How To Make A Good Living In Thailand
Introduction
You've been to Thailand and fallen in love; either with a beautiful Thai lady or Thailand itself. You've made the decision to move to Thailand. But the big question is how do you finance it? Well before you figure out how to finance
it you need to figure out how much money you need. In this article I lift the lid on some ways to fund your stay in Thailand.
How much is enough?
Let's say you are going to move to Bangkok. How much you need depends very much on the kind of lifestyle you typically lead and want to lead in Bangkok. If you want to have a big, posh apartment you'll pay more. If you want to run
a car you'll need more. One man's lavish lifestyle is another man's subsistence level existence.
I am going to shock a few people by saying I recommend at least 70k baht per month (BPM)! It is possible to live on less than 70K in Bangkok, and much less in the provinces. I would say for Bangkok you need to be earning an absolute minimum
of 35,000 BPM these days. Yes, I know it is possible to live on less, but frankly who wants to?
The Thai government believes you should have at least 60,000 BPM to live on, as that's about the minimum for a retiree visa that you'll need to have. You can definitely survive on 35k (or even less), and you can even participate
in various activities on that budget but I don't think it's easy and you will have to compromise on quality of apartment. Plenty of people will recount tales of some guy who lives on 20k BPM and the Thais manage on even less, but it's
a frugal existence. In short you will have constraints on the sort of lifestyle you can lead, and that's contrary to the whole idea of going to Thailand in the first place, which is to have a great lifestyle. <Please remember that some people like Thailand as it is cheap – and they do not have a lot of money so it works for them. Not everyone is here to live it up – Stick>
On a personal note, in my opinion visiting or living in Thailand is about being able to enjoy the best of what Thailand has to offer, according to tastes and interests. For example I am a keen golfer, so being able to play at some great courses
in Thailand is something I like to do. Likewise with Scuba diving, I like to be able to take courses to extend my diving skills and travel to the top diving spots to experience them. Bangkok is a hub of Asia, and being able to travel out to places
like Singapore, Bali and Philippines is something that is definitely a must on my agenda. If I don't have the money to do that what's the point of my being in Thailand? You don't need massive amounts of money to do this (which is
one of the advantages of Thailand), but I do believe you need more than 35k BPM.
One of the reasons people move to Thailand and don't have the lifestyle they envisaged is because they take jobs that pay a pittance. The truth is they don't need to, as I'll discuss later in this article. So having established
that you can survive on 35k BPM, but should probably be aiming for at least 70K, the question remains: how do you earn that much money in Thailand?
Teaching English
The thing about the 35k BPM threshold is interesting because that is the typical salary that an English teacher will earn in Bangkok. Some earn more and some less, but it won't be too far off this level. It's supply and demand.
There is plenty of supply, some would say too much, and that keeps salaries low. Some teachers find they can't live on the salary and move on.
Many Westerners who end up teaching English in Thailand only do it as a stop-gap, and after a year or so of exploring Thailand move on to other countries. Some Western "teachers" are poorly qualified and use the work as a means
to finance their bar-hopping escapades. This doesn't create a very good impression of Westerners amongst the Thais, or even with their Western colleagues. It has been said the quickest way to get rid of a Thai girl is to tell her you're
an English teacher!
Expectations from the Thais and indeed the Western teachers themselves are often not high. Even if you carve out something of a career for yourself, your salary will be lucky to push 60k baht. On the whole, for these reasons and others, the
TEFL job market is not really "the best you can be" in Thailand.
Before I get howls of protest please don't get me wrong. There are some very talented and dedicated teachers in Thailand and the Thais are very lucky to have them, but unless you are a dedicated and patient teacher, think twice about
choosing TEFL in Thailand as your next career. Always ascertain the motives of anyone who tells you otherwise.
