)
In a move to bolster foreign investments, Thailand is set to introduce a 10-year investor visa in its eastern economic corridor ( EEC). The EEC, which covers three provinces east of the capital, Bangkok, is a centrepiece of government efforts to boost growth and encourage investment, particularly in high-tech industries.
Companies investing in modern, environmentally friendly industries can bring in employees, specialists, executives, and professionals, who will get an EEC work permit, a flat income tax rate of 17% and a 10-year visa.
The announcement comes days after the Southeast Asian nation waived tourist visa requirements for Indian and Taiwanese travellers. From November 10, 2023, to May 10, 2024, Thailand is granting a temporary visa exemption for Indian tourists, allowing a 30-day stay for tourism purposes. This initiative mirrors earlier short-term stimulus visa programmes introduced for Chinese and Russian tourists.
India is the fifth largest source of foreign tourists in Thailand
Between January 1 and May 30, 2023, India was the fifth-largest contributor of foreign visitors to Thailand. Out of the 10 million international tourists who visited Thailand during this period, approximately 604,963 were Indians, as per the Tourism Authority of Thailand (TAT) latest data.
From January to October this year, the country welcomed 1,302,483 Indian tourists, marking an impressive 86 per cent increase compared to the same period in 2022, said TAT in a release.
With the introduction of the visa exemption scheme, the Tourism Authority of Thailand (TAT) anticipates a surge, projecting 1.6 million Indian tourists in 2023. This influx is expected to generate approximately 65.6 billion Baht in revenue.
“Indian tourists to Thailand stay on average 7-8 days with daily spending of around 5,500 Baht per person. As well as the millennials and families, Thailand also see affluent Indian travellers in the wedding, golf, and incentive segments,” said TAT.
Potential of India’s outbound tourists
According to a McKinsey & Company report publised on November 1, India is set to be an important global source market for leisure travel boosted by rising economic prosperity and a fast-growing economy,
“The country’s forecast growth in GDP per capita, accompanied by a growing propensity for international travel, could lead to a wave of Indian travellers setting out to see the world. If India follows China’s outbound travel trajectory (which it could, due to similarity in population size and per capita income trajectory), then Indian tourists could make 80 million to 90 million trips a year by 2040,” said the report titled ‘From India to the world: Unleashing the potential of India’s tourists’.
The McKinsey report also noted that over the past decade, Thailand launched 50-plus marketing campaigns specifically for Indian consumers, travel agents, and niche businesses.
Sluggish Chinese tourism
Among the annual visitors, Chinese tourists constituted a substantial portion, making up approximately 11 million out of the 40 million who arrived in Thailand each year before the pandemic disrupted international travel, according to TAT data.
In an effort to revitalise Thailand’s tourism industry, the government initiated a visa exemption program targeting tourists from China and Kazakhstan. Launched on September 25 and set to run until February of the following year, the program aimed to boost tourist numbers, particularly from China.
However, the latest data as of May 2023 indicate that the expected surge in Chinese visitors has not materialised. Out of the 10 million foreign visitors welcomed by Thailand during this period, only 1.1 million are from mainland China.
Additionally, a shooting incident at a luxury Bangkok mall killing two people, including a Chinese national, has added to the concern leading to the Thai government reportedly proposing joint Thai-Chinese police patrols to help restore the confidence of tourists from Asia’s largest economy.
Before the onset of the Covid-19 pandemic, foreign tourists were a significant economic driver for Thailand, contributing up to 11.5 per cent of GDP in 2019, as per S&P Global. However, foreign tourism visits collapsed after April 2020 as many international borders worldwide were closed, including Thailand’s own restrictions on foreign visitors.
“As COVID-19 border restrictions were gradually relaxed in Thailand and also in many of Thailand’s largest tourism source countries during 2022, international tourism showed a significant improvement during the second half of the year. The number of international tourist arrivals reached 11.15 million in 2022, compared with just 430,000 in 2021,” said S&P Global on March 28, 2023.
The total number of visits was still far below the 2019 peak of 39.8 million, indicating considerable scope for further rapid growth in the tourism sector 2023.
Slowing growth pace
Southeast Asia’s second-largest economy experienced a modest growth rate of 1.5 per cent in the July-September quarter, significantly below expectations, according to Reuters. This slowdown is attributed to weak exports and government spending.
With the latest visa policy easing, the government aims to increase total investment in the Eastern Economic Corridor (EEC) to 500 billion baht ($14.23 billion) from 2023 to 2027, translating to an annual target of 100 billion baht, according to statements by Phumtham, a deputy prime minister. Currently, the actual investment in the EEC stands at approximately 75 billion baht per year. There is also the Long-Term Resident Visa
According to KPMG, in accordance with the measures to stimulate the economy and investment due to the consequences of Covid 19 outbreak in Thailand, the government had in 2022 issued criteria for foreigners long-term stay in Thailand by providing a new visa called “Long-Term Resident (LTR) Visa”. The creation of the LTR Visa is to encourage more domestic spending, be beneficial to business operators and make it easier for those wishing to generate income in Thailand.
LTR Visas will be offered to four categories of foreigners: wealthy global citizens, wealthy pensioners, work-from-Thailand professionals, and highly skilled professionals. Spouses and dependents of LTR Visa holders will qualify for the same visa, said KPMG
The Long-Term Resident Visa Thailand is a 10-year visa aimed at attracting high-potential foreigners who wish to relocate to Thailand on a long-term basis and who are expected to stimulate overseas investment and economic development in the country. The visa allows holders to live and work in Thailand for up to ten years and provides many benefits, including access to healthcare, education, and the ability to open a bank account,” said Siam Legal in a note.
LTR Visa holders may also bring up to 4 family members; their legal spouse and children under the age of 20. Spouses and dependents will qualify for the same visa category as the LTR Visa holder. Under the LTR visa program, successful candidates get several benefits such as a 10-year renewable visa with multiple re-entry permits, the extension of the notifications of staying in Thailand over 90 days to 1 year, renewable digital work permits, 17% personal income tax rate for highly skilled professionals, a fast track service at international airports in Thailand etc.
.
