Australia, Thailand or Vietnam. In this case, what is his method of comparison? What metric should he peg one country against another?

I broke this down into 3 columns which essentially are 4 essential factors to consider. These are the same exact 4 factors that a rational buyer would consider when deciding whether to purchase property in that jurisdiction.

The 4 factors are:

1. Whether the country has a robust legal system
2. Whether there is a prevalent resale and rental market
3. Whether there is economic growth
4. Whether the country is socially and politically stable

Factor 1: Whether the country has a robust legal system

When I use the word robust, I am referring how well the legal system in the country is able to react to disputes. In other words, whether property buyers and owners have legal recourse to matters. If a buyer purchases from a developer and the developer does not deliver on its promise. For example, in the event that the property delivered is not what was promised like if the unit is smaller than what was stated in the sales and purchase agreement. In such an instance, can the buyer take the developer to court and if he can, will it be restrictively high? Or will it be difficult to sue the developer?

Then there is the consideration as to whether contracts in a certain country hold any weight. If a landlord enters into a contract with a tenant, will parties respect the contract. If one party breaches the contract, will the recourse be effective. Can the court in that jurisdiction grant the remedies that the other party seeks. It may be in the form of damages or specific performance.

When you are thinking of legal matters, you would also need to consider whether foreigners can actually hold property in their name. It would be a lot safer for the property to be held in your personal name rather than having to set up complex trust structures to own properties. For example, foreigners are not allowed to own properties in Indonesia. In such cases, an Indonesian company would be set up and the foreigner would own a certain number of shares of the company with the rest being held by one or more local nominees. The Indonesian company would then own the property. This, to me, raises many concerns. Most notably would be if the nominees decide to stake a claim in the property. Such an arrangement is also to circumvent certain restrictions which were put in place to restrict foreign ownership. It is not clear whether such arrangements would hold in court. Therefore, when purchasing properties, it is important, to me, that the title deed bears your own name.

Factor 2: Whether there is a prevalent resale and rental market

When we enter into an investment, we need to consider whether there is an exit strategy. It is easy to say that you will hold the property for a certain number of years before selling it off. However, a property is extremely illiquid. Even in a very vibrant property market, you will need time to sell the property. It is not like stocks where you can go to the stock market and get a sale done very quickly.

In this case, before you make a purchase, you will need to think of the platform which you will be selling your property on. It may not be you who will be selling off the property. It may be your agent who is doing the selling. However, you should know what are the platforms available that can reach out to prospective buyers.

If you are looking to collect rent on your property, you will need to ensure that there is a market for tenants and landlords. You should see signs of this market on property platforms. A simple example of this would be what we have in Singapore in the form of PropertyGuru. Therefore, as for overseas purchasers, you will need to see whether the property market which you are entering has a PropertyGuru equivalent. A platform that actively has new listings with older listing being taken up gradually.

Factor 3: Whether there is economic growth

Property prices move in tandem with economic growth. This is because the local demand for property is typically the main driver for property prices, not overseas buyers. Yes this can be a revelation and a shock to some but it is true as the sky is blue. I have heard many buyers remarking that the local Thais do not have the money to purchase condominiums. However, the truth could not be further from the truth. The locals purchase way more properties than the foreigners. There is good reason for them to do so as well. They see it as a good hedge for inflation. It is not uncommon for an upper middle class Thai family to own multiple properties.

Therefore, you must look at whether there is economic growth in the country. An extreme would be Burma or Ukraine. War ravaged countries hare little economic growth and prospects. This is one of the main reasons why property prices in these countries are not rising.

Economic growth presents itself in many ways. A simple way to measure would be to look at the country’s reported gross domestic product (GDP). However, this number is usually indicative of how the economy has performed and not an indication of how it will perform. We need to know that there will be economic growth in the future to predict if there will be a possibility that the overall wealth of the country will rise and consequently, property prices will move in the same trajectory.

Look out for whether the country is open to trade. Is it part of some greater plan? Like how Thailand, namely Bangkok is in the centre of China’s One Belt One Road initiative and hence has a mega rail network in place to be a conduit for Chinese goods and services to the rest of South East Asia.

Other countries should have such plans as well. Consider them wisely and decide whether this is something that would aid in the wealth creation of that country. Not every government in the world is as wealthy as Singapore’s. Spending on big ticket infrastructure projects will typically yield healthy returns in the future. Look out for such plans from these governments.

Factor 4: Whether the country is socially and politically stable

Social stability refers to when a country is collectively stable. It has a fixed set of norms and is unlikely to change. When you are looking to invest, a socially stable environment is more ideal than one that is not socially stable. Imagine a situation where the society is unstable. One where there is racial unrest and general distrust among certain groups in society. In comparison, a socially stable society is one like Singapore where various races live harmonously together. Social norms are well developed and in general, there is little to no civic unrest.

Political stability refers to the stability of the ruling party or government of the day. To have political stability is to allow the ruling party to follow through with their plans for the country. Imagine one government coming up with certain policies and plans to advance the economy and then losing the next election. The next government then reverses on the policies and goes in a totally different direction.

Social stability and political stability do not need to move in tandem. For example, Thailand can be said to be very socially stable. There is a general acceptance of foreigners in the country. Buddhism is the main religion with religious freedoms granted to other religions. The various races live harmoniously together. However, Thailand is extremely politically unstable. It changes government extremely frequent. In such a situation, one can argue that even though the government changes frequently, the consideration should be whether the general direction of the governments that follow veer in a similar direction as the ones that came before.

There are other factors which I did not consider 

Those 4 factors, in my humble opinion, should form the backbone of your thought process when investing in overseas properties. They are other factors but these factors which I will postulate are not universally applicable. One such factor is proximity to your place of residence. For example, after comparing Bangkok and New York, I may decide that New York is a better property investment destination. However, because it is far away from my place of residence, Singapore, I will not consider it because I am not someone who likes to travel such long distances to deal with my property if ever I needed to. Another consideration would be communication. While some people may pick London over Bangkok because the mode of communication in the UK is English, this may not be a consideration for someone who understands Thai.

Therefore, while there are other factors for consideration, I would urge buyers to stick to my first 4 factors before moving on to any additional factors. Those 4 factors can and should be applied by every buyer looking to invest in an overseas property. It applies to any individual of any nationality resigning in any country who is looking to purchase properties outside of his or her country.

In closing, I cannot stress the fact that every investment comes with a certain level of risk. Buyers need to understand these risks. Naturally, as you are not a resident of the country which you are investing in, overseas property investment is usually frought with a higher degree of risk. However, knowing what to look out for can aid a buyer to mitigate such risk.

Yours sincerely,

Daryl

The post Four factors to consider when investing in overseas properties appeared first on Daryl Lum's Blog.

It was posted on the 23rd of October at 11:21 pm on CNA’s website.

My displeasure with this statement is two-fold.

My first gripe is that this comes less than a week after Norwood Grand sold 84% of its units at an average per square foot price of SGD$2,067 at its launch. Why did these analysts not make this comment before the launch? Did this analysis come to mind within the last week?

My next gripe is that the statement assumes that the commercial property market is disconnected from the residential market. Is it not the case that the property market moves in general tandem? The investment landscape in Singapore is very limited. Our stock market, the SGX, provides little promise for strong returns. It is a bourse for traditional blue chip stocks with little to no IPOs on the mainboard (I believe there was only one IPO this year). So then Singaporeans and Singapore residents typically overweight property in their investment portfolio. Our property market is not always driven by fundamentals but in many instances, investors are flocking in for fear of missing out. The notion of “better buy now if not prices will be more expensive in the future” is very prevalent. Gone are the days when property buyers buy a property because the property fits their needs. Instead, property purchases are driven by the thinking that one can make a handsome profit in the future. Property agents, property agencies and developers know this. When a commercial property is mooted to a property buyer, it will always be “This is a good investment because you can get [a certain] yield” and “You can sell it off at a certain profit in the future”. Usually, the reasons are because of location, transportation, and growth plans from the government, namely the Urban Redevelopment Authority (URA). And almost all of these factors for growth and prospects are similar to if a residential property was the point of contention. So my question is, if the reasons for why you would buy a commercial property and residential property in the same area, say Woodlands, are similar, why pass the comment that commercial properties in Woodlands have to remain competitive to deal with competition from Johor but then nothing is said about residential properties in the same area?

