Thailand Smart Visa Dec.24 updates. Many fantastic changes
Updated: Jun 30, 2019
EXECUTIVE SUMMARY: The requirements to lock up money in a thai bank for a year, thus requiring a visa applicant to bring even more money for the startup itself and their living costs are now gone, now harmonized with similar requirements to a retiree visa where adequate funds must be held in the foreigner's home residence account for at least 3 months prior. Requirements to participate in an approved accelerator/incubator program can now be sidestepped via govt agency approval. On the investor side, it is now possible to apply for a visa if investing from a venture capital company (however the entity investing must be from Thailand) and for angel investor types, they have moved this to it's own category. There is a new much more lenient 6 month option without a funds requirement that seems both geared towards nomads using Thailand as a temporary base or team outing and those running startup bootcamp/accelerator type programs. The visa also seems designed to be easily transitioned to a full SMART visa once the program has ended and presumably the companies have secured investment :) Salary requirements have also been lowered across the board for employment based visas. The only (relatively minor) flaw that remains across visa categories is that the applicant only has a choice between their home residency or Thailand in terms of banking for proof of funds. This should be changed to allow for wherever the applicant's business declares their business banking to be as there are many reasons to locate banking in a different jurisdiction to one's residency, further outlined later in this article. Three new categories have been added - Alternative Dispute Resolution, Human Resource Development in Science and Technology, Environmental Management and Renewable Energy
All changes can be reviewed at the official source here - https://www.boi.go.th/index.php?page=detail_smart_visa
EDIT 2: June, 2019 I have been informed by the BOI that now the startup money is allowable from any country as long as it can be proved that it's been in the applicant's legal possession for at least 3 months
The initial announcement was a bold and lauded step from the Thai govt which garnered praise for it's strategic goal but criticised by many whom the visas were aimed at in terms of the fine requirements and policy details that made practically every category unworkable. As expected the take-up rate ended up being quite low and in the middle of last year the Thai govt reached out to a handful of representatives from the digital nomad community for feedback. This was a much faster reaction for review before say, the Canadian equivalent startup visa which saw over 2 years of under-performance before policy review. Digital nomads themselves are not all high tech workers, some of the developer types and those who have worked at Silicon Valley or other global tech experience do bring some of the skills needed towards the "targeted industries", however other nomads work more everyday jobs to fund their time overseas such as English teaching, crypto trading, web design or admin-related roles assisting others with their online businesses. Later in this article will I will outline the changes since the initial announcement.
When I sat down last year with Ms Kantarot Laopradith of the BOI's (Board of Investment) SMART Visa unit, she made it clear that at least from their office there would NOT be a "digital nomad visa" as many had hoped this would be but instead they would prefer many nomads to up their game and become qualified enough to help Thailand with the targeted industries. In other words, to contribute to the Thai economy. Given my prior history and experience with the US Startup Visa effort and the congressional deadlock that came with getting any immigration reform done, going from a chat to virtually every flaw addressed and recommended changes being implemented (much that I'm sure was shared by other related interests, incubators, investors, IGLU etc) is nothing short of remarkable in terms of speed of execution. There are many long time expats and Thai citizens who see little to no hope for any positive direction from the govt and otherwise feel that even daring to think of better is futile. In this case they have been proven wrong and the govt ministries involved are working in agile fashion and moving faster and more on-point than their counterparts in the western world.
For anyone reading this not familiar with the Thailand SMART visa at all especially as so far as I've focused on the more startup visa-like aspects, it is not a singular visa at all but a family of visas encompassing employment-based visas (including both skilled and executive) as well as investor and startup company categories
Changes and Updates
Smart T (Talent) - This is the category for highly skilled professionals. Previously the minimum monthly salary was very high, 200,000 baht which at the time was around $5000 USD but with the weakening of the USD at the time of writing is now closer to $6400. This has now been reduced to 100,000 baht and potentially as low as 50,000 baht (in case of the experts having an employment contract with a startup, or retired experts having endorsements from a relevant agency). The 50,000 baht threshold is still troublesome but at least there is room for agency discretion acting similarly to the equivalent of "officer's discretion". At immigration offices worldwide, this can lead to all kinds of wildly different standards, skewed and unfair results with some inevitably having an easier time than others. At the agency level this can be standardized though I would argue, 50,000 should be a guaranteed standard for any pre-revenue startup. I would prefer it to be as low as 30,000 given that this is already double that of a livable salary for new Thai graduates in most of Thailand but 50,000 is more adequate for Bangkok level. In general there needs to be regional tiering of policies between Bangkok and the rest of Thailand and possibly even further granularity than that similar to how the US has different federal and state minimums but that is a different and much bigger discussion.