It really does boggle my mind when qualified and highly-skilled individuals give up fantastic professional careers and work for a pittance as an English teacher in Thailand; there really is no need for it. I'm not saying teaching is
a bad profession, just that I don't believe people should be (or need to be) doing it as a means to stay in Thailand. If you are a dedicated teacher who loves teaching then that's a different thing altogether.
On a more positive note, if you are looking for a job while you find your feet in Thailand, that gives you a chance to see how Thailand really ticks, and to get a chance to interact daily with Thais, then teaching English makes a good starting
point. Just don't do it for the money!
Teaching in private International schools
Private International schools are a different story. If you can get one of those jobs you are going to be sitting pretty as they usually pay Western level salaries and provide food, accommodation and other benefits. I personally know of several
teachers getting paid in the range £25,000 to £40,000 pa. If you translate that into baht, that's around 135,000 to 216,000 baht per month at today's mid-market rates. Comfortably over our 70k BPM target and a substantial amount
of money in Thailand. Nice work if you can get it, but such schools usually only recruit experienced and qualified teachers directly from Western countries: very often UK, but also Canada, Australia, NZ and USA. <You've clearly got a UK bias here. I would suggest that where a preference exists, at least as many schools prefer Americans to Brits as vice versa – Stick>
If you are serious about teaching in Thailand then you should think seriously about equipping yourself to get into one such school. However, unless you are currently working as a teacher in the West, that will take some time as you'll
need to get a suitable teaching qualification and a few years experience, preferably in a shortage subject area. This is feasible in UK these days as the government is actively sponsoring trainee teachers and there are various forms of incentives
(including financial) that are available (see http://www.tda.gov.ukRecruit.aspx).
Other work
Unfortunately low-paid English teaching jobs represents the bulk of direct employment opportunities in Thailand. There are other jobs that can come up: posts in IT, web design or something similar. There are various miscellaneous jobs such
as management, hotel work or factory supervision. These are also generally not very well paid.
Sometimes if you have sought-after IT skills you might get 45 – 65k baht. Don't count on it though. As a lot of the Westerners who go to Thailand have an IT background there is competition for such jobs too, keeping salaries low. The
problem is you are competing with Thais for many jobs (not to mention Westerners desperate to stay in Thailand at any price) and Thais will accept a far lower salary than Westerners. Also, while Thailand's education system may not be on the
same level as the West, there are plenty of keen, capable workers looking for work and that also keeps competition high and salaries low.
So, on the whole, the opportunities for direct employment that gets us up to our 70K target are few and far between. Networking is very important, so the more people you know, the better your chances are. Luck may play a part too as you might
just have a skill-set that is particularly sought after by a contact. The days of the expat on a mega-package are long gone, but there are a few still around.
Running a business in Thailand
One possible reason for moving to Thailand full-time is to start a business, which may have seemed like only a pipe dream in the West due to excessive capital requirements and red-tape. In fact, you'll find the capital requirements and
red-tape can also be daunting in Thailand. Setting up a (legal) business in Thailand is not for the faint-hearted.
With planned changes to the Foreign Business Act (FBA) and a general (pun not intended) hardening of attitudes to businesses that are controlled by foreigners, it would take a brave man indeed to set up a business in Thailand these days.
In principle, setting up a company in Thailand is very similar to setting up a company in the West. Many of the laws are similar and accounting practices are also similar to USA. However, as soon as foreigners get involved things become complicated
by additional legislature in the shape of the Foreign Business Act (FBA). The FBA specifies a number of restrictions on what foreigners and their businesses can do in Thailand. It also specifies minimum capital requirements, which can be excessive;
for example, for businesses listed in the FBA the minimum capital requirement is 3 million baht and 2 million if it's not listed. There are basically three lists in the FBA: List 1 is totally prohibited to foreigners and lists 2 and 3 require
permission at different levels of authority (and have a mountain of other conditions and exemptions).
Generally, it is illegal for foreigners to own more than 49% of a business – any business. The FBA does contain a complicated list of variations, exemptions and conditions. It's possible for foreigners to still control a company, even
though they have a minority stake in a business, by making their shares carry more votes than the shares the Thais have.