Sounds contradictory? Well, it is contradictory. The basis for you making the statement that Johor commercial rents are low and hence commercial rents in Woodlands need to be commensurate such rents should apply to residential properties. One group of individuals who should have knowledge of this statement before they make the purchase would be the buyers of Norwood Grand.

My stand is this: We do not know what the future holds. Properties in Woodlands may eventually accelerate and the average per square foot price of Norwood Grand may eventually rise significantly above the average per square foot launch price of SGD$2,067. Buyers would be able to make healthy profits even after deducting interest costs, stamp duties and agent fees. However, for analysts to comment in such a manner where their position on the investment potential of properties in Woodlands shifts over the course of a few weeks or possibly even days is really strange. If businesses can choose to move to Johor if rents are cheaper, so can workers. In fact, shifting a worker from a residential property in Woodlands to Johor is much simpler than shifting an office, factory or warehouse from Woodlands to Johor. Imagine the impact it would have on all staff, suppliers, vendors and clients. The company will also have to deal with a new regulatory environment and also trade in a different currency. Remember this, we are always focusing on the ease of connectivity between the two countries to validate our decision to invest in places like Woodlands and Jurong. People move bilaterally. Easy connectivity does not mean solely that people from Malaysia will find it easier to come to Singapore to work. It can also mean that people in Singapore will find it easier to enter Malaysia to work.

My question to these analysts: So which is easier? For a company to shift its operations from Woodlands to Johor or for a worker living in Woodlands to shift his residence from Woodlands to Johor? Especially if that worker is a Malaysian.

Let us now consider whether such a statement is in line with what has constantly been reported.

Median resale prices for HDB flats have climbed the most in heartland areas over the past two and a half years. Woodlands and Sembawang being the towns with the greatest increases.

There are HDB flats in Woodlands being sold for over a million dollars.

Now the question is whether we can segregate HDB price increases from the private residential market. My answer to this question is that the HDB and private residential market should be moving very much in tandem. Since the introduction of the draconian additional buyers’ stamp duties (ABSD) on foreigners, the number of foreigners purchasing private residential properties has slowed to a trickle. It is essentially non-existent. As for HDB flats, it is for Singaporeans and Singapore PR couples. Therefore, the group of people purchasing HDB flats and private residential properties are essentially the same. If HDB flat prices are rising, private residential prices should be rising correspondingly.

Now if commercial property prices move in tandem, or at least track to a large degree, private property prices, then would commercial property prices not be on an uptrend as well? Why then the sudden warning that commercial property rents need to be competitive to match those in Johor?

I just think that such a comment is uncalled for and if there is a basis for such a comment, that basis should similarly apply to residential properties. If so, then would property prices in Woodlands be overpriced? SGD$2,067 per square foot for a 99-year leasehold condominium? Just for discussion’s sake, an SGD$2 million loan at 3% interest for 20 years would come up to a monthly repayment of SGD$11,092 per month. How much are individuals paying for their mortgages or rents across the causeway?

Here is an article from ChannelNewsAsia: https://www.channelnewsasia.com/today/big-read/johor-property-market-remains-hot-singapore-buyers-have-their-work-cut-out-making-right-investment-big-read-4363096

So does it still make sense?

Yours sincerely,

Daryl

The post Conflicting reports by analysts and news sources do not help property buyers appeared first on Daryl Lum's Blog.

As ECs, at launch, are public housing, therefore, purchasers will need to form a core family nucleus to purchase an EC. A core family nucleus is formed by the core members. The core members are the applicants and occupiers who enable the household to qualify to purchase and own an EC under one of the eligibility schemes. All core members must be the applicants, remain as applicants and occupy the EC during its minimum occupation period (MOP). If their names are removed, the household will be ineligible to own that EC unit.

For example, a household consists of a husband and wife and two children. The husband and wife are the core members as the EC was purchased under the husband and wife or spouse scheme.

Let us break the EC application into steps.

Step 1: Consider your eligibility

Eligible Households

The household must have one of the following groups as its core members to be eligible to purchase an EC

1. Fiance and fiancee
2. Husband and wife
3. Parent and child
4. Siblings (must be orphaned and single)
5. Two or more singles (up to four)

Citizenship requirements

For fiance and fiancee, husband and wife and/or parent(s) with child(ren), orphaned siblings

• One party must be a Singapore Citizen.
• There must be at least another Singapore Citizen or Singapore Permanent Resident (PR).

For two or more singles

• All singles applying jointly for the EC must be Singapore Citizens.

Age

• All applicants must be at least 21 years old.
• For singles who are applying jointly, they must all be at least 21 years old.

Income ceiling 

The total monthly income of all persons listed in the application must not exceed SGD$16,000.

Ownership and/or interest in property in Singapore or overseas (excluding HDB flat)

All applicants and occupiers in an EC application

• must not own or have any interest in any local or overseas private residential property; and
• may only apply for an EC 30 months after disposing of their private residential property.

If you purchase an uncompleted property, be it local or overseas, you do not have ownership of the property as the property is uncompleted. You only have a beneficial interest in that property. If you want to apply for an EC, you must not have such interest.

Ownership and/or interest in HDB flat

If an applicant owns or has an interest in an HDB flat, that flat must be disposed of within 6 months of the completion of the EC purchase. The disposal date refers to the legal completion date.

Resale levy (if applicable)

If one or more core member applicants have taken a housing subsidy, he or she will be considered a second-timer and will need to pay the applicable resale levies. If any core member has taken more than 1 housing subsidy, he or she will not be eligible to apply or be listed as a core occupier in the EC application.

Step 2: Obtain an in-principle-approval (IPA)

If you fulfil the eligibility criteria, you will next need to get an IPA from the bank. This is in essence the bank telling you that it will grant you a mortgage to purchase the property you intend to purchase. Do note that if your financial situation changes, for example, you changed your employment, then you will need to obtain a new IPA as the IPA was issued based on your previous employment.

Step 3: Submit your application to purchase an EC

You will submit your application and documents with the developer of the development which you intend to purchase. You will be given a ballot number to select a unit of your choice on the day of the launch.

Step 4: Selecting a unit on the day of the launch

You can still back out if you eventually do not want to continue the purchase. If you intend to book a unit, you will have to issue a cheque with an amount equivalent to 5% of the purchase price of the unit. The developer will grant you the Option to Purchase (OTP).

It is at this point that you will need to decide whether you intend to be on the Normal Payment Scheme (NPS) which is progressive payments or under the Deferred Payment Scheme (DPS). This is because there is a price difference. If you select DPS, the purchase price is usually 2-3% more expensive.

Subsequently, you will receive the Sale and Purchase Agreement which you will need to sign and return to the developer.

These documents will be submitted by the developer to HDB for review. At this point in time you will need to make an application to the CPF board if you intend to use your CPF monies to make payments towards your EC.

For DPS, you will not need to make payment on anything after the initial 20%.

For example, if the bank agrees to grant you a loan of 50% of the purchase price, when the property obtains its TOP and 65% of the purchase price is due, you will need to fork out 30% in cash and the other 35% can be covered by the bank loan. (This is because the first 50% needs to be paid by the purchaser before the remaining bank loan kicks in. Here, there was already an initial 5% + 15% paid when the OTP was granted and upon signing of the S&P.)

An additional example, if the bank agrees to grant you a loan of 60% of the purchase price, when the property obtains its TOP and 65% of the purchase price is due, you will need to fork out 20% in cash and the other 45% can be covered by the bank loan. (This is because the first 40% needs to be paid by the purchaser before the remaining bank loan kicks in. Here, there was already an initial 5% + 15% paid when the OTP was granted and upon signing of the S&P.)

