Thailand has always been a favourite among those looking to take a vacation or move there permanently. Since more and more multinational companies are setting up shop in Thailand, the country is becoming increasingly appealing to expatriate digital nomads.
Cities and villages around Thailand, from the coast to the mountains, are sprouting expat communities to accommodate the growing numbers of foreign workers and retirees.
Colliers Thailand and the Employment Department estimate that there were 156,596 foreign nationals residing in Thailand during the first three months of 2023, with more than half of those people residing in Bangkok.
In 2022, citizens of Japan, China, and India made up the top three, and recent news indicates that Chinese citizens are increasingly purchasing condos in Thailand.
The Tourism Authority of Thailand (TAT) has designated 2024 as the Year of the Expat because of the special treatment this demographic will receive. After the epidemic, there has been a change in the tourism industry towards longer stays, and businesses are looking for ways to capitalise on this.
The TAT governor, Thapanee Kiatphaibool, recently said that the agency is working on implementing a number of long-awaited incentives for foreign residents of Thailand. These include, but are not limited to, reduced entrance fees to national parks and other attractions, as well as other benefits.
Ms. Thapanee stated that throughout Thailand, promotional efforts will highlight workstations, or locations that blend work and vacation, to highlight the special working environment in Thailand.
Digital Nomads on the Beach
Koh Samui, Koh Phangan, and Koh Tao are the three most popular islands in Surat Thani for remote workers and digital nomads.
According to Ratchaporn Poolsawadee, president of the Tourism Association of Koh Samui, “the beautiful nature and local culture, as well as various types of accommodation at different price ranges,” attract both short-term tourists and remote employees.
He stated that between 10,000 and 15,000 digital nomads were residing on the three islands with tourist or other non-immigrant permits.
Mr. Ratchaporn believes digital nomads are a great way to boost the islands’ economy because they tend to spend more money than locals and bring in customers during the off-season.
He said that the Russians and Europeans like the French made up the bulk of his market.
Since they can keep working from abroad, many Russians have taken refuge in Thailand throughout the conflict in Ukraine. Mr. Ratchaporn identified freelancers and online business owners as part of this group.
The Real Estate Information Centre (REIC) reports that in the first six months of 2023, Russians transferred 702 condos worth a total of 2.55 billion baht, placing them in second place nationally.
Facilities such as apartments, cafes, and shared workplaces are mushrooming to meet the needs of those on long-stay and non-immigrant visas, he said.
Mr. Ratchaporn acknowledged, however, that some international offenders have made Samui their home base while their visas are still valid.According to him, officials responded to this scenario by increasing security.
Japanese enterprises in Thailand
“Thailand has long been a favourite investment destination for Japanese companies that produce auto parts, computers, and food products because of strong facilities built for these manufacturers,” said Hitoshi Sato, managing director of TDC International.
The Board of Investment (BoI) reports that in 2022, Japanese applicants won 293 projects worth a combined 50.70 billion baht, more than any other country. According to the BoI, there is still a significant amount of investment demand from Japanese enterprises in Thailand.
To offset the disadvantages of slow economic growth and a weak yen, many companies have stopped relocating executives from Japan and have instead hired Thai nationals for managerial or comparable jobs since the outbreak, he said.
Mr. Sato predicted that the number of Japanese retirees and expatriates in Thailand will decrease if the weak yen persisted for another 5-10 years.
Meanwhile, he noted, the rise in Chinese investment in Thailand, particularly among electric vehicle (EV) manufacturers and technology enterprises, has resulted in a corresponding increase in the number of Chinese expats.
Industrial estates in Rayong province, which is a member of the Eastern Economic Corridor (EEC), have attracted primarily Chinese investors. The REIC reported that in the first six months of 2023, the Chinese market accounted for 3,448 condo transfers worth a total of 16.9 billion baht.
Long Term Leases in Demand
According to Krit Techasumma, managing director of Origin Nationwide, a developer specialising in condominiums outside the Bangkok metropolitan region, both investment and the number of foreigners in the EEC have grown rapidly since the end of the pandemic.
Mr. Krit stated that electronics, biofuels and biochemicals, and electric vehicles make up the top three industries. Companies from Asia, especially Japan, China, and South Korea, are the EEC’s most common source of new members.
Long-term leases of 1 to 5 years and shorter-term rentals of 3 to 6 months have both seen an uptick in demand as a result of investment and employee relocation. Rayong and Si Racha make up 70% of Origin Nationwide’s property portfolio, with the remaining 30% catering to Thai nationals.
He anticipated a 5-6% rental yield for both Notting Hill Rayong and Hampton Sriracha. Si Racha rental properties have an occupancy rate of 70-80%, whereas Rayong rental properties have an occupancy rate of 65-70%.
“Though the global slowdown could impact the real estate segment, the housing segment in the EEC remains resilient,” said Mr. Krit. A 4.7% GDP estimate for the three EEC provinces is greater than the 4% GDP projection for the country as a whole.
He is confident about continued expansion thanks to the city’s investment in new public facilities including the U-tapao airport, high-speed train link, and Laem Chabang Port.
Mr. Krit argued that the government should keep trying to entice overseas investors while also thinking about how to collect the necessary taxes. He suggested that the EEC build additional attractions to entice more spending from expats and inbound tourists.
Digital Nomads in Northern Thailand
Chiang Mai has been a popular retirement destination for foreigners, but its reputation has taken a beating from PM2.5 air in recent years.
The province known as the “Rose of the North” has the worst air quality of any in the world this year.
Japanese retiree Sumitoshi Nishida, 72, who has resided in Chiang Mai for almost a decade, stated that the pollution has hampered inbound tourism for over a month.
Mr. Nishida is one of about eighty retirees from Japan who make up the Chiang Mai Longstay Life Club.
Some tourists leave for their home nations for a couple of months until the air clears, he said.
Mr. Nishida has stated that he thinks Chiang Mai is still the ideal location to live because of the low cost of living, pleasant weather, local culture and cuisine, and high standard of medical care and recreational opportunities available.
He also noted that the retirement visa’s funds requirement of 800,000 baht was reasonable in light of other Asian retirement systems.
Mr. Nishida speculated that the number of Japanese retirees in Thailand would decline as a result of the increase in the retirement age in Japan to 70. He thinks Thailand can profit from retirees who desire to travel for a short period of time (often one or two months).
According to Mr. Nishida, most Japanese retirees who visit Thailand do so permanently if their health permits.He exp lained that this is because Japanese health insurance does not cover treatment abroad, prompting the patients to return home when their health deteriorates.
Mr. Nishida, a foreign retiree, expressed his wish that the government would improve traffic conditions and the quality of roads, sidewalks and zebra crossings in Chiang Mai, which is one of the most dangerous towns in Thailand.