Please enter your username and password here:Forgot Password?
Please enter your details here:or Login
Thailand has a modern financial system where a wide range of investments is available, both for residents and non-residents.
For expats in Thailand, there is usually the choice of repatriating their income to their home country, or to keep it in Thailand. If the latter option is chosen, it’s best to have some Thai Baht investments.
Beating inflation and taxes
As in any country, expats should be concerned with beating inflation and taxes to preserve the value of their savings.
If your investments are offshore, there is generally no tax to pay in Thailand unless you remit your investment income into Thailand in the same year. If your investments qualify as Thai-source income, they will be subject to Thai personal income tax. Capital gains are exempt if they are made on a local stock market. See Investment Taxation for Expats in Thailand.
Inflation in Thailand - overview
Inflation in Thailand is subject to central bank monitoring, with an inflation target of 0.5 to 3%. In practice, this means that inflation is more likely to stay close to 3% over the long run.
For more information on monetary policy, see Foreign Exchange for Expats in Thailand.
Savings accounts and term deposits
As far as savings accounts are concerned, interest rates start from around 0.5%. If you are happy to keep your savings locked for some time, you might wish to apply for a term deposit. In Thailand, the yield on term deposits can get up to around 3%.
In other words, you must invest in riskier assets if you want to preserve the value of your savings.
Investment in Thai securities
There are little restrictions on foreigners willing to buy Thai securities, even non-residents. To the extent that foreign ownership of Thai companies is limited to 49% (25% for banks), the Stock Exchange of Thailand (SET) has issued Non-Voting Depositary Receipts (NVDR) to circumvent the foreign ownership restrictions. In effect, an NVDR is different from a share in that it does not confer voting rights.
If you are looking for a broker in Thailand, you can:
The services available may vary greatly depending on the financial intermediary. For some, you can only trade shares or mutual funds. For others, you can only trade debentures. Ideally, you should get to a well-established broker.
Investment can be done through mutual funds. In Thailand, tax relief is available on your long-term investments in mutual funds up to the lower of:
To qualify for tax relief, you must be treated as resident in Thailand for tax purposes and hold your investments for at least five calendar years. Not all mutual funds are eligible for tax relief. Consequently, you might wish to check if the tax relief is mentioned in the fund information sheet.
Financially speaking, the problem with mutual funds is that they are subject to higher fees than direct investments on the stock market.
Thai securities (costs)
Do consider carefully the applicable transaction costs if you wish to trade Thai securities. Trading online may be cost-effective.
Here are the main costs you should be aware of:
Thai securities (overview)
The main stock index in Thailand is the SET Index. It has roughly trebled since the October 2008 trough, and it is now back at its peak of before the 1997 Asian crisis. Fundamentally, much of the recent price rises can be justified by inflation, economic growth, and reduced interest rates.
Dividend yields are currently between 3 and 5% for high-dividend shares, with a potential for capital gains (or losses). As far as fixed-income securities are concerned, a 10-year Government bond would get you a low-risk return of 3.5%.
You are responsible for deciding how much risk you want to take on. There is no set answer to this question, as this largely depends on your personal circumstances. A qualified wealth manager may assist you regarding this matter.
Be wary of volatility when you invest in securities. Volatility is also highly dependent on fundamentals, especially the underlying risk. However, higher risk normally means higher reward, and some securities may be low-risk. Additionally, stock market variations are very dependent on interest rate variations or expectations. The central bank interest rate in Thailand is currently at 2%, which is low but still well above zero.
On the stock market, your emotions are your enemy. You must control them rather than let them control you. Do not, under any circumstances, let (natural) psychological factors make you take irrational decisions.
Sections in FINANCIAL CONSIDERATIONS IN THAILAND:
» Money Transfers for Expats in Thailand
» Foreign Exchange for Expats in Thailand
» Banking for Expats in Thailand
» Pensions for Expats in Thailand
» Investment for Expats in Thailand
» Wealth Management for Expats in Thailand
» Property Investment for Expats in Thailand
» Insurance for Expats in Thailand
We value input from our readers. If you spot an error on this page or have any suggestions, please let us know.
If you are considering moving to Thailand or are soon to depart, you can find helpful information and advice in the Expat Briefing dedicated Thailand section including; details of immigration and visas, Thai forums, Thai event listings and service providers in Thailand.
From your safety to shopping, living in Thailand can yield great benefits as well as occasional drawbacks. Find your feet and stay abreast of the latest developments affecting expats in Thailand with relevant news and up-to-date information.
Working in Thailand can be rewarding as well as stressful, if you don't plan ahead and fulfill any legal requirements. Find out about visas and passports, owning and operating a company in Thailand, and general Thai culture of the labour market.
About | Useful Links | Global Media Partners | Media | Advertising And Sales | Banners And Widgets | Glossary | RSS | Privacy & Cookies | Terms And Conditions | Editorial Policy | Refer To A Friend | Newsletters | Contact | Site Map
Important Notice: Wolters Kluwer TAA Limited has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments. © Wolters Kluwer TAA Ltd 2017. All rights reserved.
The Expat Briefing brand is owned and operated by Wolters Kluwer TAA Limited.