While I often talk about how modern and secure the Thai financial system is, I still think as an expat it’s a good idea to have some assets outside of Thailand. The saying, “Never put all your eggs in one basket” is applicable to FIRE followers no matter where they are in the world. Diversification is the only free lunch when it comes to managing risk with investing.
The Thai asset management companies that I talked about here do have funds that invest internationally. The problem with those is they usually just invest in other funds and then add-on their own fees. It’s much cheaper in the long-run to invest in international funds directly yourself while getting the added benefit of having some of your assets outside of Thailand.
You can only deduct 30% of your salary for LTF and RMF investments, so I like to send whatever I save on top of that outside of Thailand. For example, 30% into LTF’s and RMF’s and 30% outside of Thailand. I’ve never had a problem sending money out of Thailand when showing my work permit.
Keep taxes in mind when investing internationally. US dividends have a 15% withholding tax while UK dividends have no withholding tax.
For the do-it-yourself investor, it’s often difficult to find an international broker that will accept customers who live in Thailand. After contacting numerous brokers only to be told they don’t accept non-resident accounts and seeing the fees of ones that do, I’ve found Interactive Brokers to be the best for international investing (if you open an account from this link I will get a commission). They are one of the lowest cost brokers in the industry and offer dozens of markets around the world. Everything is done electronically so there’s no need to send forms back and forth by regular mail, even to open an account or withdraw money.
Unfortunately, it is not easy for Thai citizens to use a brokerage outside of Thailand. The Bank of Thailand usually requires Thai citizens to be accredited investors, which means they must have 1 million USD (30 million Baht) in assets. Occasionally, capital outflow restrictions are relaxed when the Central Bank wants to reduce the value of the Thai Baht, so it’s worth checking the current rules.
As a foreigner, you can send US Dollars directly to Interactive Brokers from UOB in Thailand without any intermediary bank. This saves you money on fees and your funds are usually available in just a few hours after you initiate the transfer. You need to make sure the bank understands you are sending money to your own account when using the ‘return of savings’ reason as a foreigner, similar to sending money to your own account at another bank. An account confirmation letter is available from their online account management system and don’t forget your work contract or a salary confirmation letter from your employer. Withdrawing funds takes only a few clicks.
Interactive Brokers is truly low-cost. They charge half a cent per share commission for US markets (yes, that’s $0.005 USD per share!) with a minimum charge of $1.00 USD. Transactions on the London Stock Exchange are a flat 6 GBP for any transaction under 50,000 GBP (don’t forget the 0.5% stamp duty tax that everyone has to pay on purchases on the LSE). Market data is charged separately, which means if you’re not going to do any buying or selling for a while or if you have access to data somewhere else, you can turn it off to save money on fees. Also, they don’t charge any inactivity fee on accounts greater than $100,000 USD.
For FIRE followers who only purchase or rebalance a few times per year, this is absolutely perfect. You can turn off your market data when you don’t need it, and with no inactivity fee, the total fee for your investment account is zero. There’s nothing lower cost than zero cost. Even the cheapest automatic robo-advisor services like Betterment and Wealthfront charge annual fees.
When you search on the internet for reviews of Interactive Brokers you will often see comments about their customer service. I’ve never had a problem when I’ve needed to contact someone either by phone or over their secure messaging system. They have offices around the world so it doesn’t matter what time of day it is, you can always talk to a real person on the phone. I’ve called their offices in Hong Kong, Australia, and the UK and have only received great service.
Their Trader-Workstation platform has a steep learning curve, but their webtrader is easy to learn how to use. Like any other broker, your account is completely self-directed so there’s no one giving you investment advice, although they do have advisors available for an extra fee. Interactive Brokers is geared towards more experienced and active traders, but I’ve never had a problem with my FIRE focused account.
Infinity Solutions and Tilney Bestinvest
If you’re too busy to come up with your own asset allocation or need a professional to help you figure out which funds to invest in, it can be a nightmare trying to find somebody reputable in Thailand.
I have a few friends who are with Infinity Solutions and I’ve attended many of their investment seminars in Bangkok over the years. Infinity Solutions are independent expat financial planners and they have offices all around Asia. They will first find out about your financial goals and level of risk tolerance and then put together a tailored diversified portfolio to help you meet your goals.
Once your asset allocation is determined, your money is invested with Tilney Bestinvest, which is a market-leading investment service in the UK. Knowing your money is with a trusted management service outside of Thailand can give you peace of mind. Bestinvest manages over $6.3 billion USD and has over 50,000 clients. They take their clients in Thailand seriously and regularly fly to Bangkok to give seminars and answer questions.
A lot of people who want to invest have no idea how to get started and are too intimidated to open their first account. We’ve shown you can easily open an investment account at any bank branch in Thailand with as little as 2,000B (65 USD). Investing outside of Thailand is a bit more tricky, but if you have the knowledge and want to spend the time managing your own investments, Interactive Brokers is a good option for Thai expats. Infinity Solutions and Tilney Bestinvest provide reputable financial and investment services for expats who would like the assistance of a professional.
Click here to find out when you can retire.
Please read the disclaimer. I am not recommending any specific investments or companies. I am only sharing my personal experience and opinions. Investments are not guaranteed and you may lose some or all of your money. Obtain professional advice before making any investment or financial decisions.