Thailand as a perfect base location for a tax-free life

Thailand is not only attractive for tourists looking for good weather, white sandy beaches and delicious Thai food. For those who want to live there and enjoy a tax-free life, Thailand also offers all the advantages of a tax haven without being considered as such, i.e. it is not on the blacklists of other countries.

Today we want to explain you the different options you have to live in Thailand without paying taxes, as well as how we can help you with the paperwork and everything you may need in Thailand.

We have already reported on the Thail Elite Visa in another blog post. This programme allows you to spend as much time as you want in Thailand and rewards you with special services, such as a limousine service for airport transfers, a Fast-Track programme that allows you to pass through security and passport control in a few minutes, a premium annual medical check-up (only with the Elite Ultimate Privilege) and a premium government service that takes care of extending your visa, among many other advantages. A truly elite programme.

The cost of the programme starts at around THB 600,000 (currently around USD 17,100) for a Thai visa (Elite Easy Access) valid for five years. The most expensive Thai Elite Visa available (Elite Ultimate Privilege) costs THB 2,000,000 at the time of application (about USD 57,090), has an annual fee of THB 20,000 (about USD 570), and is valid for 20 years. We can also help you with this visa, but throughout this article, we will show you some other residency options.

Elite passport control in Thailand

Visas available in Thailand

In addition to the Thai Elite Program, which guarantees unrestricted entry and exit from the country, there are also other ways to live in Thailand for a long period of time. Not all visas are equally easy to obtain, and sometimes require a high investment. However, some of the requirements can be completely circumvented with our help. You will find that the supposedly more complicated requirements are actually not that complicated.

The most important visas in Thailand are the Education Visa, the Retiree Visa (type “O” visa) and, from the end of 2022, the new Long Term Residency Visa.

Education visa

A very popular and easy to obtain visa is – or rather was – the so-called Education Visa (ED Visa). I say was because the government suspended this visa until further notice at the end of 2022 due to over-application. Whether or not the visa will be available again is, of course, unknown, but we assume that this is only a short-term interruption and that this programme will be offered again in the future.

The aim of this visa is, of course, to attract students from all over the world to Thailand. However, it is quite possible that stricter requirements will apply than before and that you will actually have to prove that you are “studying”, unlike before.

They call it a “student visa” because it is exclusively for students, but the definition of “studying” is not as precise as you may think. With the visa you can “study” almost anything, be it Thai language, Thai cuisine or whatever it is you want to “learn”. Moreover, you do not have to study at a university – any kind of educational institution is accepted here, including schools. In addition, there is no age limit for applying for a student visa. Anyone over the age of 12 can apply and study in the country. All this is, of course, what has made this visa so famous. Last but not least, the visa is extremely cheap: a single visa costs only THB 2000 (about USD 57).

If you and your family plan to stay in Thailand for a longer period, the student visa may be just what you need, as each parent can include a child under the age of 14 in their application. Thus, a family with two children only needs two visas to stay here. On the other hand, children under the age of 14 do not need a visa in Thailand.

The maximum length of stay in this case is 15 months in total, which includes the 12-month “school cycle” and the first 3 months of stay in Thailand.

You must be thinking: “but I do not want to study anything… I just want to live in Thailand”. Even in that case, the student visa may be the right option for you (again, when it becomes available again): although the requirements say that you have to enrol in a course or university, the reality is quite different.

Normally, you will have to attend a course for about eight to ten hours a week and prove it, but with our help you will be able to avoid this requirement without any problem: you will be enrolled in the course, yes, but you will not have to attend it. At least in recent years this has been the case, so let us see how the rules apply after the reinstatement of this visa.

All you have to do to maintain your student visa is to visit the Immigration Office every 90 days to prove your “physical presence” in Thailand. In addition, as the student visa is only valid for one year (15 months), you will have to apply for a new visa after this period. If you want to leave Thailand within 15 months, you will also need a re-entry visa (you can apply for this before you leave the country).

Students in Thailand

Pensioner visa

The easiest visa to obtain in Thailand by far is the pensioner visa. The requirements are very low if you are over 50.

All you need is to have a local Thai bank account and deposit THB 800,000 (about USD 22,800) into it. Once you have done this, you will not be able to withdraw money from this account for 3 months (although officially you can withdraw a maximum of 50%, it is better not to touch it at all), and you will have to repeat this deposit after 12 months (or when you renew your visa).

In addition, you must have a minimum monthly income of THB 65,000 (about USD 1850) to apply for this visa.

