A buzz of excitement went through the Thailand expat community last week, when it was announced the Thai government planned to offer ten year visas to those foreigners over the 'retirement' age of 50. That buzz of excitement was shortlived however once any street savvy expat decided to delve into the figures and requirements in more detail.
Eventually one was left wondering exactly who this offer appeals to.
First off, what are the benefits of having this long-stay visa to the retired expat? Well, apart from saving yourself nine annual trips to your local immigration office over a ten-year period, there aren't any. Not that I can see.
There is no complimentary immigration fast track at Bangkok Airport. There are no discounts on rounds of golf or free spa treatments. You are purely saving yourself nine trips to immigration. Actually, several articles have stated that the proposal is for 'five years plus five years' rather than ten years straight - so reading between the lines, you will need to re-apply for this visa in year six as well. Therefore, you're saving eight visits to immigration and not nine.
Retirees on the long-stay visa will still have to do the 90-day reporting. Nothing has changed there.
Let's take a look at what you need to have in order to qualify. You need a monthly income of at least 100,000 baht or a minimum of three million baht deposited in a Thai bank account. That three million baht - and here's the rub - must remain in your account for at least 12 months after the initial application.
Now I'm no financial investment whizzkid or economist, but three million baht sitting in a Thai bank - making virtually nothing in interest - must surely have an 'opportunity cost'. Even in a world of shocking investment possibilities, there must be something relatively low risk out there that's going to yield a 4-5% return in one year. So even at 4% interest, that three million has an opportunity cost of 120,000 baht.
120,000 baht sounds like an awful lot of potential money to 'lose' just to save yourself eight trips to immigration. This year, when I did my 12-month renewal based on retirement, I was in and out of the office in 45 minutes. Job done! And the paperwork really wasn't that much of a hassle either.
Let's dispel a couple of myths.
This has been hailed as a scheme that will appeal to 'affluent expats of retirement age'. Three million baht? It's about a 100,000 dollars or 70,000 pounds. As one expat on Twitter succinctly put it - "I would be shitting myself if I reached retirement age and didn't have that sort of money behind me"
Secondly, and despite what you may have read on expat discussion forums full of worryworts, no one has officially come out and said that this proposed 10-year visa will replace the existing retirement visa system where you turn up at immigration once a year and show evidence of a bank account with at least 800,000 baht in it. Anything along those lines is purely idle and misinformed speculation at this stage.
Who needs out-patient cover?
A second requirement is health insurance and this is where the long-stay visa gets even less appealing (if that were possible). According to the Bangkok Post article, applicants must have health insurance coverage for at least US$1,000 for outpatient care and US$10,000 or more for inpatient care per policy per year.
Now whilst everyone should obviously have adequate health insurance coverage, many don't consider the substantial increase in the cost of an annual premium to be worthwhile to include out-patient visits. Out-patient treatment in Thailand is cheap. Out-patient visits are for coughs and colds, clicks in your elbow and peculiar skin rashes. You buy health insurance to protect you against the nasty stuff - the motorbike accidents and the sudden illnesses that are going to see you in a hospital bed for days on end.
Therefore, we have the opportunity cost I mentioned earlier - the result of having three million baht of dead money in the bank - and then the increased cost of a health insurance premium that you probably don't need.
I am genuinely struggling to see who this ten-year visa appeals to. What have I missed? Could someone enlighten me?
The excellent Khao Sod website has just put this article online and you could say the plot thickens. I quote:
Applicants must not only leave 3 million baht untouched for one year in a time deposit, but they cannot withdraw more than 50 percent, which they must show proof was spent in Thailand for such as medical, property, tuition or similar expenses, according to the resolution. Want to renew it five years later? Visa holders must again show 3 million baht in the bank or an income of at least 100,000 baht per month.
Let's revisit our opportunity cost again. So at least 1,500,000 baht must be maintained at all times. Over 10 years and weighing that money up against a modest 4% return elsewhere, the opportunity cost becomes 600,000 baht. Oh wait! I haven't factored in compound interest. 4% a year for 10 years. Make that 720,000!