Government plan to attract wealthy foreigners

7 Jul 2022

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The government has set a "proactive economic plan" aimed at attracting at least 1 million high-income foreign tourists and foreign investors to the new S-Curve industries. As part of its efforts to lift the country out of the middle-income trap

Last Friday, a meeting of the Centre for Economic Situation Administration (CESA) chaired by Prime Minister Prayut Chan-o-cha approved in principle a plan to promote investment and tourism for a post-pandemic economic recovery, according to Deputy Prime Minister Supattanapong Punmeechaow.

He said concerned agencies have been given one month to present the plan's details before the CESA's next meeting.

"When the meeting endorses the details, state agencies will step up efforts to attract a first investor by June," he said, adding that the government has set a goal of achieving 4% economic growth this year and next year.

In terms of tourism, a proposal will be made to change foreign property owners' regulations to make it easier for them to buy homes in Thailand. According to ML Chayotid Kridakon, Mr. Supattanapong's adviser, this is intended to draw high-income retirees from Europe, Scandinavia, Japan, and South Korea to live in Thailand.

The government has formulated a short-term plan to attract high-income foreign tourists, particularly retirees, to visit and settle in Thailand. "There are about 200 million of them in the world, and we have set a goal of drawing one million to Thailand per year," said ML Chayotid, a former managing director of JP Morgan Thailand.

"These people make about 300,000 – 400,000 baht a month. If a million of them come to Thailand and spend $100,000 each month, Thailand will earn about 1.2 trillion baht every year."

Mr. Supattanapong said that the plan aims to achieve 4-5 percent continuous economic growth and that if this growth continues for six to seven years, Thailand will be able to free itself from the middle-income trap. He said there are plans to improve immigration regulations and applications for visas and work permits for foreign experts to work in Thailand, such as enabling foreign ex-pats to report their whereabouts to authorities every 90 days.

Tax structures will also be tweaked to attract foreign investors to set up regional offices in Thailand, he said, like reducing corporate income tax and improving privileges and benefits for regional hubs, retirees, self-employed people, and start-ups.

Meanwhile, Finance Minister Arkhom Termpittayapaisith said on Wednesday that the government would not consider raising the 7% value-added tax (VAT) for at least the next two years. The government now seems to be preparing to keep the 7% VAT in effect for another year, beginning on September 30, as the extended period of maintaining the same 7% VAT expires.

He said that as the ministry works to revise the country's tax rates, one important requirement is that the new tax rates support the government's development of new S-curve industries. When asked how badly the government will miss its tax revenue target this year, he said the result of tax collections will tell that by the end of June.