THAILAND

Name of country

THAILAND

Region

Southeastern Asia, bordering the Andaman Sea and the Gulf of Thailand, southeast of Burma

Population

69,480,520 (July 2021 est.)

General Introduction

Thailand is a popular Southeast Asian tourist destination. The country has a low cost of living while maintaining a high standard of living. Its attractions include magnificent ancient ruins, scuba diving sites, tropical islands, an exciting nightlife, palaces, Buddhist temples, and several UNESCO World Heritage Sites.

Economy

Thailand continues to be one of the central hubs in the Association of Southeast Asian Nation (ASEAN) for attracting foreign direct investment (FDI), due to its advantages for foreign investors seeking to do business in Asia. It provides an attractive business and economic environment and government incentives, which have greatly contributed to the development of private sectors in creating and maintaining Thailand’s economic growth and prosperity along with its technological development.

The Government of Thailand has taken a supportive and positive position in promoting and welcoming foreign investment. Thailand’s Board of Investment (BOI) offers both tax and non-tax incentives, which aim to promote the development of certain target industries, and most key business sectors of the economy are open to foreign investors.

Thailand therefore continues to improve its attractiveness for FDI through many government initiatives which seek to make the country more accessible to those seeking to expand their presence in Asia while at the same time reducing the amount of red tape required for beginning or expanding business activities.

Dominant Industries

Manufacturing represents a significant portion of Thailand’s GDP, with electronics, cars and automotive components, and agricultural commodities and food products representing some of the largest industries. The service sector and agricultural sector are also important employers in Thailand.

Population and Language

As of 2021, the population of Thailand is just under 70 million, which includes a wide range of people from many ethnicities such as Chinese, Malays, Cambodians, Vietnamese, Indians and others. The official language in Thailand is Thai while English is also a common language and is widely used in business, particularly in Bangkok, Chonburi, Phuket and other major cities.

Business Culture

Business cultures in Thailand are quite similar to its neighbouring countries in Asia. The Thai culture exercises significant influence on business dealings. Although the Thai people are tolerant of different behaviours, the optimal approach is one of politeness and respect without losing one’s temper or raising one’s voice. Conflicts should be resolved by polite discussion. There is a unique Thai identity, giving rise to “the Thai way” of doing things. Personal ties and trust are also important to the Thai people; accordingly, direct personal questions are common and not inappropriate. Yet, people tend to be indirect in their dealings with each other and go around an issue rather than directly to the key point. Tasks may therefore be accomplished less efficiently and less quickly than with a direct approach.

However, there have recently been movements to challenge the established norms of a paternalistic society by questioning the status quo and arguing for openness, transparency, and accountability.

Key Business and Economic Events

The Thailand 4.0 initiative has been making significant headway. Thailand 4.0 is a policy aimed at transforming the economy of Thailand into a “Value-Based Economy’ by emphasising research and development (R&D), creative thinking, and innovation. The Eastern Economic Corridor (EEC) Project, regulated under the Eastern Economic Corridor Act (EEC Act), is one of the initial projects driving the new policy. The EEC Act is designed to attract both foreign and domestic investments, initially in three Eastern provinces of Thailand: Chachoengsao, Chon Buri and Rayong. Its purpose is to turn Thailand’s Eastern region into a leading ASEAN economic zone. The EEC Project is targeting the following industries in the Eastern region:

• High wealth and medical tourism.
• Biofuel and biochemical.
• Food processing.
• Comprehensive healthcare.
• Advance agriculture and biotechnology.
• Aviation and logistics.
• The intelligent electronics.
• Robotics.
• Next-generation automotive.
• Digital.

In addition to the above industries, the EEC Project also focuses on the development of infrastructure, technology and transportation. It plans to implement various transportation projects in the Eastern areas. Various projects are already in the works, including the:

• High-Speed Railway Project, which will link three major airports in Thailand (Don Mueang International Airport, Suvarnabhumi International Airport and U Tapao Airport).
• Double-Track Rail Lines Project which aims to connect industrial zones within the country.

Political Events

Politics in the past year has been dominated by the COVID-19 pandemic and the government’s response to it.

New Legislation

The business climate in Thailand continues to be positive and welcoming to foreign investment. Currently, deregulation and trade liberalization are taking place on many fronts, largely driven by Thailand’s participation in the ASEAN Economic Community (AEC). In 2015, the AEC Blueprint 2025 was adopted, providing the AEC with a broad economic direction which resulted in the more autonomous movement of goods, services, capital, and labor. Certain changes have already come into effect, such as:

• A substantial reduction in tariffs on many goods originating from ASEAN member states.
• Harmonisation of securities regulations.
• Relaxation on the restriction on foreign owners wholly-owning a subsidiary or holding a majority interest of a company in Thailand.
• Allowing foreign nationals to carry out certain restricted businesses under the Foreign Business Act BE 2542 (1999) (FBA).
• The BOI has launched new investment promotion schemes, making it easier for foreign nationals to conduct business in Thailand. Many temporary COVID-19 relief measures have also been put in place over the past year. Some are still in effect and future measures are possible.

