Long-term resident visa approved for high-potential foreigners in Thailand
With a view to stimulating the Thai economy and enhancing the country’s competitiveness as a regional hub, the Royal Thai Government approved the highly anticipated long-term resident visa (LTR) in May 2022, which will take effect on 1 September 2022 (i.e., after the lapse of 90 days from 2 June 2022). The LTR program, which offers both tax and non-tax benefits to qualifying foreigners, is intended to attract a specific category of foreigners, i.e., so called ‘high-potential’ individuals (high net worth and highly skilled individuals) to come live and work in Thailand.
The program is promoted by the Thai Board of Investment (BOI) in collaboration with other relevant government agencies, including the Ministry of Interior, Ministry of Finance, Ministry of Labour, etc. The process and conditions for obtaining an LTR will apply in accordance with various regulations issued by these different government agencies. Applications for an LTR may be submitted as from 1 September 2022.
The Ministry of Interior, together with the BOI, have created four categories of foreign individuals: wealthy global citizen, wealthy pensioner, work from Thailand professional group and highly skilled professionals. The requirements/conditions that apply to each category are as follows:
1) Wealthy Global Citizen
- Wealthy foreigner with at least USD 1 million in assets.
- Foreigner earning personal income of at least USD 80,000/year in the past two years.
- Foreigner who can invest at least USD 500,000 in Thai government bonds, foreign direct investments, or in Thai property.
2) Wealthy Pensioner
- Retiree aged 50 years and older who has an annual pension income.
- Personal income of at least USD 80,000/year at the time of application.
- If personal income is below USD 80,000/year but not less than USD 40,000/year, the applicant must also invest at least USD 250,000 in Thai government bonds, foreign direct investment or in Thai property.
3) Work from Thailand professional group
- Remote employee working for a well-established foreign company, such as a public company listed on a stock exchange or a private company that has been in operation for at least three years with a combined revenue of at least USD 150 million in the last three years.
- Employee with personal income of at least USD 80,000/year in the past two years.
- If personal income is below USD 80,000/year but not less than USD 40,000/year in the past two years, the applicant must have a master’s degree or above, own intellectual property or receive Series A funding.
- The applicant must have at least five years’ work experience in the relevant field of the current employment over the past 10 years.
4) Highly Skilled Professional
- Personal income of at least USD 80,000/year in the past two years.
- If personal income is below USD 80,000/year but not less than USD 40,000/year in the past two years or before retirement, the applicant must have a master’s degree or above in science and technology or special expertise relevant to the job assignment in Thailand. There is no minimum income requirement for a professional working for a Thai government agency.
- The employer is engaged in any targeted industries, is a higher education institution, research institution, specialized training institution or Thai government agency.
- The applicant must have at least five years’ work experience in the targeted industry except for applicants with a PhD or above in the relevant field of the targeted industries or applicant working for a Thai government agency.
All categories of applicant must have health insurance with at least USD 50,000 coverage or Social Security benefits ensuring treatment in Thailand, or with at least a USD 100,00 deposit.
The conditions and categories are subject to a periodic review.
The program will also extend to the legal dependents of a LTR visa holder. Unlike the dependent visa (category “O”), dependents under an LTR visa are limited to a spouse or children (under 20 years of age) and does not include parents. The maximum number of dependents may not exceed four per LTR visa holder. It also should be noted that, unlike the Elite Visa program (a special tourist visa program), LTR visa holders are allowed to work from or in Thailand.
Overview of the process
- Apply for a Certificate of Qualification (COQ) online. The application will be processed within 20 days from receipt of all required documents.
- Apply for an LTR with the Royal Thai Embassy, Royal Thai Consulate-General abroad or the Immigration Bureau in Thailand within 60 days from the issuance of the COQ. The processing fee for a multiple entry LTR is THB 50,000 per person.
- If the applicant will work in Thailand, he/she must comply with the work permit and visa regulations. He/she can then apply for a digital work permit and collect it at the Department of Employment at the One Stop Service Centre in Chamchuri Square Building, Bangkok, or any provincial labour office. The processing fee for the digital work permit is THB 3,000 per year.
- An LTR will initially be granted for not more than five years, but may be extended for an additional five years. However, to extend the visa, the LTR holder must reapply for a COQ.
Benefits for LTR visa holders
- Fast-track services at Thailand’s international airports.
- The regular 90-day report to the immigration authorities only has to be provided annually.
- The LTR visa will automatically include a multiple re-entry permit.
- An LTR visa holder under the highly skilled professional category is entitled to a final withholding tax rate of 17%.
- An exemption from personal income tax on foreign-source income for Wealthy Global Citizens, Wealthy Pensioners or Work from Thailand Professionals under the regulations prescribed in the Thai Revenue Code. 6) Processing of a work permit via the BOI One Stop Service Centre.
- Although qualified foreigners can obtain a 10-year LTR visa, the visa will not be issued at one time. Thus, it is more appropriate to state that the LTR visa is issued for a maximum period of five years, extendible for another five-year maximum provided the individual still qualifies at the time of the extension request.
- LTR visa holders do not enjoy any special privileges with respect to the ownership of land and real estate assets in Thailand. As is the case with other foreigners, LTR visa holders can purchase freehold condominium units.
- It may be easier to obtain a tax residency certificate under a LTR visa as compared to the Elite visa program, which is essentially a special tourist visa.
Understanding the tax regulations for LTR visa holders
Highly Skilled Professionals
A highly skilled professional LTR visa holder has the option to choose a final withholding tax (FWT) of 17% on income earned from the employment instead of the graduated income tax rates of 0% to 35%. Once a LTR visa holder opts for the 17% tax, this income will be excluded in calculating the graduated income tax rates for other income earned by the individual (e.g., foreign-source income brought into Thailand in the same year of earning for tax residents).
If a highly skilled professional LTR visa holder earns income under Section 40(4) of the Thai Revenue Code (TRC) (e.g., interest on bonds, Thailand bank deposits, etc.) and Section 40(8) (other income) and elects to pay tax pursuant to Section 48 (3) and (4) of the TRC, he/she can also exclude this income in calculating any graduated income tax rates.
The LTR visa holders are entitled to the above-mentioned benefits, have filed the relevant tax returns declaring the relevant assessable income.
Wealthy Global Citizen, Wealthy Pensioner or Work from Thailand Professionals:
LTR visa holders under the Wealthy Global Citizen, Wealthy Pensioner or Work from Thailand Professional categories will be entitled to an income tax exemption under the remittance rule, i.e., income earned in previous years and brought to Thailand during the succeeding year will be exempt.
- The tax concessions can be revoked with retrospective effect if the taxpayer does not comply with the conditions and requirements. This can potentially affect the employer’s tax reporting requirements.
- The incentives do not eliminate any potential issue of creating a permanent establishment for a foreign employer (specifically relevant for the work from Thailand professional group) if the conditions under the relevant double tax agreement are fulfilled. Creating a permanent establishment in Thailand may also lead to a potential issue under the Foreign Business Act.