This loophole, or shall we say "legal feature", is also used to allow foreigners to buy and own land (which is supposed to be prohibited). Thai companies are legal entities that can own land in their own right; so if the Westerner
controls the company, he can control the land. The landed property would actually be owned by a Thai company which the Westerner had a minority shareholding in, but majority voting rights.
In the past the authorities turned a blind eye to such practices as it wasn't actually breaking the word of the law. Post-coup things are different and there is a definite mood in the air of getting things cleaned up in this regard.
This is one area where the FBA is likely to undergo some changes.
At time of writing then, it's still not apparent how things will pan out for those wanting to set up a business in Thailand, especially if they are using that business as a means to own land or property. It could be a case of "business
as usual", but others are talking of a situation where foreigners are compelled to "sell down" their controlling shares to Thais. Such a practice is likely to have a very detrimental affect on the Thai economy.
If you do want to set up a business in Thailand the first hurdle will be getting the right visa and paperwork in place. You need to enter Thailand on a Non-immigrant category "B" visa. If you are going to investigate setting up
a business, you are still supposed to go with a cat B, although you can enter on a Visa Exemption, evaluate the opportunities and come back to Thailand on some future date with a cat B. So getting a cat B visa is the first step. The paperwork
and regulations for setting up a business in Thailand are best handled by a local Thai expert or a company specialising in such activities. This is sensible as you will need to be concentrating on actually running your business rather than spending
time on Thai paperwork. This is definitely something that should be delegated. You do still need to keep tabs on entities that you've delegated to, just to make sure everything is in order (don't take anything for granted in Thailand).
There are actually a few options open to you if you are interested in running a locally-based business in Thailand: one is to start a business from scratch, another is to purchase an existing business. A third is to purchase a franchise,
of which there are many available in Thailand. Again there are business brokers who can provide you with a list of businesses and franchises available for purchase.
Which route you choose will depend on your experience and interests and each avenue has its own advantages and disadvantages. One problem with a local business is that you are earning baht, which has inherently less spending power than Dollars
or Sterling. It is much better if you are servicing visiting Westerners (or other wealthy expats) who either pay in Western currency or are prepared to pay a premium for products and services (they are mentally converting dollars to baht and saying
"wow, that's cheap!"). Another option is to create an export business, where you can pull in foreign currency.
If you plan to set up a retail business such as a shop, bar or restaurant, always go through the details of the lease with a trusted expert in minute detail. You need to know exactly where you are with the lease; you need to closely examine
the small print. A badly negotiated lease is the downfall of many an expat business in Thailand (and in the UK too!).
In short Westerners (both in and out of Thailand) are where the money is, so try to target them if possible. The other thing is to try to keep your local employees to a minimum, this helps keep things simple. However, as Thais tend to have
a different work ethic to that of Westerners, you might need to allow for that by adding extra staffing capacity, a real dilemma! On the upside, wages in Thailand are far lower than you might expect, especially for a business pulling in foreign
currency, so you can usually afford a bit of redundancy in the system.
The business of buying and selling businesses
If you have the business acumen, there is also a great business to be had in buying and selling businesses for profit in Thailand. Because many businesses are bought and run by expats without the appropriate experience, those businesses often
under-perform.
Also, many expats get fed up with Thailand, want to move elsewhere, become ill, or simply want to retire back to their home country. This can represent a profitable opportunity for the astute business person, as businesses can then be picked
up on the cheap. In a way you make your profit at point of purchase, because it's the price you pay that will often determine the profitability of the outcome. You can then take the business on and depending on the nature of the business
make it more profitable and 'flip' the business to an eager expat a few years down the line.
Businesses like restaurants, guest houses, export companies and retail outlets are all big hits with expat prospective business purchasers, as they are perceived as "easy" and require relatively little capital. Some reasonable businesses
can be bought for as little as a few hundred thousand baht. You can of course go up to a whole resort, which could set you back 50 million baht.