For NPS, you will need to make payments progressively. The point at which your bank loan kicks in is also dependent on the amount of loan that the bank is willing to extend to you. For example, if the bank is willing to loan you 60% of the purchase price, you will need to make payments on the first 40% before the bank loan kicks in. In this case, referring to the chart below, you will need to make payments up to the completion of the reinforced concrete framework. After which, the bank loan will be disbursed progressively. When the bank loan is disbursed, you will only pay instalments on the amount disbursed. So if the first disbursement is at the point where the brick walls are completed, your bank loan is based on that 5% of the purchase price. Consequently, your instalments will be based on this 5% over the tenure granted and not the full 60%. Therefore, your instalments start small and gradually increase when the property is completed.

Credit: The design team at Little Big Red Dot

My take:

Considering the fact that the difference is about 2-3% of the purchase price, I would go for the Normal Payment Scheme (NPS) over the Deferred Payment Scheme (DPS). That 2-3% is about half the price of the stamp duty that you will need to pay for the property purchase. While it is very common for individuals to opt for DPS on the pretext that they can put that money to work in other forms of investments, the truth is that Singaporeans typically only have one investment and that is their property. Moreover, purchasers of ECs cannot make any private property investments. Be it locally or overseas, residential or otherwise. If you look at the comparison closely, you are only deferring 40% of the payments. At the point the development obtains its TOP, the bank loan will start. Additionally, as I mentioned, the instalments are only on the disbursed amount. If you consider a 5% disbursement on a $2 million loan over 20 years, at a 3% interest rate for a 25-year loan tenure, the monthly instalment is $474.

A 3% difference in that $2 million works out to be $60,000. Hence, selecting DPS merely defers your instalments of hundreds up to a few thousand over a year or so in exchange for you making a purchase on that same property for a few tens of thousands more.

Personally, it does not make sense to me.

But that is just my take.

Yours sincerely,

Daryl

The post The Normal Payment Scheme and Deferred Payment Schemes for Executive Condominiums appeared first on Daryl Lum's Blog.

Let us consider this example: A Malaysian would like to purchase a THB 7 million condominium in Bangkok

There is a 30% downpayment for the condominium.

The Malaysian would need to pay THB 2.1 million for the condominium to Bangkok. However, he cannot make this payment in baht but rather, he has to make this payment in a foreign currency. His obvious currency of choice would be the Malaysian ringgit.

So he goes on to a currency conversion site like XE currency and checks the exchange rate and this is what he sees.

As of 9th July 2024, the exchange rate is 1 Malaysian ringgit to 7.73 Thai baht. If he wants to transfer THB 2.1 million exactly, he would need to transfer 271,513.45 ringgit to the developer’s Thai bank account.

However, this is the rate that XE Currency is offering. When the ringgit reaches the developer’s Thai bank, it will be converted based on the rate at the Thai bank. This rate can be higher or lower than XE currency. Moreover, the money will only reach the developer’s Thai bank in perhaps a day or two. The rate would be different. There is also the issue of bank charges for the telegraphic transfer. In short, it is close to impossible for him to make a transfer that will equate to the developer receiving exactly THB2,100,000. Since the developer requires exactly THB 2,100,000 and no less, the only option would be to transfer a bit more. The issue is how much more?

The Malaysian would know the bank charges on his end, i.e. his Malaysian bank. However, he may not know the bank charges over at the developer’s end. Yes, the bank charges can be found on the bank’s website but different types of accounts may have different charges for telegraphic transfers. Therefore, the prudent thing to do in my opinion would be to buffer for 5% more. In this case, I would advise the Malaysian purchaser to transfer at least 105% x 271,513.45 = 285,089.12 ringgit. In fact, I would round it up to the nearest thousand and advise that he transfer 286,000 ringgit.

The question that results from this would be, “How then are excess monies paid accounted for”?

The answer to that would be that excess monies can be rolled over to the next time the purchaser needs to make another payment. In this case, when the condominium is completed, the developer will require the purchaser to make the final 70% payment of the THB 7 million. The purchaser can offset the previous excess payments in this payment. However, I would still recommend that the purchaser makes the transfer without considering the previous excess payment. The excess payments can be consolidated and then returned to the purchaser when he or she collects the keys to the property. This is in the form of a cheque which can then be banked into a Thai bank account.

At every stage of the transfer, the developer will provide an update in table form as to how much money has been paid. Therefore, there will be a record as to the excess monies that were transferred.

This is an example using a property I purchased. It was some time ago and hence the payment schedule for this development consisted of quite several transfers. I thought that this would be a good illustration of how organised the schedule provided by a developer is. Do note that the payment schedule these days is a lot less complex. It is usually two transfers of 15% with one final transfer of 70%.

The table above was sent to me via email every time I made a transfer. From there I could tally the excess payments I made and eventually, the developer returned the excess amount to me in the form of a cheque. I banked it into a Bangkok Bank account. I opened that bank account using the sales and purchase agreement of the condominium. This is what happens when foreigners purchase a condominium from Thailand.

I cannot say that this is the norm for all property developers. However, I have dealt with just about all major property developers in Bangkok and this is how they deal with all foreign purchasers and money transfers. This is the reason why I have always reiterated that foreign buyers should be making Thai property purchasers from established developers. The process is well settled and communication is extremely organised and easy to understand.

Yours sincerely,

Daryl

The post How will I know how much foreign currency to pay for my Thai property? appeared first on Daryl Lum's Blog.

The best visa for most would be the Long Term Resident Visa

This requires a proper understanding of the tax code in Thailand to know why I made that statement. When you are in your retirement years, one of the considerations has to be capital preservation. There were changes in the interpretation of the Thai tax code recently. The major change would be that a Thai tax resident’s income derived from employment or business from abroad or from assets located abroad is subject to tax when this income is brought back into Thailand. An individual is a Thai tax resident if he or she is physically located in Thailand for more than 180 days. So long as that individual is in Thailand at any point of the day, that will be considered as one day that he or she is physically located in Thailand. For example, if an individual leaves Thailand at 1201 am, then that person will be deemed to be in Thailand for that day even though he or she is in Thailand for a minute. This is the same if that individual lands in Thailand at 1159 pm. Even though that individual is in Thailand for one minute of that day, that will be considered as one day that he or she is physically in Thailand. This is why we never advise clients to leave it to the very last day to leave Thailand to not reach the 180-day limit.

An example of this affecting a foreigner who is a Thai resident would be a Singaporean who realised capital gains on investment and would like to bring those monies into Thailand. In Singapore, capital gains are not taxed. However, the Thai tax code will tax capital gains and starting from 1st January 2024, capital gains from abroad that are brought into Thailand by a tax resident will be taxed. The Singaporean who is residing in Thailand because he is a retiree and has moved to Thailand to retire would be affected by this. If he had remained in Singapore, he would not have to pay capital gains tax on his Singapore investment gain. However, now he would have to pay capital gains tax in Thailand on his Singapore investment gain. It would not be ideal for him to leave the money outside of Thailand because he is living in Thailand. He needs to use this money for his retirement.

There is, however, a visa that provides for an income tax exemption for income derived from employment or business from abroad or from assets located abroad when this income is brought back into Thailand. This is the Long Term Resident Visa and the three categories under this visa which qualify for this exemption are Wealthy Global Individual, Wealthy Pensioner and Work from Thailand Professional.

Retirees or wealthy individuals will likely bring their money from their home country into Thailand. Also, it is difficult for a retiree to bring all their money into Thailand before becoming a tax resident (and hence subjecting themselves to the Thai tax code). This is because there might be retirees who may want to try retiring in Thailand for a year or so before committing to the country long-term. Hence retirees usually have investments outside of Thailand. By the time they choose to liquidate their investments and move their monies into Thailand, they would have already become Thai tax residents and would be subject to the Thai tax code. Therefore, with the advent of the Long Term Resident Visa, a foreigner who can qualify for it should apply under this scheme rather than the usual retirement visa. This also puts paid to the Thai Elite Visa, although I do suspect that amendments will be made to that visa to put it in line with what the Long Term Resident Visa offers.

The best medical facilities are in Bangkok

While Thailand offers many retirement cities, the best medical facilities are still in Bangkok. In fact, in a recent Newsweek ranking of the best hospitals in Thailand, the top 17 hospitals are all located in Bangkok. While it is still possible to live outside of Bangkok and travel to Bangkok as and when medical treatment is required, most retirees will choose to live in Bangkok for ease of access to these medical facilities.