These requirements are relatively easy to meet without any “tricks” and with little money. However, even with this visa there are grey areas and back doors that you could use to circumvent the requirements. With our help, you can completely skip the deposit, so you would only have to pay the fees for the visa itself: THB 2000 for a single entry visa, THB 5000 for a multiple entry visa or THB 10,000 for a 5-year multiple entry visa.

Living as a pensioner in Thailand also has a small disadvantage, but with the right advice and organisation you can get around this without a problem. The Thai tax system follows the so-called territorial taxation, which means that any income you earn outside Thailand is completely exempt from taxation in Thailand. The only drawback in Thailand is that, despite territorial taxation, you have to pay tax on income transferred to Thailand in the same year in which you earn it.

This is indeed a problem for pensioners, because the pension is transferred to a specific account each month. This can be solved by having two bank accounts: a bank account in Thailand (which you would use for your expenses in Thailand) and one account outside Thailand (to which your pension would be transferred). In practice, this means that you only transfer to your Thai account the money that was paid into your other foreign account in the previous year. Therefore, on 1 January you would transfer the entire pension of the previous year, live with it for the whole year and have to wait until 1 January of the following year to transfer the pension back to your Thai account (if this is possible with your pension fund).

Please note, however, that you are not allowed to work in Thailand on a pensioner visa. You will have to finance your livelihood exclusively from your savings and your pension.

Please contact us if you would like to enjoy your retirement in Thailand.

Would you like to enjoy your pension in such a destination?

Long Term Residency Visa

In September 2022, the Thai government introduced a new Long Term Residency Visa (LTRV), specifically aimed at executives and wealthy/employed/retired people. The visa has very high requirements and is certainly not available to everyone. However, it is worth mentioning, as it offers many advantages if you meet its demanding requirements.

Each group of people eligible for the visa has different requirements to meet. For example, if you are a global citizen with high purchasing power and want to enjoy your life in Thailand (among other places), you must prove you have at least USD 1 million in assets, have an income of more than USD 80,000 in the last two years, invest USD 500,000 in Thai bonds or real estate, and also have health insurance that covers you for up to USD 50,000 or deposit USD 100,000 in a bank account. Thailand calls this group the “Wealthy Global Citizens”, a very logical name considering the very high investments they have to make to earn the title.

If you are a wealthy pensioner, you must be at least 50 years old and have an income/pension of USD 80,000 per year. If you are below this figure, but above USD 40,000, you will have to invest USD 250,000 in Thai bonds, companies or real estate. The health insurance or deposit for this case is the same as for the Wealthy Global Citizen.

The concept of Work-from-anywhere has been known worldwide since COVID. Thailand is no exception and allows people to work from Thailand under certain conditions. This group of people is also among the candidates for a long-term residence visa.

The requirements are not as high as for a Wealthy Global Citizen, but still not feasible for everyone. If you are an employee of a publicly traded company or a private company that has been in business for at least 3 years and generates more than USD 150 million in revenue, you will have passed the first hurdle. If your company pays you a salary of USD 80,000 per year, you will have cleared the second hurdle. Finally, if you have worked in your current field for more than 5 years in the last ten years of employment, you are ready to apply.

Unfortunately, if you earn less than USD 80,000 but more than USD 40,000, you will need to have a Master’s degree or own real estate to make the cut.

The final group eligible for this visa is Highly skilled professionals. You must work in one of Thailand’s targeted industries. Again, you must have an income of USD 80,000 or more than USD 40,000 and a master’s degree or property ownership. If you work for a Thai government agency, you do not need a specific income.

If you are in one of these groups and hold a long-term residence visa, you will enjoy some advantages that no other visa can offer. The first and most important has to do with taxes. As with all other visa types, all foreign income is exempt from taxation (territorial taxation). Your income earned in Thailand is taxed at a flat rate of 17% (instead of the progressive rate of 35%). Normally four Thai employees must be employed for each foreign employee, but if you hold a long-term residence visa and work for a company, this rule would not apply. This is a great advantage, though perhaps more for your company than for yourself.

All visas in Thailand require you to report to the Thai immigration authorities after 90 days. With the long-stay visa, this period is extended from 90 to 365 days. Quite a relief, right? Plus, the visa is automatically multi-entry, so you will not have to apply for an additional visa if you want to leave the country.

Of course, a document with as many advantages as the long-stay residence visa also has some disadvantages: The processing time is about two to three months and the cost is quite prohibitive. On top of the already high investment required, you will have to add about USD 1,300 per person in fees.