Additionally, these small businesses can be started from scratch with a view to selling to an expat at a premium a few years down the line. This makes sense for the purchaser as start-ups have a very high chance of failure, whereas a turnkey
business, with a track record of profitability is much more likely to succeed (unless poorly managed). A good turnkey business will give you an 80% to 90% chance of success compared to an 80% chance of failure for a start-up business. That makes
them more attractive to expat business virgins.
In fact, there are virtually unlimited opportunities for creating profitable businesses in Thailand. It's an exciting environment with loads of (as yet) untapped potential. You do of course need to be a capable business person to run
a business anywhere; even more so in Thailand where things don't often work as one might expect.
I do think it's worth spending at least a year or so in Thailand before attempting to set up a locally-based business; it will also help considerably if you speak Thai. Thais will always assume you can't understand Thai and it's
surprising what you can learn in that situation!
One final thought is that if you are going to Thailand for the relaxed lifestyle do you really want to be running a local business? Running any kind of profitable business is a lot of hard work, whether in Thailand or elsewhere. Always be
clear of why you want to move to Thailand and your goals.
Offshore Internet business
This is the PERFECT business for those wanting to fund their stay in Thailand (in my humble opinion). Essentially you have a web-based business that's located offshore (outside of Thailand). Your website could actually be located anywhere.
You provide products and services through your website, with money going into a PayPal or merchant account. There are many advantages to this type of business.
Firstly, it can be administered from anywhere in the world, including Thailand. Equally it lends itself to the lifestyle where you are based in one country for part of the year and perhaps another for the remainder of the year (which is my
favoured option, but that's another article).
Secondly, it doesn't require any special visa or paperwork, as you are not actually setting up a business in Thailand. The business bank account and registration of the business may well be in your home country, so it's of no concern
to the Thai authorities. A Cat 'O' visa is fine and the application procedure for this is much more straightforward than for the Cat 'B'.
Thirdly, the income generated will be, by and large, in Western currencies, so you should be able to convert this at a favourable rate to baht. Each dollar earned has far more purchasing power than a baht earned in Thailand.
One of the best things about a web-based business is it generates income while you sleep. You can be out playing golf, diving, eating dinner or whatever and you can be relaxed knowing that your website is ticking away, generating you income
24/7. Now THAT's the way to run a business!
Note that a web-based business is something that can be done in your spare time, so while you may initially work in Thailand as an English teacher (or whatever), you can be building up your Internet business on the side, and after a year
or so switch to the Internet business full-time. Setting up and running a web-based business is a complex topic with many pitfalls, a lot of westerners try and fail, but it can be done.
Freelance Consulting (and remote working)
This is a great option if you like to go it alone and have a lot of self-motivation.
One of the big advantages of this over running a more traditional local business is that you will be very unlikely to need to employ staff and you will have negligible capital requirements. This obviates many of the problems that business
owners can run into when they employ local staff. While these problems can be solved with experience, you might not want to go down that route, you are supposed to be enjoying life in Thailand, not stressing out over your staff! As a consultant
you will generally have much lower overheads too.
Freelance consulting can be combined with other activities (for example part-time English teaching). It can also lend itself (depending on what area of consulting you decide to specialise in) to being run quite effectively as an Internet-based
business, this is a powerful combination. I class this mode as a special form of Internet-business.
One of the big advantages of being located in Bangkok is that it is an Asian hub, so you can tap into business opportunities in Kuala Lumpur, Singapore, Jakarta, Manila and even parts of China quite easily.
The down-side to freelance consulting to businesses based locally in Bangkok, as opposed to remote businesses, is that you will need to obtain a Non-immigrant Cat 'B' visa and work permit. This is much easier if you have your own
business or can find a "host" company in Thailand to sponsor you. You can then work under the auspices of that company. This is where networking with business owners can prove invaluable.
