Thailand’s new 10-year visa scheme to lure up to 1 million wealthy foreigners

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Thailand on Thursday (Sep 1) started accepting applicants for its new Long Term Resident (LTR) visa scheme which hopes to attract 1 million wealthy or highly-skilled foreigners over the next 5 years and generate some 800 billion baht (S$30.5 billion) in new investments in the country.

Work on the scheme started in early 2021 under the helmsmanship of Chayotid Kridakon, a former head of JP Morgan Securities (Thailand) who quit his job to become an advisor to the government on how to promote foreign investment in value-added industries - deemed the country's exit from the middle-income trap.

"This initiative is an important step for Thailand's future success," Chayotid said of the scheme.

One of the first things he discovered in the course of trying to make the future Thailand a more attractive destination for wealthy foreigners and highly skilled professionals was that the biggest obstacle he faced was in the government's onerous immigration and work permit regulations.

The LTR visa, which is valid for 10 years and is renewable, was designed to address these hurdles.

"Going forward, it will be easier than ever before for foreigners to come and live and work in Thailand," he said. "We have a five-year target to attract one million foreigners to apply for the LTR visa."

Observers, however, say that target is quite ambitious. Applications will be handled by the Board of Investment (BOI), the state agency that already handles FDI applications in promoted industries. BOI - which is also tasked with attracting FDI to Thailand's 13 S-Curve industries - in 2018 launched its own "Smart Visa" scheme designed to attract high-tech talent to Thailand with a variety of tax and other benefits.

Since it's launch, the Smart Visa program has attracted an underwhelming 1,200 applicants. While the Smart Visa was aimed at high-tech professionals (of which there is a shortage in Thailand), the LTR visa targets four different categories of potential long-term residents, comprising wealthy global citizens, wealthy pensioners, work-from-Thailand professionals and highly-skilled professionals.

Unlike Thailand's "retirement visa" which has attracted some 35,846 foreign retirees, the wealthier set who would qualify for the LTR visa are permitted to seek employment in Thailand if they wish to. Those who seek employment will enjoy an income tax ceiling of 17 per cent.

"An interesting thing about the LTR visa is that the right to work is automatic," said Duangjai Asawachintachit, Secretary-General of the BOI. "If you get the LTR visa, you can apply for a work permit."

Another benefit is that businessmen who qualify for the LTR visa can skirt the Ministry of Labour's regulation than any company registered in Thailand must have a Thai to foreign labour ratio of 4-to-1. This law has been a drawback for startups in Thailand given the scarcity of local talent, which might explain why there are so few successful startups.

"That is a big step because it will help companies hiring a skilled workforce and provides access to foreign talent," said Duangjai.

Thailand is facing a lot of regional competition in the pursuit of global talent. Singapore recently announced a new One Pass scheme to attract top talent from overseas, with one of the requirements being a minimum monthly salary of S$30,000. Indonesia is reportedly considering offering a five-year "digital nomad" visa to startup entrepreneurs.

In terms of wealthy retirees, several Southeast Asian countries already offer similar lures under "Second home" visas including Cambodia and Malaysia.

But the biggest challenge to the LTR visa scheme is likely to come from Thailand's officialdom, which is traditionally loathe to relinquish controls over foreign residents, or their own for that matter, observers said.

"We still need to wait and see how they implement it," said Stanley Kang, a former chairman of the Joint Foreign Chambers of Commerce Thailand. "A lot of Thai officials are still concerned with national security. I always tell the Thai government that they should create a more open society, to attract good foreigners and with digital transformation it is easier to manage the security issues."

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