 Wifi Speed

According to a survey by Ookla in April 2021, Thailand also has the seventh fastest fixed internet speed at 206.81 Mbit/s behind Singapore, South Korea, Hong Kong, Monaco, Romania and Denmark.

Electrical outlet

Thailand operates on a 230V supply voltage and 50Hz.

Per Capita GDP

$17,300 note: data are in 2017 dollars (2020 est.)
$18,500 note: data are in 2017 dollars (2019 est.)
$18,100 note: data are in 2017 dollars (2018 est.)

note: data are in 2010 dollars

Climate

tropical; rainy, warm, cloudy southwest monsoon (mid-May to September); dry, cool northeast monsoon (November to mid-March); southern isthmus always hot and humid

Residence-by-Investment

Thailand is becoming an increasingly appealing destination for travelers and professionals, even as a second home, due to its rich cultural history, affordable yet exceptionally high standard of living, and favorable tax regime.

Thailand’s exclusive residence program allows foreign nationals to stay in the country for up to 20 years. The Thailand Elite Residence Program is the world’s first of its kind, providing unlimited access to Southeast Asia’s crown jewel as well as a variety of complimentary VIP benefits.

The residence permit (privilege entry visa) is issued by Thailand Privilege Card Company Limited (TPC), a wholly owned subsidiary of Thailand’s Tourism Authority, which is part of the Ministry of Tourism and Sport. The ‘Land of Smiles,’ as the country is often referred to due to its friendly citizens, has become one of Southeast Asia’s most sought-after destinations, with an increasing number of wealthy families and retired individuals seeking to take advantage of its temperate climate, spectacular landscape, and outstanding leisure facilities.

Investments

ELITE ULTIMATE PRIVILEGE

Elite Ultimate Privilege is a twenty-year residence visa for a one-time fee of 2,000,000 THB (approximately $65,000) plus an annual fee of $650. This program includes exclusive VIP express airport services and lounge access, unlimited short-haul airport transfers for international flights, government concierge services, golf, spa treatments, and an annual health check.

ELITE PRIVILEGE ACCESS

Elite Privilege Access is a ten-year residence visa intended for family members. The one-time fee is 1,000,000 THB, which equates to approximately $32,500 for the main applicant and $25,000 for each dependent. There is no yearly fee. The program includes VIP airport express services, transportation services, government concierge services, and an annual health check.

ELITE EASY ACCESS

Elite Easy Access is a five-year residence visa that allows expats or business people to enter Thailand on a regular and easy basis. There is no annual fee with this option, which requires a one-time payment of 600,000 THB (approximately $19,500). For approximately $48,500, the Elite Easy Access residence visa can be upgraded to the Elite Ultimate Privilege option.

Processing Time

Processing time is with in 2-3 months

Key Benefits

• The five-year Elite Easy Access option costs THB 600,000 (approximately USD 19,000) and the 20-year Elite Ultimate Privilege option costs THB 2.14 million (approximately USD 68,000).
• Residence in Thailand is possible for a few days, months, or an indefinite period of time, depending on the validity of the selected package. There is no requirement for a minimum length of stay.
• Complimentary VIP services, such as a dedicated elite personal assistant for international flights and lounge access, as well as a 24-hour member contact center that operates in multiple languages.
• Thailand has a low cost of living while maintaining a high standard of living.

Requirements

• Membership fee: starting from THB 500,000 (inclusive of VAT) for 5 years
• *THB 600,000 starting on January 1st, 2021
• The applicant may not be a Thai citizen
• The applicant must not have been subject to bankruptcy proceedings
• No criminal record
• No significant overstay in Thailand during previous trips

Procedures and Time Frame

• From document submission to becoming a member, the entire process takes approximately 45 days
• Collection of visas on (i) arrival from an international flight, (ii) Thai Consulates overseas, or (iii) Immigration Department in Bangkok

xi. Natural Resources

tin, rubber, natural gas, tungsten, tantalum, timber, lead, fish, gypsum, lignite, fluorite, arable land

Ethnic Groups

Thai 97.5%, Burmese 1.3%, other 1.1%, unspecified <.1% (2015 est.)

note: data represent population by nationality

Languages

Thai (official) only 90.7%, Thai and other languages 6.4%, only other languages 2.9% (includes Malay, Burmese); note – data represent population by language(s) spoken at home; English is a secondary language of the elite (2010 est.)

Religion

Buddhist 94.6%, Muslim 4.3%, Christian 1%, other <0.1%, none <0.1% (2015 est.)

Median Age

total: 39 years
male: 37.8 years
female: 40.1 years (2020 est.)

 Urbanization

urban population: 52.2% of total population (2021)
rate of urbanization: 1.43% annual rate of change (2020-25 est.)

Physician density

0.81 physicians/1,000 population (2018)

Government type

constitutional monarchy

Unemployment Rate

0.99% (2019 est.)
1.06% (2018 est.)