The other possible negative is getting to the customer's premises. Battling through Bangkok's rush-hour traffic is not the most stress-free way to spend your time in Thailand!
A slightly better way of working is to obtain foreign clients and work remotely. In certain businesses, such as technical writing, computer programming, web design and systems administration, this can be incredibly effective.
I have a friend who writes software for machine controllers, periodically he disappears off to Bangkok for a few months to write some software for a client and combines business with pleasure! It works very well, and he is being paid by Western
clients.
You don't need many contracts at Western rates to have an awesome lifestyle in Bangkok!
Investing and other possibilities
Some people who sell up and move to Thailand have a sizeable lump sum, perhaps from the sale of a house or an inheritance. Sometimes their plan is to live off the interest without reducing the capital sum.
There are several factors that determine whether this approach is viable or not. These are:
- Initial capital
- Rate of return (investment) or interest rates (savings)
- Monthly expenditure
- Exchange rate
- Inflation
If for example your initial sum is £100,000 (which is about the minimum useful in this case) and you are getting 10% returns net, you would have £10,000 per year to live on; a reasonable amount (around 54,000 BPM). But, it isn't quite that easy to get 10% net returns!
There are also further risks that must be taken into account such as currency variations and inflation. If you invested in company shares there are stock market risks and in a year where the market falls by 10% (a so called 'bear' market) you are going to be eating into your capital.
Some carry out "day trading". This involves actively trading in shares on a daily basis, the profit being generated from volatility in certain shares that the trader picks. This requires constantly monitoring share prices looking for quick gains. This can be effective if you know what you are doing, but the stock market is a notoriously tricky thing to predict. Further, constant trading commissions on lots of small trades can eat into your profit.
Whichever method you chose will take very careful management in order to achieve the sort of returns that will give you a good lifestyle in Thailand.
Property
Another popular approach, at least in the UK, is not to sell up but to rent your property out. There is significant (and growing) demand for housing in the UK right now due to very high levels of immigration. Rents are quite high, a two-bed property in a relatively cheap area costing around £650 a month in rent and one-bed flats are not that much cheaper, in some areas you'll be lucky to get a one bed flat for less than £750 a month. In London the rents are generally much higher. However, property markets, like any other market, can fluctuate.
While property is a great long-term capital investment, it's perhaps not the most pragmatic thing if you are hoping to live off the rental income while in Thailand, as you would need to have paid off a good chunk of your mortgage. Out of the rent you also need to pay a management fee, as you'll be sunning yourself in Thailand while they take care of your property. That could be around 10% to 15% of rental income.
However, if you are considering moving to Thailand you may already have paid off (or be close to paying off) your mortgage, then the rental income could be a very nice supplement to other income such as a pension or online business.
Summary
This article has looked at the sort of income you should be aiming to achieve in Thailand. It also reviewed some possible sources of income. Generally you should be looking at earning 70K+ BPM to have a really nice lifestyle in Bangkok. Businesses that are offshore have numerous advantages over businesses locally-based in Thailand. In these days of tele-working via the Internet your skills could earn you a lucrative income. My recommended way of funding a lengthy stay in Thailand is through an online business.
Above all, the work you carry out should always be congruent with your reasons for moving to Thailand.
Stickman's thoughts:
I think you have done a nice job summarising the options available. There are more than a few things I don't personally agree with but I still maintain this is a nice summary.
I think it is really useful for those living in Thailand if they have a couple of income streams. It might be their primary job and investments, their primary job and a part-time job….or whatever! You never quite know what is going to happen in Thailand next and nothing should ever come as a surprise. More than one income stream helps to insulate you from any unforeseen events.
FWIW, my monthly expenditure including rent, all bills, running rhe car, going out etc runs around 50,000 baht a month. If you factor in buying toys like computer and camera bits and pieces, it is probably about 60,000 baht a month or so. Your 70K baht figure is, IMHO, a good indicator.
