Why invest in Thailand?

Thailand is the second largest economy in Southeast Asia, behind Indonesia. It is the 27th largest economy in the world – so it’s not quite in the G20, but it’s no far off either.

Anyone who’s ever visited Thailand knows that the country is quite developed by international standards – world class malls, excellent infrastructure, lightning fast wifi are all readily available.

Bangkok has become an economic powerhouse in the region. The growth that the city has experienced over the last 40 years has been tremendous by any measure. Today it is one of the most exciting cities in the world, and before the pandemic it was the most visited city on Earth.

Still today, there is a lot of money flowing into Thailand – most of it from China but also from all around the world. All you have to do is walk the streets to see there is potential everywhere.

The Thai Baht is one of the more stable currencies in Southeast Asia. It is starting to be referred to as a safe haven currency by some analysts. This is due to the fact that the country holds more foreign reserves than it does foreign denominated debt. They learnt their lesson after the Asian currency crisis of 1997.

And in a world where many western governments are seemingly addicted to quantitative easing and debasement of their currency, Thailand has refrained from firing up the printing press. This is good for people who hold Baht’s.

Trading in Thai stocks can help you to get a piece of the action. And to capitalise on the growth of the Thailand economy.

In this article we will cover what it takes to open up a brokerage account in Thailand. Also referred to as an investment account or a trading account, it allows you to buy and sell stocks on the Stock Exchange of Thailand (SET).

How to open a brokerage account in Thailand

Investment accounts are generally facilitated by the banks in Thailand. So often the first step will be to open up a bank account. Bangkok Bank and Kasikorn Bank are the two main banks that are known for being accommodating towards foreigners.

It can be a drawn out and often frustrating process when trying to open a bank or brokerage account with your bank. Expect to get the run-around. It’s not unusual to receive different answers from different branches, depending on who you speak to on the day.

You will need to attend a larger branch that has a business and investment banking department, such as the Silom or Emporium branch of Bangkok Bank.

If you are approved to open a securities trading account with Bangkok Bank, you will then be directed to set up an account with Bualuang Securities. Your securities trading account will link to your existing Bangkok Bank checking account.

Once set up, you can manage your portfolio via the Bualuang mBanking phone app.

Who is eligible to open a brokerage account in Thailand?

Not everyone can walk in off the street and open a securities trading account in Thailand. You will likely run into some difficulties if you are on a tourist visa.

The main way of being eligible to open a brokerage account in Thailand is to have a Thai work permit – so then the question becomes how do you get a work permit?

There are a few ways, as outlined below:

  • Register a Thai company and hire yourself as an employee under a work permit
  • Get hired by Thai company as an employee – For example: to teach English at a language school
  • Obtain a sponsored work permit – pay an organization to sponsor you

Long Term Resident (LTR) visa holders are also eligible to open an investment account to buy and sell stocks and ETFs in Thailand.

Although holders of the Thai Elite visa are not eligible as this visa doesn’t come with work rights.

You may be able to open a Thai brokerage account if you are on a SMART visa as this sometimes allows access to services that normally require a work permit. Talk to your bank or to us if you would like to investigate this option.

An overview of the Stock Exchange of Thailand

The Stock Exchange of Thailand was established in 1975. It is the second largest stock exchange in Southeast Asia when measured by market capitalization. Singapore is number one.

The SET is the region’s most actively traded bourse, with a daily trade turnover of more than USD 2 million.

There are two main markets for trading listed companies:

  • SET – The is the main exchange. Most larger companies are traded on this market.
  • mai – Market for Alternative Securities. This is for small and mid-cap companies.

The stock exchange trades on Monday to Friday from 10:00am – 12:30pm and 2:30pm – 4:30pm, Indochina Time (ICT).

Investing in Thai blue chip stocks

 We can’t tell you what to buy but we can give you an overview of some of the household name, blue chip stocks that are listed on the Thai stock exchange.

If you are interested in investing in Thai blue chip stocks, the SET50 is a good place to start. The SET50 is an index that tracks the top 50 listed companies in Thailand.

Let’s take a look at some of the more well known companies that are included in the SET50 index.

  • Airports of Thailand – International airport operators of Suvarnabhumi, Don Mueang, Chiang Mai and other regional airports
  • Bangkok Bank – the largest bank by assets in Thailand
  • BTS – Railway operator. Many people will be familiar with the BTS train in Bangkok
  • PTT – Large oil and gas company and associated services
  • Siam Cement – the largest and also the oldest building material company in Southeast Asia
  • True Corp – Telecommunications and consumer electronics

For more information on the SET50 index and the companies that are on it, go here.

How are capital gains taxed in Thailand?

Individuals making a capital gain via a direct investment on the Stock Exchange of Thailand are generally exempt from capital gains tax on the sale of listed securities.

How are dividends taxed in Thailand?

Dividends from Thai listed companies are subject to a withholding tax of 10%. Thai residents have the option to exclude dividend income from their personal income tax calculation, and essentially accept the 10% tax.

Or they can choose to add the gross dividend income to their personal income tax calculation and claim the 10% withholding tax as an imputation credit (franking credit) on their overall tax liability.

Important Note:

How you are taxed in Thailand generally depends on whether or not you are regarded as a resident for tax purposes in the Kingdom. Tax treaties and double taxation agreements with your home country can also come into the equation.

Whilst information provided here is accurate at the time of writing, tax legislation is constantly changing and we can therefore not guarantee the accuracy and timeliness of this information.

Further, any information provided is general in nature only and cannot be applied to all taxpayers. If you are looking for tax advice that is specific and accurate to your situation, you can book a consultation here.

So, is it a good idea to buy stocks in Thailand?

Deciding where to invest your money is a personal decision that we can’t make for you. But there are some benefits that may come from investing in Thai stocks. We discuss that below.

Opening a brokerage account and buying stocks in Thailand can be a great way to dip your toe into international investing.

It allows you to expand your footprint outside of your home country and this comes with several benefits.

Your level of asset protection is increased by moving some of your wealth into an offshore jurisdiction.

There is potential to improve your tax situation depending on how you structure things.

Offshore investing and in particular investing outside of the major western economies, offers a higher level of diversification. And therefore you gain a greater level of protection against market volatility, compared to if you were to hold all your investments in a single region.

And of course, by opening a brokerage account and trading stocks in Thailand you will gain experience and get a feel for offshore investing. You will become more comfortable with the process and expand your knowledge of investing in international markets.

If you would like help with investing in Thailand or have any questions, feel free to reach out to us.

Thanks for reading.