The successive waves of Covid-19 have caused significant contractions in the Thai economy, as in the rest of the world, evidenced by its declines of 6.1% in 2020 and 3.4% in the first quarter of 2021. This has led the government of this country to create the Thailand Foreign Investment Program to adjust its growth forecasts for this year from 3.4% to 2.2%, although, with the recovery of external demand and internal stimuli and programs, the forecast for 2022, barring new disruptions, is initially set at 5.1%.
The recently approved Thailand Foreign Investment Program includes a new package of investment promotion measures aimed at foreign citizens with high purchasing power and highly qualified professionals. Among the planned benefits are the granting of long-term visas for interested parties and their families; automatic work permits; equalization of income tax rates with those required of Thai citizens; tax exemption on foreign income; and freedom to access property, especially rural land.
Subject to further details on these measures and their management by the Board of Investment (BOI) through a new department created for foreign investments, foreign citizens with high purchasing power seeking to enjoy these benefits will need to invest a minimum of $500,000 in government bonds or real estate. They must demonstrate a minimum annual income of $80,000, assets of $1 million, and medical insurance of $100,000 as a starting point.
The goal of the Thailand Foreign Investment Program is to attract 1 million such citizens in the next 5 years to generate 1 trillion Thai baht in spending, 800 billion in investments, and 270 billion in tax revenue through the benefits mentioned earlier. While the feasibility of this goal remains uncertain, the program the Thai government aims to implement resembles, with nuances and pending further details, programs known in many European countries, including Spain, as “Golden Visa.”
The success of the measures under the Thailand Foreign Investment Program will ultimately depend not only on their scope but also on the necessary bureaucratic flexibility and efficiency in their implementation. The lack of such flexibility and efficiency, unfortunately common in many administrations, often hinders their practical application, lowering expectations set by both the approving government and potential users. Hopefully, in this case, given their significance for Thailand in the current economic situation, this will not be the scenario.
Antonio Viñal
Lawyer
AVCO Legal
madrid@avco.legal