Working in Thailand has some advantages

Opportunities for your business in Thailand

Setting up a business in Thailand is no more complicated than applying for a visa. The only requirement is that a maximum of 49% of the company can be owned by foreign (non-Thai) persons. However, with our help, you can turn that 49% into 100% and thus ensure that the company is completely run by you.

Generally, Thai companies do not pay tax on profits below THB 300,000. From this figure up to THB 3,000,000, you pay 15%, and 20% for profits above this figure. However, there are numerous exemptions and discounts for certain sectors if you wish to set up a local business. Anyway, we would normally recommend that any online entrepreneur combine Thai residency with a much less complicated foreign company: Thailand works perfectly with the US LLC.

The minimum start-up capital is THB 1,000,000 (about USD 28,500) if the company has no foreign founder, or THB 2,000,000 (about USD 57,000) if one of the founders is not Thai. To incorporate the company, there must be a minimum of three shareholders in the company.

Cannabis in Thailand

Since 2022, a new business has been thriving in Thailand: cannabis. Coffee shops and restaurants that use cannabis as a product itself or as an ingredient in their products are proliferating.

The rules for cannabis consumption are not really clearly defined and tourists often fall into certain traps.

In any case, if you would like to set up a business in this sector, it is perfectly possible to do so in Thailand.

For private consumption, you must be at least 20 years old to legally consume cannabis. In addition, consumption is only allowed in licensed cafes or bars. If you are caught smoking or consuming products containing cannabis in public, you could face a fine of 25,000 THB and up to 3 months in jail.

Cannabis consumption is allowed in Thailand

Taxation in Thailand

As mentioned above, Thailand applies the principle of territoriality when it comes to taxation. As in the case of pensioners (explained above), entrepreneurs should also avoid transferring profits to a Thai account in the same year in which they are made. This is mostly a precaution.

In Thailand, it is possible to live permanently tax-free with a certain amount of existing savings from previous years. However, this is only relevant if you actually activate a tax residence in Thailand, which is only the case if you spend at least 183 days a year there. If your stay in Thailand is less than half a year, you will not have to worry about possible taxes on transfers of your profits to Thailand.

Note that Thailand’s double taxation agreements require you to become a tax resident if you want to be able to use them.

Thailand, unlike many other tax havens, has quite a few double taxation agreements, so it can also be a very interesting alternative for stock market investors with high dividend income. Withholding taxes can be reduced with almost all highest taxed countries. There is also a double taxation agreement with the USA which reduces the withholding tax on dividends to 15%. The only important thing in this case is that you are in the country for at least 183 days a year and that you can obtain a tax certificate (requires the appropriate visa).

If you are taxed on domestic income, there is a progressive rate of up to 35%.

The following tax rates apply:

• Up to THB 300,000: 5%.
• Up to THB 500 000: 10%
• Up to THB 750,000: 15%
• Up to THB 1,000,000: 20%
• Up to THB 2,000,000: 25%
• Up to THB 5,000,000: 30%
• From THB 5,000,001 and above: 35%.

If you do not have a business, you are not obliged to file a tax return, but if you do, you can benefit from tax reductions: 40% of your income (maximum THB 60,000) and THB 30,000 per person if you are married. If you have children, you can get an additional THB 15,000 per child in the form of tax relief.

Other information about Thailand

In general, it is not possible to open a bank account if you only hold a tourist visa. However, with our help you may be able to do so. We have a team on site who can open a bank account for you even without a permanent residence permit. The Thai Bat has been a relatively strong currency in recent years and local banks are well funded. Unfortunately, Thailand has joined the Automatic Exchange of Information, and will implement it from 2024 – but, of course, only if a foreign address is verified on the account.

If you want to start a business and hire employees in Thailand, the minimum wage is about €10 per day + 10% social security contributions (5% employee and 5% employer). However, as mentioned above, it is generally much better to combine a US LLC with the advantages of residing in Thailand.

How we can help you

As you may have read, Staatenlos can help you with all kinds of matters in Thailand. Not only do we take care of visa applications and company incorporation, but we also use our expertise to eliminate certain requirements you may have as an individual. Our French-speaking team at Libredetat.com lives permanently in Thailand and can take care of everything from there. Just let us know and we will put you in touch with them (assistance in English).

We can arrange work permits and bank accounts, as well as driving licences or notarial matters. We are very well located, know the local conditions and have the right contact persons on our side.

If you want to rent or buy a flat, we can also help you do so.

Contact us and we will find the perfect solution to make your Thai dream come true.

If you are still not sure what your best option is or if you want us to help you apply the Flags Theory to your situation and get the most out of your life, you can book a consultation here.