This is an important consideration when investing in Thai property as medical tourism is huge for the country. Be it for rent or sale, properties in Bangkok will always avail themselves to a class of individuals who want to use these properties as a place to live while they seek medical treatment within the kingdom. Bumrungrad International Hospital is listed within the world’s best hospital list by Newsweek. This hospital is located in the Nana and Asoke area and is one of the reasons why properties in that area have a steady demand from tenants. If you have never been to a top-class medical facility, I implore you to do a full body medical checkup at Bumrungrad International Hospital to understand the standard of medical care in Bangkok. It is a very cost-effective way to get a full body check-up at a world-class medical facility. When you are there, you can observe the number of foreigners who are patronising the hospital for medical services.

Immovable property in Thailand has to be dealt with with a Thai will

The concept of lex situs applies to immovable property. The law of the land will deal with the immovable property that sits on that land. If you are looking to acquire property in Thailand, do note that you will need to do up a will in Thailand to deal with the distribution of that property upon your demise. For example, a Japanese cannot will his Thai property in his Japanese will. He will need to do a separate will in Thailand to deal with his Thai property. If there is no Thai will done, the property will be distributed in accordance with Thai intestate succession laws. Retirees who purchase Thai properties need to make a Thai will. On top of that, if retirees decide to spend their final days in Thailand, upon their demise, they will need assistance with executing their will as such matters will need to be dealt in Thailand.

This is where they should have points of contact in Thailand who are familiar with not only dealing with Thai wills but who are also familiar with dealing with Thai properties. In most cases, the property management company should be able to deal with these matters for their clients. A property management company is usually engaged when the owner of the Thai property is not residing in Thailand and would need someone in Thailand to manage and deal with property related matters. The property management company should be notified as to the existence of the will and its contents. A good property management company would assist the deceased’s beneficiaries with the transfer of the property to his or her name. Therefore, it is important that the Thai property owner not only does a will, he or she informs the property management of the existence of the will and its contents.

It becomes a bit more tricky when the property owner is residing in the property that he or she purchases. This is the case with most retirees. Therefore, there is little to no communication with a property agent if the property owner is residing in his or her own property. This is different when a property is being rented out and there are renewals and rental payments. There is often constant communication between the property owner and the property management company. Retirees who live in their properties do not have this communication. The best thing they can do is to inform someone that they can trust to handle their matters when they pass on.

Tax matters

In just about every visa application, the applicant needs to produce a police certificate to state that the individual has not been convicted of an offence in Thailand. Tax offences are still offences. Therefore, one of the ways in which a foreigner can be convicted of an offence is to breach the Thai tax code.

There are broadly two categories of taxes. Personal income taxes and corporate taxes. If the Thai tax resident owns a property, then he or she will need to pay property taxes. Do note that if an individual is collecting rental income from his property, that is classified as personal income if the property is under his or her personal name. If the property is held by a Thai company, then that Thai company will need to include that rental income as corporate income taxes. Property taxes are taxes that are paid because an individual is holding a property. This tax needs to be paid irregardless of whether the property is rented out or not. It is paid because the property is being held by an individual or a company.

It is important to have a proper tax advisor or at least a property management company that can help you with such tax filing related matters.

Reporting

Despite obtaining the relevant visa that allows an individual to reside in Thailand, he or she needs to adhere to the reporting requirements. These are the requirements for an individual to report to the relevant immigration offices. The visa holder needs to do this reporting to maintain the relevant visa. There are immigration specialist companies that will aid the visa holder to do the reporting on his or her behalf. All they need to obtain is a power of attorney to do the reporting on their behalf.

This reporting requirement can be quite strict. If it is not adhered to, there may be fines which the visa holder has to pay. In the worst of cases, the visa may not be renewed.

If you are looking to retire in Bangkok, it would serve you well to know these few pointers. It is important that as a foreigner we do not fall foul of any Thai laws. Negligence is still an offence and is not a valid excuse to constitute as an exemption.

Yours sincerely,

Daryl

The post I would like to retire in Bangkok, what do I need to take note of? appeared first on Daryl Lum's Blog.

SHORT TERM VISAS (Less than 1 year)

Tourist visa

The most common type of visa is the tourist visa. This visa is for tourists who want to visit Thailand for leisure. For some foreigners holding certain passports, they have the luxury of visa-free travel. In reality, it is not visa-free because a visa will still be issued on the spot at the Thai immigration counter by an immigration officer. The term visa-free travel means the foreigner does not have to apply for a visa before arriving in Thailand. For example, nationals from Malaysia, Singapore and China do not have to apply for a visa ahead of their arrival in Thailand. They will be issued a visa on arrival in Thailand. The issued visa is up to 30 days. For some nationalities, this limit is shorter. For example, nationals from Burma will be issued a 14-day visa on arrival. Moreover, this visa-on-arrival is only if they arrive by air travel.

90-day visa

This is not a tourist visa. This is usually a visa that you need as a prelude to applying for a longer 1-year visa. The 90-day visa only allows you to enter Thailand once. The application for the 90-day visa is done in your home country. For example, if you are from Malaysia, then you will need to be in Malaysia when making the application.

You will apply for this 90-day visa as a precursor to applying for the following visas:

1. Non-immigrant B visa or Thailand Business Visa
   This visa is applicable if you want to work or conduct business in Thailand
2. Non-immigrant O visa (retirement) or Retirement Visa
   This visa is applicable if you are above 50 years old and want to retire in Thailand
3. Non-immigrant O visa (Thai spouse) or Marriage Visa
   This visa is applicable if you are married to a Thai national. This allows you to live in Thailand.

The steps to applying for the 90-day visa are as such:

1. Prepare all the required documentation for the application.
2. Submit the documents to the Thai Embassy or consulate in your home country and pay the application fee.
3. Collect your visa when it is approved (typically about 10 working days). You can enter Thailand after collecting the visa.

The documents and eligibility criteria are:

1. A valid passport with at least 6 months of validity
2. Your travel itinerary
3. Proof of finances (bank statement or latest pay slip from your employer)
4. (If you are applying for a non-immigration B visa) A valid work permit
5. (If you are applying for a non-immigration O visa (retirement) or retirement visa) Be at least 50 years old and produce a bank statement showing at least 800,000 THB (or equivalent)
6. (If you are applying for a non-immigrant O visa (thai spouse) or marriage visa) A valid marriage certificate

LONG TERM VISAS (1 year or more)

Retirement Visa

The retirement visa has the following benefits and features:

1. 1 year uninterrupted stay in Thailand
2. The retirement visa is renewable annually
3. The ability to exit and re-enter Thailand
4. The ability to renew the retirement visa without having to leave Thailand

The documents and eligibility criteria are:

1. Must be 50 years old or older
2. Have a valid foreign passport
3. Proof of residence in Thailand (6-month rental contract or ownership of Thai property)
4. Meet one of the following financial requirements:
   a) Place THB 800,000 as a security deposit (This must be done at least 2 months before the application)
   b) Have a monthly income of THB 65,000
   c) Have a combination of both a) and b)
5. Have proof of 4.
   a) Proof of the security deposit (A copy of the bank book with a local bank showing the deposit)
   b) A letter from the Thai embassy verifying the income of THB 65,000
   c) A combination of both a) and b)
6. A Police Clearance Certificate (to show that you do not have any criminal record in Thailand)
7. Medical Certificate.
8. A copy of your health insurance in Thailand with a minimum coverage of USD$100,000
9. Any other documents

(Items 6, 7 and 8 are not required if the application is done in Thailand)

If the application is done from outside of Thailand:

Step 1: Apply for a 90-day non-immigrant O visa (retirement) with the nearest Thai embassy in your country of residence
Step 2: Travel to Thailand and remain in Thailand for at least 60 days
Step 3: You can apply for the Retirement Visa in the final 30 days of your 90-day non-immigrant O visa (retirement)

If the application is done from within Thailand:

Step 1: Have a valid tourist visa or visa exemption while in Thailand
Step 2: Have a Thai bank account
Step 3: Apply for the non-immigrant O visa (retirement) with the Thai Immigration Office
Step 4: Apply for the Thai Retirement Visa

Dependent Retirement Visa (spouse)

This visa is applicable for spouses of individuals who are holding retirement visas. This allows the spouse to also retire in Thailand even though he or she has not reached the age of 50. If he or she is above the age of 50, he or she can apply for a retirement visa.

