How to Become a Tax Resident in Thailand as a Remote Worker
You’ve done it. You earn your income entirely remotely, allowing you to work from home—or anywhere you like. You’re on the path to greatness.
Next, it’s time to think about your long-term goals. The truth is, many so-called “remote workers” and “digital nomads” fail to realize the greatest long-term benefit of the expat lifestyle—you have the mobility and freedom to relocate abroad, immerse yourself in a foreign culture, and live life on your own terms in the country of your choosing.
You can even become a legal, tax-paying resident abroad, receive government benefits, and apply for permanent residency and citizenship.
Thailand is a natural first option to consider for your remote work home-base. Bangkok and Chiang Mai—the “twin cities” of the digital nomad movement—rank consistently among the the top cities in the world for digital professionals looking to work remotely abroad, due to Thailand’s famously low cost of living, high quality of life, and attractive lifestyle affordances for every age and taste.
And there are options available in 2022 allowing you to do it all legally.
In this article, we offer 5 tips for obtaining long-term tax residency in Thailand as a remote worker or digital business owner.
Establish Tax Residency in Thailand
Despite the prevalence of “digital nomads” in Thailand, it is technically illegal for foreigners to work in Thailand without a valid visa and work permit, sponsored by a Thai company. That much is clear in Thai law.
The penalties for non-compliance can be harsh, so it is recommended that you seek a legal and compliant relocation solution. You want to avoid inappropriate visa types like education or volunteer visas, which do not confer the right to work and can tarnish your passport in the eyes of Thai immigration.
If you are a tax resident “nowhere”, then you are most likely actually a tax resident in your former home or country of citizenship. This can cause problems down the road if you ever audited by your country of citizenship and need to verify your tax residency abroad.
What you want is to become a legal tax-paying resident in Thailand, with a valid visa and work permit, and participate in the Thai system. This way you can apply for a credit card, auto loan, etc. in the future, and build a good credit score in Thailand.
Depending on your citizenship, you may even be exempted from paying income tax in your home country. Factor in Thailand’s low effective tax rate and territorial stance towards foreign-earned income, and you can make relocating a great way to save money for your business while exploring a new country.
So how do you become a legal tax-paying resident of Thailand, on a valid visa and work permit?
Partner With an EOR
In recent years, more and more freelancers and digital business owners are choosing to partner with employers of record (EOR) to handle their visa, work permit, and general employment during their stay in Thailand.
The EOR sponsors your business visa and work permit, pays your taxes in Thailand, and processes your monthly payroll as your local employer. They handle all the back-office administrative and HR services for you, so you can find the perfect life/work balance while getting used to your newly adopted home.
You want to find an EOR with a flat monthly fee, no hidden costs or unexpected fees, and all questions answered upfront. Be sure to read reviews on Facebook or elsewhere online.
Remember—you are choosing a long-term partner, so don’t settle for second best. If something feels off, it probably is.
Get Free Healthcare Through Thai Social Security
A big benefit of becoming a tax resident in Thailand is that you receive free government healthcare through the national social security system.
Thai government health insurance is a good option to have, either on its own as a backup to private insurance. You are assigned a local hospital where you can receive treatment and free yearly health check-ups at no cost. At other public hospitals you must pay up-front, but the costs will be reimbursed to you later by the Thailand social security office.
If you’re already working online in Thailand, then the likelihood is that you don’t have a work permit or business visa. This means you are not paying into the Thai social security system, which is the safety net which you could rely upon should you ever find yourself in need of medical services.
Working with an EOR, you are entitled to the same social security healthcare as Thais—with some dental to boot.
Incorporate in a Tax-Friendly Jurisdiction
Depending on your corporate structure (or lack thereof), you may want to consider setting up a company in a tax-friendly jurisdiction in Europe or Asia, such as Estonia, Cyprus or Singapore. This can be a great way to optimize your business, increase your bottom line, and achieve more professional freedom.
With the right international structure, you can save a lot of money by reducing your corporate tax and personal income tax bill. Thailand has a relaxed position with territorial tax, so only your EOR income is taxed in Thailand. That means your foreign-earned income can be brought into Thailand completely tax free, provided you don’t bring it into the country within 12 months of earning it.
In many cases, the incorporation process can be done entirely remotely, including paperwork and setting up a company bank account.
Get on the Path to Permanent Residency
Permanent Residency (PR) is a holy grail of sorts in Thailand. It allows you to stay in the Kingdom permanently, without needing a visa.
Next to Thai Citizenship, PR ranks second in the upper echelons of Thai residency options for expats.
With most visa options, such as the Elite Visa, Smart Visa, and Education Visa, the time you spend in Thailand is not invested into longer-term residency options such as PR or Thai citizenship. After the visa expires, you are back to where you started.
Ideally, you want the time you spend in Thailand to add up to something. This is why partnering with an EOR, who can help you meet the eligibility requirements for PR, is a smart choice for those with long-term aspirations in Thailand.
Some, but not all EORs will offer to support you on the path to PR in Thailand, so be sure to ask upfront if this is of interest.The requirements are: 1) 3 consecutive years on a non-immigrant visa and work permit in Thailand, 2) 2 years at a monthly salary of 80,000 THB or more, and 3) 1 year working for the same Thai company.
The PR application process is known to be cumbersome, especially if you do it on your own. It is recommended that you hire a PR agent with a good deal of experience in this process and hopefully connections on the PR board—someone who can grease the bureaucratic wheels, so to speak.
Bring Your Family
Best of all, the remote work dream in Thailand is not restricted to the free and single. An EOR-sponsored business visa allows for connected dependent visas, so if you have a spouse and/or children, you can bring your family along for the journey with you.
You want to be careful, as some EORs will charge steep but unnecessary “application fees” for dependents (or other variables in your situation) when there is really not much more paperwork involved for them. It’s just a way for them to sneak in hidden fees – and it likely won’t be the last.
You want to an EOR that charges a flat fee that covers everything, including dependent visas, so that you get caught off guard by hidden costs and surprise application fees.
Do bear in mind that dependents are not covered under Thailand Social Security (unless they obtain a work permit) and may require private expat health insurance.
Get a Free Consultation
If you are interested in relocating to Thailand, Shelter is the leading Thailand EOR provider for freelancers, startups, and remote workers. We handle all the legal and tax matters for you, so you can focus on what matters most.
We are proud to provide a full service experience:
- Flat fee
- No hidden costs
- No cost for dependents
- International incorporation
- Path to permanent residency
Contact us to learn more about our Thailand EOR service.