Thailand’s latest move to attract global investment and talent might be a step too little, too late, given its slow start off the blocks and its unimpressive record on innovative visa schemes.
As more countries concentrate on research and development (R&D) and innovation in the global competition for digitisation, efforts to attract highly qualified talent are increasing in scale and complexity. Globally, highly industrialised wealthy countries like the U.S., United Kingdom, Germany, Japan, and Canada, eagerly welcome such talent with special visas. In Southeast Asia, Singapore revised and introduced its Overseas Networks & Expertise Pass in 2022, while Malaysia has promoted its “Malaysia My Second Home” (MM2H) scheme since 2002. In the same vein, Thailand aims to bring in substantial investments and qualified professionals to live and work in Thailand, to give a short-term boost to its economy.
This stiff competition for income and talent in science and technology has become a major feature of the post-pandemic reopening of Thailand’s borders to foreigners. To improve Thailand’s attractiveness, a new Long-Term Resident (LTR) Visa was officially launched on 31 August 2022. Positioning Thailand as a regional centre for lifestyle and business, Bangkok plans to attract one million “high-potential” individuals, including wealthy global citizens and retirees, digital nomads, and highly educated professionals.
The first three types of individuals were targeted based on pre-existing data (including potential applicants already residing in or connected with Thailand) while the last group will serve Thailand’s immediate strategic needs. In 2019-2020, applications for the existing “Thailand Elite” card climbed by 25 per cent, driven by demand from wealthy individuals, particularly mainland Chinese. (This programme offers a five-year renewable multiple entry visa; visa holders do not need to leave Thailand to renew their visas.) This type of applicant is likely to comprise the majority of the “wealthy global citizen” group for the new LTR visa, while potential holders of so-called “retirement visas” and medical tourists who decide to stay long-term in Thailand after their operations would form the second largest group.
However, Thailand 4.0 faces major obstacles, including the lack of strong digital infrastructure, continued political uncertainty and instability, and limited numbers of highly skilled domestic workers.
Thailand is keen to seize on the global trend of digital nomadism that took off during the pandemic and needs to lure talent to fulfil Thailand’s “Industry 4.0” policy and its massive Eastern Economic Corridor (EEC) project. Thus the LTR scheme is targeting these two groups. “Thailand 4.0” focuses on innovation-oriented manufacturing such as forging a next-generation automotive industry, a smart electronics industry, and updating agricultural and biotechnology businesses. However, insufficient human resources in such industries pose a big challenge to these targets.
Visa holders under the LTR scheme will enjoy unique benefits that seem more generous than those under the previous “Thailand Elite” visa. These include the ability to stay in Thailand without applying for new visas for ten years, a work permit (that is not subject to the pre-existing ‘four Thais-to-one foreigner’ quota), a digital work permit that allows holders not to pay to Bangkok any taxes on their overseas income, and a personal income tax rate capped at 17 per cent instead of the previous maximum of 35 per cent. LTR visa holders will also get ‘Fast Track’ services at Thailand’s international airports.
The Thai Board of Investment (BOI) ambitiously hopes to attract one million LTR visa holders in five years (2022 to 2026), which if successful, could increase Thailand’s domestic economic circulation and investment by US$27 billion. However, the programme has had a faltering start. According to unpublished data from the BOI, by 10 October 2022, only 1,003 foreigners had applied for the LTR visa, of which 56 per cent were filed by domestic applicants – meaning foreigners who already resided in Thailand in some other visa status, while just 44 per cent came from new overseas applicants. Unless this imbalance is corrected, it will be hard to see how the goal of one million new LTR visa holders can be reached; this also suggests that foreigners do not view the visa scheme as positively as the BOI hopes.
The domestic LTR applications are likely to come from foreign residents who already possess other types of visa including the Thailand Elite, investment, retirement, medical treatment, or dependent categories. In 2022, there are 187,616 such visa holders. A one-year multiple entry visa costs 5,000 baht (around US$140) while the LTR visa is 20,000 baht (around US$560). Ironically though, cost is likely the smallest concern for wealthy applicants or even digital nomads and talent.
Amidst the intense global rivalry for talent, Bangkok needs to be highly attractive compared to other global magnets for wealth and the technorati. However, Thailand 4.0 faces major obstacles, including the lack of strong digital infrastructure, continued political uncertainty and instability, and limited numbers of highly skilled domestic workers. The technology and innovation investment statistic, where only 0.05% of total investment applications were for this sector in 2021, testifies to the considerable challenges. The LTR visa data confirms the low proportion of highly skilled professionals, with 142 applicants (or 14 per cent) applying for the tech category but just 20 candidates being approved. It is clear that the new LTR visa alone is not competitive enough and that the best talent has probably already been taken by other global centres.
All things considered, the LTR could turn out to be unremarkable like the 2003-2021 Thailand Elite project, which attracted only about 15,000 visa holders in its 18-year run. This suggests deeper issues are at work and may not have been completely thought through: Thailand’s BOI might want to consider what makes other regional or global long-term visa programmes succeed and improve the LTR scheme, while there is still time to aim high and fix things.
Sivarin Lertpusit is Assistant Professor at the College of Interdisciplinary Studies, Thammasat University.