Smart E (Executive) - No change. Any senior or C-level exec salary is still 200,000 baht which is would seem quite low by comparative international norms but in terms of local Thai purchasing power would be similar to six figure compensation in developed countries. Holding rank and file startup employees to the same standard prior did not make sense.
Smart I (Investors) - The previous amount of 20 million baht stays the same (just under $650k) but is now relevant only for venture fund companies only. Individual investors/angels can now quality with just a 5 million baht investment ($160k). This is a little high but the current weakness of the USD is contributing factor also. Otherwise this is much more in-line with standard angel investing norms. There is a requirement that the venture capital company be Thai which does not have developed investment banking sector domestically like New York, London and other financial sectors nor is it competitive from a capital gains standpoint compared to other competing jurisdictions like Singapore, Hong Kong, Cayman Islands and so on. However the relatively low fund size makes it relatively easy to allocate a portion of funds under management for Thai investment use and the fund size lines up in terms of expected regional investment strategy norms. These requirements may also give Thai banks business and the need to create a viable investment banking sector, create expected international standards such as deposit insurance and keeping the capital of their big winners inside the country instead of going out to Singapore or Hong Kong for a long-term win for the country.
Previously the visa only allowed for people investing out of their personal accounts, which no professional investor would do and even "super angels" shy away from. The previous amount was also quite high at 20 mill baht. At the time of consultation I was told there hadn't been a single investor visa yet granted and it's not hard to see why. The amount and requirements sat in strange no-man's land between being far too high for any angel check (usually $60-250k at most), too low for any organized fund and possibly only fitting a syndicate angel lead investing on behalf of others like a "micro-VC".
Smart S (Startups) - Most of these changes have been covered in the executive summary but there is still some additional nuance and detail to be said here.
As mentioned previously, the 1 year fixed deposit requirement is now gone, presumably this was in place so people couldn't just do the "money for show" thing and then take it out after. Instead this has now been replaced with a requirement that the applicant must demonstrate adequate funds in the foreigner's home residence account OR in Thailand for at least 3 months prior. The amounts are still the same (600,000 baht or just under USD 20k) otherwise at 3 months is a reasonable compromise between safeguarding against that and not inconveniencing a startup to the point of requiring a startup to invest as much as double the required amount in order to even have operational funds.
There is a new much more lenient 6 month option without a funds requirement that seems both geared towards nomads using Thailand as a temporary base or team outing and those running startup boot camp/accelerator type programs. The visa also seems designed to be easily transitioned to a full SMART visa once the program has ended and presumably the companies have secured investment
A VERY welcome change is the option to be certified by a relevant govt agency as being such as DEPA for those that don't need or don't want to participate in accelerator/incubator programs, previously an applicant in the worst case scenario, would have have had to potentially give up some equity or participate in a program that they otherwise wouldn't need other than for visa purposes.
The existing scheme of 1 year for the initial visa and 2 years on subsequent renewals once a company is established remains the same.
Lastly there is now a requirement that applicants purchase/show health insurance in line with all other long-stay visas.
Only one more change really needs to be made and as mentioned in the executive summary, its a relatively minor one. Whenever there is a requirement for proof of funds, this should be amended to allow for a bank account location where the applicant declare their business banking to be. This would recognize that there are often more favorable or standardized banking locations and financial centers around the world (NY, London, Switzerland, Singapore and more) and applicants also may not always originate from a country with stable or reputable banks and may be as a matter of standard practice, bank in better location outside of their country. In the past countries like Greece and France have had governments that have raided their own citizens' deposits to try and settle their own insolvency and Thailand itself has been through it's own banking crisis which precipitated the Asian Crisis in the late 90's. With that history in mind, this should be a consideration that is easy to understand for Thailand. This would also allow for the scenario of a head office/parent company setting up a branch office in Thailand as a startup. Ultimately countries win when they have the head offices of companies and not the branch offices but given the decades long track record that Thailand has of visitors turning expats after falling in love with the country I am confident that Thailand stands a great chance of turning branch offices into head offices in time :)