The Dependent Retirement Visa has the following benefits and features:

1. It is renewable on an annual basis
2. It is valid so long as the marriage is valid and will be cancelled if the marriage has ended
3. Both parties will require a passport with at least 6 months of validity

The documents and eligibility criteria are:

1. Must be legally married and remain legally married to maintain the Dependent Retirement Visa
2. Marriage certificate
3. The retirement visa holder will need to produce documentary proof that he or she can support his or her spouse

To maintain your Retirement Visa and Dependent Retirement Visa

1. Report to the Thai Immigration Office every 90 days. If you leave the country, the 90-day count will start from zero. The reporting can be done in person or you can appoint a professional to do the reporting on your behalf. You will need to provide them with a power of attorney to do so. The reporting can be in person at the Thai Immigration Office or via mail or online
2. If you choose to leave Thailand, you will need to obtain a re-entry permit. You can do so at any immigration office or just before you leave Thailand
3. You need to renew your Retirement Visa every year. You will need to have the appropriate funds in your bank account (the criteria when you applied initially) at least 3 months before proceeding with the renewal
4. You are not allowed to work in Thailand

5-year Retirement Visa

If you are very sure about Thailand being your retirement destination, you can acquire the 5-year Retirement Visa.

The 5-year Retirement Visa’s main difference when compared to the usual Retirement Visa is that it allows the individual to reside in Thailand for up to 10 years instead of just 1 year. It can only be renewed once for a total of 10 years.

The documents and eligibility criteria are:

1. Must be 50 years old or older
2. Must be a national of one of these countries: Japan, Australia, Denmark, Finland, France, Germany, Italy, Netherlands, Norway, Sweden, Switzerland, the UK, Canada, the USA
3. Have a valid foreign passport
4. Meet one of the following financial requirements:
   a) Have a deposit of at least THB 3 million or equivalent in your bank account
   b) Have a deposit of at least THB 1.8 million or equivalent in your bank account and an annual income of at least THB 1.2 million or equivalent.
5. A Police Clearance Certificate (to show that you do not have any criminal record in Thailand)
6. Medical Certificate to show proof that you are not suffering from any of the following: any drug addiction, elephantiasis, leprosy, tuberculosis or syphilis.
7. A copy of your health insurance in Thailand with a minimum coverage of THB 400,000 for inpatient care and THB 40,000 for outpatient care.
8. Any other documents

To maintain your 5-year Retirement Visa

1. Report to the Thai Immigration Office every 90 days. If you leave the country, the 90-day count will start from zero. The reporting can be done in person or you can appoint a professional to do the reporting on your behalf. You will need to provide them with a power of attorney to do so. The reporting can be in person at the Thai Immigration Office or via mail or online
2. Maintenance requirement for the first year: Maintain at least THB 3 million in the individual’s bank account or at least THB 1.8 million and an annual income of THB 1.2 million.
3. Maintenance requirement for the second year onwards: Maintain at least THB 1.5 million in the individual’s bank account.
4. Report to Thai immigration annually to provide an update on the individual’s qualifications.
5. The individual is not allowed to work in Thailand.

Marriage Visa

This visa is for individuals who are legally married to a Thai national. This visa allows the individual to live in Thailand and is a route towards permanent residency in Thailand.

The Marriage Visa has the following benefits and features:

1. It is a 1-year extended stay visa
2. It is renewable on an annual basis
3. There is no need to obtain a re-entry permit when flying in and out of Thailand during the visa period
4. The Marriage Visa holder can apply for a Thai work permit and work in the country for a Thai company (This makes job hunting easier as the employer will only need to deal with your work permit application without the need to deal with your visa)

The documents and eligibility criteria are:

1. Must be legally married and remain legally married to a Thai national
2. Marriage documents (the relevant marriage certificate)
3. Proof of residency in Thailand (can be the individual’s address or his or her spouse’s address)
4. Proof of a deposit of at least THB 400,000 in a Thai bank account. This needs to be there for at least 2 months before the application
5. Proof of a monthly income THB 40,000 in the form of a letter from the foreign embassy from the individual’s nationality
6. Any other required documents

The application process:

Step 1: Acquire a 90-day visa.
Step 2: Apply for the 90-day visa to be converted into a 1-year Marriage Visa. This application can only be done in the final 30 days of the 90-day visa.

Thailand Elite Visa

The Thailand Elite Visa is a long-term tourist visa. The visa is managed by the Thailand Privilege Card Company Limited. The Thailand Elite Visa allows certain affluent and high-earning foreigners to obtain a long-term multiple-entry visa to live in Thailand for up to 20 years.

The documents and eligibility criteria are:

1. Must not be a national from the following countries: North Korea, Afghanistan, Nepal, Pakistan, Sri Lanka, Central Africa, Cameroon, Democratic Republic of Congo, Republic of the Congo, Equatorial Guinea, Guinea, Ghana, Liberia, Nigeria, Sao Tome and Principe, Sierra Leone, Somalia, Sudan, Algeria, Iraq, Egypt, Iran, Lebanon, Libya, Palestine, Syria, and Yemen.
2. Must be a holder of a valid foreign passport
3. There is no age limit for this visa
4. Must have not been sentenced to imprisonment for any offence in any country (an exception if the offence committed is due to negligence)
5. Not a bankrupt
6. Must not be of unsound mind

To maintain The Thailand Elite Visa

1. Report to the Thai Immigration Office every 90 days. If you leave the country, the 90-day count will start from zero. The reporting can be done in person or you can appoint a Thai Elite staff to conduct this reporting on the individual’s behalf.

The types of memberships:

Gold (5-year) THB 900,000
– Valid for 5 years

Platinum (10-year) THB 1.5 million
– Valid for 10 years
– 5-year multiple entry tourist visa, renewable for another 5 years
– THB 1 million for additional family members

Diamond (15-year) THB 2.5 million
– Valid for 15 years
– 5-year multiple entry tourist visa, twice renewable for another 5 years
– THB 1.5 million for additional family members

Reserve (20-year) THB 5 million
– Valid for 20 years
– 5-year multiple entry tourist visa, thrice renewable for another 5 years
– By invitation only

Thailand Business Visa

This visa is for individuals who want to launch a business or start-up in Thailand. This is also for those who want to look for employment within Thailand.

The documents and eligibility criteria are:

1. Hold a valid passport with at least 6 months of validity
2. Complete the Non-immigration B Visa application form
3. Submit a recent (no longer than 6 months) passport-sized photograph
4. Submit proof of finances (THB 20,000 income for sole applicant and THB 40,000 income if applying with family)
5. A copy of the travel itinerary

Long-Term Resident Visa

The Long Term Resident Visa is a 10-year visa aimed at attracting talented foreigners to relocate to Thailand on a long term basis. This visa allows such foreigners to live and work in Thailand. It comes with many incentives and benefits.

There are 4 categories

1. Wealthy Global Individuals
2. Wealthy Pensioners
3. Work from Thailand Professionals
4. Highly-skilled Professionals

How to qualify as a Wealthy Global Individual

• Have assets of at least USD 1 million
• Have an annual income of at least USD 80,000 for the past 2 years
• Make an investment of at least USD 500,000 in Thai government bonds or Thai property or a combination of both

How to qualify as a Wealthy Pensioner

• Be at least 50 years old
• Have a passive income of at least USD 80,000 per annum at the time of application
• Applicants with a passive income below USD 80,000 but above USD 40,000 may be eligible if they make an investment of at least USD 250,000 in Thai government bonds or Thai property or a combination of both
• Employment income will not be considered

How to qualify as a Work from Thailand Professional

• Have an annual income of at least USD 80,000 for the past 2 years
• Applicants with an annual income below USD 80,000 but above USD 40,000 may be eligible if they have a Master’s degree or above, own any intellectual property or have a company that received Series A funding
• The employer of the applicant must be a publicly listed company on a stock exchange
• If the employer is a privately held company, the company must be operational for at least 3 years with a combined revenue of at least USD 150 million in the past 3 years.
• The applicant must have at least 5 years of experience in his or her relevant field over his or her past 10 years of employment.

