Life is getting harder for expats living in Bangkok and Thailand

Plenty of expats live in Bangkok and around Thailand. The government is making it harder on them.

Dateline: Suvarnabhumi Airport, Bangkok, Thailand (thankfully only for 2 hours)

Hrmpppf!

That sound could either be the sound of my bags being thrown onto the security belt by the humorless airport security staff, or the sound of said staff’s angry reaction to my casual suggestion that their airport security procedures seem rather reasonable compared to the United States.

I’m transiting through Bangkok’s Suvarnabhumi airport today on my way to our Passport to Freedom conference in Cancun, and even without leaving the terminal, I can see exactly what many of my contacts who are expats in Thailand are talking about.

I’ve long called Thailand the United States of Asia, not just because the country’s name means “The Land of the Free”, but also for the similar imperiousness and police state arrogance that Thailand exudes.

All of that is getting worse.

 

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It’s no secret that I am not a big fan of Thailand. Having spent a month living in Bangkok, I fail to see what the fuss is about. There are plenty of more livable cities in Southeast Asia, whether you’re looking for business opportunities, cheap food, or overall cheap cost of living.

As an impartial observer, I share my real thoughts. Not everyone will agree. And any time I criticize Thailand, a whole contingent of pro-Bangkok expats come out of the woodwork to disagree with me.

That’s the beauty of open dialogue.

However, there are some troubling developments in Thailand that have even some of my most Thailand-loving friends and perpetual travelers concerned about living in Bangkok, or even in the country’s smaller cities.

Here are a few of those developments.

The government is attempting to crack down on tourists

Take note of my use of the word “attempting”. The Thai government certainly isn’t the United States or the European Union when it comes to efficiency in tracking people down.

However, that doesn’t mean that the anti-tourist sentiment isn’t building up in the government.

“Visa runs” are something many digital nomads and backpackers who have lived in Thailand as tourists are familiar with. Most Western citizens get thirty days in Thailand without a visa if they arrive by air, or fifteen days if they arrive by land.

For years, immigration officials were perfectly content with tourists crossing over the border to Cambodia, Malaysia, or even Myanmar for the day to reset the clock on their visa.

That has changed. The government has come out swinging against visa runs. That doesn’t mean you can’t pull one off, but I have heard stories of expats living in Bangkok on nothing more than a tourist visa being turned away when they tried to do a same-day visa run.

One friend of mine had a friend banned from the country for a year for “abusing” the process. The government does not want people moving to its country using flag theory principles and they are ramping up enforcement.

So much so that a cottage industry has been built where one foreigner will set up a Thai company, rent some office space, and then “hire” expats in exchange for a percentage of their sales. Under this model, you could spend around $7,000 a year just for the privilege of living in Thailand.

The government is attempting to collect taxes from expats

Spend more than 183 days in any country that asses income tax and chances are you’ll be on the hook for some tax. Western countries tend to count your days like a hawk in order to extract maximum tax, while many other countries are more lax.

While Thailand has little in place in the way of an enforcement mechanism to actually target expats who use companies outside of Thailand to conduct business and earn a living, that doesn’t mean the government isn’t rattling the saber and suggesting that even the much-maligned long-term tourist should be paying income tax to Thailand.

While Thailand has many elements of a territorial tax system in place, I have seen comments from government officials in the press suggesting that money earned there is “Thai source income”.

Normally, I wouldn’t pay much attention to the rantings of bureaucrats who think tourists ought to be taxed for running a business that has nothing to do with their country. However, Thailand’s government is insane enough that I wouldn’t put it past them to actually detain people to scrounge up some revenue.

It won’t work, but that doesn’t mean they won’t try.

Thailand is becoming (more of) a police state

My first observation when living in Bangkok last year was just how much of a police presence there is. You can’t even get on the subway without being patted down.

There is some credence to expats’ arguments that this is not exactly a TSA-style pat down and that the officers conducting the harassment don’t get the narcissistic thrill that their Western counterparts do.

That, however, does not make it any less intrusive or any less a sign that Thailand is headed in the wrong direction. Southeast Asia is generally known as a peaceful place with little police presence. Living in Malaysia, I almost never even see the police, and even immigration authorities are extremely easy to deal with.

Thailand, on the other hand, is famous for its coups and periods of martial law. Again, the Thai military isn’t exactly as scary as a US tank rolling down your street, but the fact that one government isn’t as scary as another doesn’t mean their intentions are any less Orwellian.

Even here at the airport, I feel like I might as well have landed in New York City. Everyone here is unpleasant and very eager to make you jump through a lot of security hoops, including nude body scanners, removal of shoes, and more.

I wouldn’t trust a bunch of poorly-paid Thais to keep me safe in the same way I don’t trust the TSA. Their security procedures both at the airport and on the streets are expanding.

During last year’s martial law, all of my expat friends complained about the curfew in Bangkok. You literally couldn’t be out past a certain hour. Not exactly the freedom most expats seek.

The Thai economy is a mess

Thailand has the unique distinction of being overpriced for investment and just an outright bad investment. In speaking with numerous business owners, business brokers, and investors here last year, I quickly realized that Bangkok isn’t a cheap place to come and start a business.

Sure, you can run your location independent business from here if you don’t mind the curfews or the fact that, in the “Land of Smiles”, almost no one smiles.

But opportunity in Thailand just isn’t that strong. In fact, one of the biggest advantages Bangkok has these days is that it is deemed “more livable” by all of the foreign investors making their money in neighboring Cambodia and Myanmar.

My friend Doug Clayton, who runs a frontier market private equity fund in Phnom Penh, moved to Bangkok recently because he got bored living in Cambodia. Heads of local chambers of commerce told me many of their members aren’t doing any business in Thailand, but use it as a base for investing in Myanmar.

The Thai baht has gotten beaten up just as much as other emerging market currencies, so it’s not fair to point to that as evidence of its economic decline, even though Malaysia’s currency got beat up due to falling oil prices and not because it has an insane government.

However, I do believe that Thailand real estate prices have no solid fundamentals to back them up. If you believe real estate in China is overpriced, consider that at least Chinese culture dictates working long hours and saving as much money as possible.

Chinese people trust real estate and gold more than banks, causing real estate prices to soar. By many valuation metrics, Chinese real estate is overpriced, but less so when you consider it’s merely used as another form of banking for many Chinese.

Thailand does not have that benefit. Expats told me that when street food vendors sell out of food, they don’t send someone to the market to get more. They simply go home. There’s nothing wrong with that laid back mentality, but that, combined with an anti-foreigner, anti-capitalism government, will never lead to any sort of economic dominance.

Personally, I wouldn’t invest in a green banana in Thailand.

Some might say my opinions on living in Thailand are sour grapes. No more so than any other country I’ve spent significant time in. As a student of cultures and economies, I see nothing positive on the radar for this country.

The fact that one guy in this country might try to throw me in jail for saying that is just icing on the cake.

What are your opinions on living in Bangkok? Feel free to comment below.

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Andrew Henderson

Andrew Henderson is the world's most sought-after consultant on legal offshore tax reduction, investment immigration, and global citizenship. He works exclusively with six- and seven-figure entrepreneurs and investors who want to "go where they're treated best". He has been researching and actually doing this stuff personally since 2007.
Andrew Henderson
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