Taxes

Headline Personal Income Tax Rate (highest marginal tax rate) –  35%

Any person, regardless of their tax residence status, who derives employment income from working for a Thai employer in Thailand, is subject to personal income tax, regardless of whether this income is paid within or outside Thailand.

Tax Residence

Under local tax law, an individual who stays in Thailand for a total of at least 180 days in a tax (calendar) year is regarded as Thai tax resident. Ownership of property, nationality, or legality to stay in Thailand are not factors to be considered for tax resident status.

Tax resident individuals are subject to PIT at progressive rates of 5% to 35%.

The tax year runs from 1 January to 31 December every year.

Employers and employees must each contribute to the Social Security Fund an amount equal to 5% of the employee’s gross wages, up to a maximum of THB750 per month. The rate of social security contribution can be temporarily reduced under circumstances (such as COVID-19).

Non-Tax Resident Individuals

In the context of employment in Thailand, non-tax resident employees working for Thai employers are also subject to PIT at progressive rates ranging from 5% to 35%.

Headline Corporate Income Tax Rate (excluding dividend taxes)

– 20%

Tax Resident Business

Companies incorporated in Thailand are considered to be tax residents of Thailand.

Non-Tax Resident Business

Non-tax resident business entities not carrying out business in Thailand must pay income tax on the gross amount of their Thai-sourced income (such as service fees, royalties, interest, and rental income) at a flat rate of 15% (or 10% for dividends), unless otherwise exempt or reduced under tax treaties. Income tax is paid through tax withheld at the source, by the payer of income, at the time of the payment.

Non-tax resident business entities that carry out business in Thailand (for example through a branch or office) are subject to corporate income tax in Thailand. The corporate income tax can be exempted if the non-tax resident business entity does not have a permanent establishment under an applicable tax treaty.

Corporate Income Tax

Tax resident business vehicles are subject to corporate income tax in Thailand on worldwide income. The standard rate of corporate income tax is 20% and is payable on its net taxable profit earned during any given accounting period. Reduced rates at the progressive rates of 15% to 20%, with an exemption for the first THB300,000 of net profit, are granted to qualified small and medium-sized enterprises. Corporate income tax must be filed twice an accounting period (half-year tax return and annual tax return). Half-year tax return must be filed within two months from the end of the first six-month of an accounting period. Annual tax returns must be filed within 150 days after the end of accounting period. Tax returns can be filed in hardcopy at an area revenue office or in softcopy through the website of the Thai Revenue Department.

Value Added tax (VAT)

Currently, VAT is payable at a rate of 7% (or 0% for export of goods and services) on the following categories of business transactions:

• Sale of goods.
• Provision of services.
• Export sales.
• Import of goods for any purpose.
• Some business activities are exempt from VAT, such as the sale of agricultural products.
• Specific Business Tax (SBT)

Certain business activities are subject to SBT, instead of VAT, at a payable rate varying between 0.1% and 3% of gross monthly receipts. Such businesses include:

• Banking or similar activities.
• Lending money on the security of a property mortgage in the ordinary course of business.
• Securities.
• Life insurance.
• Pawn shop services.
• Commercial sales of immovable property or sales of immovable property for profit.
• Municipal Tax
• Municipal tax applies to business subject to SBT and is charged at a rate of 10% of the SBT payable. Municipal tax is already included in the 7% VAT rate.

Stamp Duty

There are 28 instruments/documents subject to stamp duty (Stamp Duty Schedule, Revenue Code). The rate of the stamp duty payable and persons liable to stamp duty depend on the instrument/document executed. If the instrument/document is executed in Thailand, stamp duty must be paid within 15 days from the date of execution. Stamp duty on a instrument/document executed outside Thailand must be paid within 30 days from the date of bringing the item into Thailand.

Capital gains are considered ordinary income. Those obtained from the sale of securities listed on the Stock Exchange of Thailand or any other ASEAN stock exchange, on the other hand, are tax exempt, subject to certain exceptions.

Because Thailand lacks regulations governing controlled foreign companies (CFCs), profits retained in foreign entities owned by tax-residents may not be attributable.

A 12.5 percent real property tax is levied on the rental value of the property each year. Inheritances worth more than THB100,000,000 are taxed at a 10% rate, though exceptions may apply in certain circumstances. A gift tax is levied on donations of assets worth more than a certain amount. 20,000,000 baht (10 million in the case that recipient is not a descendant, ascendant or spouse).

In Thailand, there are no taxes on net wealth.

The standard rate of VAT is 10% (reduced to 7% until September 30, 2019).

In terms of corporate taxation, resident entities are taxed at a rate of 20% on their worldwide income. Small and medium-sized enterprises (SMEs) may be subject to lower progressive rates if their paid-in capital and net taxable profits do not exceed certain thresholds.

Tax holidays of up to eight years may be granted to entities approved by the Board of Investment. Companies operating under the International Headquarters (IHQ) and International Trade Center (ITC) regimes may be exempt from CIT for up to 15 years, among other benefits.