Key benefit of Wealthy Global Individual, Wealthy Pensioner and Work from Thailand Professional with the Long Term Resident Visa:

These individuals are entitled to income tax exemption for income derived from employment or business from abroad or from assets located abroad when this income is brought back into Thailand.

How to qualify as a Highly Skilled Professional

• Have an annual income of at least USD 80,000 for the past 2 years
• Applicants with an annual income below USD 80,000 but above USD 40,000 may be eligible if they have a Master’s degree or above in science and technology or special expertise relevant to employment in Thailand
• The minimum income requirement is waived if the individual is applying to work in government-run institutes of higher learning, research centres, specialised training centres or government agencies
• The skill of the professional must correspond to one of the targeted industries of the Thai government
• The applicant must have at least 5 years of experience in his or her relevant field or have a PhD in the relevant field or work for a Thai government agency

Key benefit of Highly Skilled Professionals with the Long Term Resident Visa:

These individuals are entitled to a discounted personal income tax rate of 17%. In comparison, Thailand’s regular personal income tax rates range from 5% to 35%.

SMART Visa

This visa program was launched on the 1st of February 2018. This provides individuals with a proper road map to secure a visa through either employment, investment or starting a business in certain targeted industries in Thailand.

The targeted industries are:

1. Automotive
2. Electronic
3. Affluent Tourism
4. Agriculture, food and biotechnology
5. Automation and robotics
6. Transportation and logistics
7. Petrochemical and chemical
8. Digital technologies
9. Medical
10. National Defense
11. Direct and significant supporting industries for the circular economy
12. Aviation, aerospace and space
13. Human resource development in science and technology
14. Environment management and renewable energy
15. Management of Technological Innovation and Startup Ecosystem
16. Targeted technological development
17. International Business Center (IBC)
18. Alternative dispute resolution

The SMART Visa has the following benefits and features:

1. The individual can reside in Thailand for up to 4 years
2. Yearly reporting to the Thai immigration office instead of the usual 90-day reporting as with other visas
3. The ability to bring family members into Thailand on a non-immigration visa
4. The ability to work in any of the targeted industries without a work permit
5. The SMART Visa is a multi-entry visa. There is no need to apply for a re-entry permit to go out and re-enter Thailand.

As the requirements of the SMART visa are complex, I would advise potential applicants to refer to the Board of Investment, Thailand’s website on the SMART visa. This is the website: https://smart-visa.boi.go.th/smart/.

The main benefit, among others, in my opinion, is the yearly reporting instead of the usual 90-day reporting as with other visas. This particular visa is not as popular as it was expected to be.

Destination Thailand Visa

This visa will be implemented in June 2024. However, as of the time of writing, this visa has yet to be implemented. I will update this article when the Thai government is issuing this visa.

Many articles call the Destination Thailand Visa the Digital Nomad Visa. However, the actual name of the visa is Destination Thailand Visa. The reason this visa is called the Digital Nomad Visa is because the visa allows its holder to legally work remotely for international companies and clients while in Thailand.

How to qualify for the Destination Thailand Visa

• Be at least 20 years old
• Provide documentary proof that the individual has at least THB 500,000 in his or her bank account
• Provide documentary proof that he or she is employed (alternatively, the individual may apply for the Destination Thailand Visa to do one of the approved activities)

Approved activities:

• Muay Thai lessons
• Thai cuisine lessons
• Educational purposes
• Attend seminars
• Sports
• Medical treatment
• Foreign talent
• Art and music-related events

The Destination Thailand Visa has the following benefits and features:

1. The visa can be extended once for up to 180 days. The visa application fee is THB 10,000
2. The visa allows its holder to legally work remotely while in Thailand for international companies and clients
3. The visa holder can bring along his or her spouse and any children below the age of 20
4. The visa is available to 93 foreign nationalities

Please note that if the visa holder wishes to change to another visa, his or her Destination Thailand Visa will be cancelled. Moreover, while the visa holder can legally work remotely while in Thailand, he or she cannot work for a Thai company requiring a Thai work permit.

Conclusion

The more popular visas are the retirement visa, the Thailand Elite Visa and the Long Term Resident Visa. I believe that the Destination Thailand Visa will be very popular due to it allowing the visa holder to legally work in Thailand.

If you are looking for advice on how to relocate to Thailand, please consult an experienced immigration company that deals with Thai visa applications.

Yours sincerely,

Daryl

p.s. At the time of writing, I own and manage a real estate company in Thailand that specialises in dealing with Bangkok properties. My Thai company also deals with visa applications for individuals who are looking to relocate to Thailand. I also maintain a web portal InvestBangkokProperty.com where we list the various new project launches in Bangkok. The purpose of this blog article is to try to provide a comprehensive overview of the various visa options available to foreigners.

The post An overview of the various Thailand visas available to foreigners (June 2024 update) appeared first on Daryl Lum's Blog.

The push factors for the major buyers of Thai property

There is a lot of motivation for the major buyers of Thai property to leave their home country. The Chinese economy is growing increasingly isolated. It will get increasingly difficult for the Chinese to bring money out of China to purchase properties. This is one of the main reasons why the Chinese are trying their best to make their purchases now. It is also one of the reasons why there are properties where buyers are unable to complete the transaction. The bulk of these are Chinese buyers. They are unable to make the final payment when the condominium is completed. This is because they are not able to bring their money out of China to make the final payment.

Russian buyers are moving to Thailand because of the war in Ukraine. Thailand is one of the few countries in the region that are welcoming of Russian tourists. While this is a pull factor, I will elaborate on it a little here. Russian citizens have access to visa-free entry to Thailand. They are allowed to stay in Thailand for up to 90 days. Places like Phuket and Pattaya are the choice destinations when Russians purchase Thai property. Although there is still a very strong demand from Russian buyers for Bangkok properties. However, the Chinese still outnumber the Russians easily.

Taiwanese buyers are also increasingly getting more prominent. The main reason for a Taiwanese to look outside of Taiwan would be the political situation in Taiwan. The political situation in Taiwan would dictate its relations with Mainland China and that would affect investors’ outlook on the Taiwanese economy. There is always a threat of impending conflict with the mainland if the ruling political party in Taiwan is not a party that the mainland can tolerate. Taiwanese who can afford to will always be on the lookout for properties outside of Taiwan as an alternative if ever there is a conflict. Even if there is not one currently, there is always the possibility of there being one in the future. The wars in Ukraine and Gaza have shown how it is highly unlikely that the major powers will not come to the aid of smaller countries. Most Taiwanese buyers of Bangkok properties are looking for properties in Bangkok as an alternative if either Taiwan enters into a conflict with the mainland or if the Taiwanese economy becomes too lacklustre that it would be untenable for those in business to remain in Taiwan.

The pull factors

While the push factors are the factors that are getting people to leave their home country, the pull factors are the reasons why Thailand, namely Bangkok, is an attractive destination to purchase a foreign property.

For starters, foreigners can obtain a clean title to a Thai property. This means that there is no need to set up complicated trust structures whereby a local would hold the title for the foreigner who is the ultimate beneficial owner. This is not the case for properties that foreigners purchase in neighbouring countries like Indonesia and Vietnam.

Next, the Thai economy is an extremely open one. Thailand has 14 free trade agreements (FTAs) with 18 countries. As a point of reference, Singapore, being the most open economy in South East Asia has 15 bilateral and 12 regional FTAs. Bangkok has an abundance of grade-A office space which is important in attracting large multi-national corporations to set up headquarters in Bangkok.

The Bangkok transit system is also extremely well-developed. The recent expansion of the Bangkok mass transit system is significant. The commonly used green Sukhumvit BTS train lines were expanded to include new stations at both ends. There are also new train lines that improved connectivity extensively. For example, the new Red Line connects the Don Meung airport to the rest of Bangkok while the Yellow Line shortens the journey from the north of Bangkok to the Hua Mak area (which is closer to Suvarnabhumi Airport). Before, the only transfer points would be at Siam or Asoke and that creates huge congestion. However, these new train lines have alleviated these issues greatly.

Comparatively, the Thai banking system is very developed. Thai banks are open to financing businesses. International fund transfers are not difficult. That being said, Thai banks do not finance foreign purchases of Thai property. This is because of certain foreign exchange regulations (I had touched on this in earlier articles). Foreign purchasers of Thai properties will have to seek financing from banks outside of Thailand.

The anticipated tourism rebound in Thailand

Thai tourism has yet to recover to pre-pandemic levels. In 2019, a record 39.8 million tourists visited Thailand. The numbers in 2023 were still below 30 million. However, the Thai government has been very proactive in trying to woo tourists from two very large economies and nations, China and Russia. Their target is to have 80 million tourists by 2027. Both Chinese and Russian tourists enjoy visa-free travel to Thailand. The full effects of these policies will not be known until we receive a full report of the numbers at the end of 2024. However, this, coupled with a weak Thai Baht, bodes well for Thai tourism numbers moving forward. Traditionally, tourism revenue accounted for more than 10% of Thailand’s Gross Domestic Product (GDP). If this target is reached in 2027, it would likely result in at least a 10% boost in Thailand’s GDP.

While Thailand has always tried to place less reliance on tourism as a contributor to GDP, for the near to mid-term, I believe there is no way they can pivot away from the fact that they are extremely reliant on tourist dollars to boost their GDP numbers and consequently the wealth of the nation.

The state of the Thai economy

Thailand’s GDP numbers have been very poor since the pandemic. In 2020, the Thai economy contracted by 6.1 per cent. The subsequent 3 years saw the Thai economy expand by 1.5, 2.6 and 1.9 per cent. This in effect means that the Thai economy has yet to recover to levels before the pandemic. There is a very telling reason for this. The Chinese were a major contributor to the Thai economy. Not just in tourism dollars but in direct foreign investment. Now that the Chinese economy is facing strong headwinds, the Chinese are not contributing to the Thai economy as they did before the pandemic. It is very difficult to fill the gaping hole left by the Chinese. While there has been an uptick in monies flowing in from Russia, Myanmar, Malaysia, Hong Kong and Taiwan, it will never be able to match what the Chinese contributed pre-COVID. I must say that when it comes to tourism, the Thai government has not done enough to ween its economy away from its reliance on tourism. It has also done little to boost tourism dollars. It is losing out regionally to places like Singapore when it comes to hosting high-profile acts. Remember years ago when it mooted the idea of having a Formula 1 race in Thailand? That did not bear fruit. There comes a point in time when you cannot merely rely on tourists flocking to your city just because it is cheaper than their home countries.

The only solution for the Thai government is to reinvent itself to try to have other drivers of the economy. The next global trend that the Thai government should tap into would be artificial intelligence. The Thai government was savvy enough to move along with the earlier trend of electric vehicle production. The new BYD plant to manufacture EVs will open in the 3rd quarter of 2024. This plant is expected to build 150,000 EVs every year. This should add a good number of skilled jobs to the Thai economy. My take would be that if the current government can remain in power for an extended period, it can then put in place longer-term policies to drive the economy.

In conclusion, the state of the Thai property market is still uncertain. Buyers should not focus on making short-term gains because these short-term gains may not materialise. It would serve property buyers to take a longer-term view. The property that they hold in Bangkok should be one that can be rented out easily. For this, there are a host of factors to ensure that this ease of rental is present. Most notable would be the proximity to the train station. The market may remain slow for an extended period. Remember the US housing crisis in 2008 and how the US property market tanked and it was speculated that it would take an extended period to recover? It did recover in less than a decade. The Thai property market is not facing such a debt crisis but merely a slowdown due to a slowing global economy. My take is that if the property market were to remain tepid, it would be likely that it would not remain so for over 5 years with the start of the 5 years being in 2020. I based my hypothesis on past crises.

Yours sincerely,

Daryl

The post The state of the Bangkok property market in 2024 thus far appeared first on Daryl Lum's Blog.

Hey wait a minute… are the people in Hong Kong truly less savvy and well-educated? Are they less well-versed in financial instruments and investments? The last I checked I think Hong Kong’s education system is one of the best in the region. Over 80% of its population have secondary and higher education. Are the Chinese not highly educated and is Shanghai not a financial hub as well? Is the Hong Kong stock exchange not about 10 times that of Singapore’s in terms of market capitalisation? Is it actually true that the investors in Hong Kong and Mainland China are less financially savvy?

In short, it is in my personal humble opinion that the property market correction, and to a certain extent, crash, that is happening in Hong Kong and Mainland China is not because of a lack of intelligence in those markets. Instead, as much as we favour the discipline of economics to explain market cycles, we cannot belabour this with economics alone. The truth is that human behaviour, the fear of missing out, the allure of chasing future profits, the feeling of being right with the decision to go all in, all conjured to what is now a mountain of mess and debt that is Country Garden and Evergrande.

Humans are not logical creatures. Not all the time and definitely not always in times that we need to be. The feeling that the property market is undefeatable, no matter the scenario and having decades of data to back this up is difficult to explain. That was what happened. In Hong Kong, where 50-year leases are the norm, buyers were buying properties for mainly two reasons. Firstly, they did not want to be faced with higher prices in the future. Hence a purchase now would prevent them from purchasing a similar property at a higher price in future. Secondly, they saw property as a safe investments. Their view was backed up with the recent data from the past couple of decades showing that property prices have continued to increase. It was a way of not only preserving wealth but the perceived ideal manner in which wealth appreciation can take place. The mantra that was going around was to work and save up to purchase a property and then ride out the appreciation.

In my mind, if the majority of a population has the idea that property investment is the best way to riches, then that economy is in a very dangerous situation. This is because wealth creation can occur in so many situations. It can occur in inventions, in business and in investments. Let me explain.

Wealth creation in inventions

This is, in my view, the pinnacle of wealth creation. This is where someone creates a product or even a whole product class that revolutionises how we do certain things. An example of this would be the iPhone. It was a product which changed the way we used smartphones. Another example would be creating microchips. Think of companies like TSMC and Intel. They invent and reinvent products that are used in the computers, smartphones and even the vehicles which we use on a daily basis. Then think of PayPal, Venmo or even products like Impossible and beyond meat. The wealth creation here is immense. However, examples of this are few and far between.

Wealth creation in business

The most common entity would be companies. This is someone, or a group of people, coming together and creating an entity and providing goods and services. Think of someone who starts a cafe or a restaurant. Alternatively, someone who starts a company providing legal, accounting or HR related services. There is very little innovation in the product or service that is provided. However, a well run business would have a proper system and team in place. If the entity is something that can accept investments, like a  company that can issue shares to investors, then the owners of this business would avail themselves to external funding for expansion and possibly a viable exit strategy from the business should they decide to retire one day.

Wealth creation in investments

This is the most docile manner of wealth creation when compared to the previous two examples. It involves using money, preferably savings and not funded by debt, to purchase assets like stocks or property. Of course there are other options like putting monies in a saving plan, managed funds, bonds and similar form of investments. The difference is whether they are managed by money managers or self-managed. This is where property investment falls squarely into. A property investor purchases a property, and this is usually funded by debt, waits for the appreciation, sells it for a hopefully a higher price in the future. Of course he also receives rental income if he rents out the property.

My point is that property investment is not a category of wealth creation but a subset of a category of wealth creation. However, many have equated investing with merely buying property. Even worse, many have equated wealth creation with merely buying property.

So why is this a bad thing?

Well in truth it is not if the property market is a less mature one with prices still within reach of the average population. In many cases, if the enthusiasm in buying of property is high enough, this rise in property investment can persist even when prices are out of the reach of the average population. This enthusiasm is fuelled by the collective thinking that property prices will always continue to rise and that property investment is infallible. Out comes the chart of how despite ups and downs in the market, in the long run, property prices are always on an upward trend.

Something like this chart.

As you can see there are ups and downs but in the long run, prices were higher than they were before.

Let us zoom out of that graph to see what this graph represents.

In essence, when someone remarks to a savvy investor that in the long run, property prices are always increasing and are more expensive than before, the savvy investor should be able to identify that that remark is merely referring to inflation. It is inflation which makes all things more expensive over time. Property prices always increasing over time should not be the basis of why property investment is the best investment. If that were true then investing in Big Macs would be a similarly good investment. Well if you could somehow preserve the Big Macs and sell it at a later date.

If we truly want to be savvy investors, we must be aware that the pitfalls of other markets may one day be possible pitfalls of ours. We must also be aware of the first signs of possible cracks in the property market. Perhaps the developers can see something that market observers fail to take notice of because all but one submitted a public tender for the site at Marina View. Why the hesitation if the property market is evergreen? Analysts may remark that the government is looking to preserve the market value of the land in the area in its decision to reject the low bid. However, the truth of the matter is that even the Singapore government did not expect there to be a solitary low bid from IOI Property Group. This was a land in Marina View, right in the heart of Singapore’s Central Business District. There is a Greater Southern Waterfront master plan that would rejuvenate the area from Pasir Panjang up to Marina East. All these would have meant that this plot of land in Marina View should have been earmarked as a development to look out for. Instead, interest in this particular land sale petered out rather quickly.

The truth of the matter is that we have been in an eternal property market bull cycle for the better part of almost two decades. Singapore has yet to see a major recession like the one we experienced during the Asian Financial Crisis in 1997 or the SARS pandemic in 2002. Hence we have a generation of workers who were always faced with a tight job market where there were more jobs than workers. Great credit has to be given to the Singapore government for ensuring that the job market remains healthy. Hence the fearless attitude when entering the property market. More young buyers are taking on debt to enter the private property market. A 28-year-old buying a one-bedroom condominium for $1.4 million could only happen if there was great confidence in the job and property market as well as a safety net in her parents if she could not afford the instalments.  However, we must recognise that the property markets that were once seemingly infallible are indeed falling. Perhaps the key would be humility. To recognise that investors in the Singapore property market are no more intelligent and financially savvy than the ones in Hong Kong and China.

Singapore’s property market cannot be infallible. Nothing is.

2024 should be a slow year for property. It should be and it would be healthy for all of us to take a breather. It has been some bull run. It would be ideal to not have a correction in the size of what is happening in the Hong Kong and Chinese property market. All we need is some common sense from everyone.

Yours sincerely,

Daryl

The post Why a soft landing for property prices in Singapore may be an ideal situation appeared first on Daryl Lum's Blog.

Speculation is difficult to define. However, I believe that the definition can be broken down into a few parts:

1. Speculation is when one purchases something with the intention of selling it for a higher price in the future; and
2. The purchase is largely premised on the belief that the market will continue in an uptrend; and
3. The purchase is largely premised on the purpose of selling it for a higher price in the future.

“largely premised” means that the individual’s main consideration is on that particular fact. There may be other factors that may drive the purchase but if this particular fact is not present, it is highly unlikely that the individual will make that purchase.

An example would be an individual buying a property with the main consideration that he will be able to sell it for a higher price in the future. He may be buying the property as a home for his family and there may be other considerations like facing and layout. However, if the property does not have his desired facing and layout but he believes that he will be able to sell it for a higher price in the future, it will still be considered. On the flip side, if the property has his desired facing and layout but he believes that he will not be able to sell it for a higher price in the future, he will not consider it.

“In the future” would mean any time ahead of the present. It could be that the individual purchases the option and resells it for a profit within a very short period of time. Probably within a few weeks or possibly months. It could also be an individual who sells the property after a number of years. It could be someone who sells it after 20 years. The shorter the period, the higher the inference of speculative intent.

My take is that property investment has somewhat shifted to that of property speculation. The truth of the matter is that this is something that very few individuals are unwilling to admit. The fact that an individual walks into a show flat or a property on sale with the intention of figuring out whether he is able to dispose of the property at a later date at a higher price supports the inference that he is a property speculator. Property, in its intrinsic form, is shelter. As we progressed as a society, we started to demand that the property that we lived in suited our lifestyle. The typical property buyer in the past would be looking for a property that suited his lifestyle. A typical nuclear family would probably consist of a husband, a wife and two children. Hence the demand for a 3 bedroom apartment. If they had a helper, then they might request for a helper’s room which typically would be tucked away behind the kitchen. In Singapore, there were condominiums with two entrances. There was a main entrance and another entrance that led directly to the kitchen or wash area. This was to accommodate situations where groceries needed to be carried to the kitchen area. Today, the main draw of a development would be its location and the catchment area. Can it be rented out and can it be sold for a profit later? Walk into any sales gallery, not only in Singapore but in any city where property prices have appreciated substantially in the last decade and you will see more information about the growth potential of the development on show rather than focusing on how the unit can suit the lifestyle of the people who are going to live in it.

The typical Chinese buyer is the perfect epitome of a property buyer with great regard for the appreciation potential of the property rather than one that focuses on the property being a shelter for his family. It does not help that China is a very vast country and travelling to view properties in and around the country is not a very convenient thing. Hence there were many Chinese who bought the property without actually even travelling to visit the actual site of the proposed development. It does not matter whether you are  A typical property brochure is never the same as how the property is when it is completed. The fact is, property, especially if that is one’s only property, is a place of shelter first and perhaps a form of investment second.

So then what went wrong? The news would want you to believe that it was because the Chinese government imposed borrowing restrictions and limited the flow of credit through the property market. The truth is that this is what a responsible government would be doing. For the better part of the last two decades, Chinese property buyers have been profiting from buying and selling properties. While many Chinese property buyers would like to say that they made calculated investment decisions which resulted in them making a profit, the truth is that the exuberance in the market is the primary and perhaps arguably the sole reason why their properties turned a profit. My take has always been that while I agree real estate has intrinsic value because it is a physical asset, I do not agree that it is always a stable investment. The people who are looking to get buyers to buy are always going to reiterate the mantra that real estate is a safe investment and that in the long run, it will turn a profit.

It does not help that valuations are based off recent transaction prices. This means that valuations move in tandem with speculation. If the property market is booming, valuations support this boom. The problem is that buyers equate valuation with intrinsic value. They are not the same.

Imagine a formula like this:

Intrinsic value + Premium = Selling Price

So what is Intrinsic Value?

It is the actual value of the property if all the participants in the market are rational. A rational market participant is one who does not succumb to the fear of missing out syndrome and understands that a property is an illiquid asset which takes time and cost to dispose of and maintain. He is also one who does not believe that property investment is the best form of investment but instead believes that property investment should form a portion of an otherwise balanced investment portfolio which consists of other assets.

Now what is Premium?

It is the price that market participants are willing to pay above the intrinsic value. What commands the premium? The level of speculative intent, the level of rational market participants. In fact, it is a correlated relationship. The higher the level of speculative intent, the higher the premium and vice versa.

Think about the Chinese property market, its actual intrinsic value and the premium. Market participants in the Chinese property market were almost all speculators. It was always a fear of missing out that drove buyers to show flats. As the speculative intent was high, the premium was similarly high. As the intent got higher, the premium similarly got higher. Add those two together and you can see that you will get a very high selling price. That drove it to where it is today.

Only in a market crash will buyers then start to rationalise. Those who are burned will start to exit the market. The ones who are rational and less speculative will eventually enter. The intrinsic value will always remain the same. However, the low level of speculative intent in the market dictates a similarly low level of premium. Hence the selling price for the same property will become lower.

Are there lessons to be learned from the Chinese property boom and bust?

Well, yes. The Chinese are not an unintelligent group of people. In fact, the Chinese very bright people. The truth is, it is never always about intelligence alone. Human emotions and greed permeate every corner of the globe. It weeds out rational thinking and sensibleness. This is why boom and bust cycles exist. Despite governments around the world trying to prevent the next market crash, the fact of the matter is that they will still happen. So the next time you walk into the show flat, perhaps it would be wise to think, how high is the speculative intent and what is the premium that is being added on top of the intrinsic value.

Hey, I am no Ray Dalio or Warren Buffet. However, I do enjoy directing human behaviour in relation to the property market to try to make sense of what is going on.

Yours sincerely,

Daryl Lum

The post The Chinese property boom and bust. A cautionary tale. appeared first on Daryl Lum's Blog.