Onshore Versus Offshore

[radioguy1450]

I know squat about finances so bear with me.

It seems there is about a 10 percent difference between the offshore and onshore rate. So does this mean that when I come to Thailand in September I should bring an extra 10,000 US dollars with me and turn them into Baht. Then when I get back home--convert them and make 10 percent.

Or will bank fees and the like eat up all the profit? Or am I missing something obvious that makes my scheme dumb.

[Nongwahyay]

I know squat about finances so bear with me.

It seems there is about a 10 percent difference between the offshore and onshore rate. So does this mean that when I come to Thailand in September I should bring an extra 10,000 US dollars with me and turn them into Baht. Then when I get back home--convert them and make 10 percent.

Or will bank fees and the like eat up all the profit? Or am I missing something obvious that makes my scheme dumb.

..............are you serious??????.............

[rainman]

I know squat about finances so bear with me.

It seems there is about a 10 percent difference between the offshore and onshore rate. So does this mean that when I come to Thailand in September I should bring an extra 10,000 US dollars with me and turn them into Baht. Then when I get back home--convert them and make 10 percent.

Or will bank fees and the like eat up all the profit? Or am I missing something obvious that makes my scheme dumb.

You mean, come here and change 10,000 USD into 336,300 Thai Baht (today's Bangkok Bank exchange rate), then take 336,300 Thai Baht back outside and get 10,741 (XE.com's offshore exchange rate)? You'll be deducted maybe another $100 in fees so you'll end up making $500-$600 the most. If you get a bad exchange rate in either Thailand or offshore, barely anything. If the markets change by a lot during the time you've exchanged the funds here and you're back in your country, you might even lose money. Its an idea, but you should keep the fees in mind.

[onethailand]

I know squat about finances so bear with me.

It seems there is about a 10 percent difference between the offshore and onshore rate. So does this mean that when I come to Thailand in September I should bring an extra 10,000 US dollars with me and turn them into Baht. Then when I get back home--convert them and make 10 percent.

Or will bank fees and the like eat up all the profit? Or am I missing something obvious that makes my scheme dumb.

You mean, come here and change 10,000 USD into 336,300 Thai Baht (today's Bangkok Bank exchange rate), then take 336,300 Thai Baht back outside and get 10,741 (XE.com's offshore exchange rate)? You'll be deducted maybe another $100 in fees so you'll end up making $500-$600 the most. If you get a bad exchange rate in either Thailand or offshore, barely anything. If the markets change by a lot during the time you've exchanged the funds here and you're back in your country, you might even lose money. Its an idea, but you should keep the fees in mind.

Let's put it this way, using a HKD-THB rate because I knew I could get this info easily.

http://www.hsbc.com.hk/1/2/hk/investments/mkt-info/fcy/rates

http://www.bangkokbank.com/Bangkok+Bank/We...es/FX+Rates.htm

In your example, you want to bring USD, buy baht locally, and sell it back in the US. Here, I've just replaced it with HKD as an example.

Your HKD1000 would fetch you 4230 baht at Bangkok Bank.

If, for some reason, you were to buy HKD back because you didn't use your money...

Sell the 4230 baht back to Bangkok Bank, they'll give you HKD959.18.

Sell the 4230 baht to HSBC in Hong Kong, they'll give you HKD972.90.

So surprisingly enough, you would get more back for your HKD by doing the exchange back "home" - but even without any fees or services charges being assessed - straight conversion, you still lost about 2.7%.

Needless to say, if it was realistically possible to make even 0.1% profit by doing what you're proposing, there are hundreds if not thousands of companies and individuals that would be doing this already on a huge scale.

The only way to make money on forex, and that's if you have big balls, is to do short term trades through a forex broker, hoping that the currency will fluctuate in your favor in the course of as short as a few seconds, or as long as a day or two.

Edited August 9, 2007 by onethailand

[Maestro]

...Or am I missing something obvious...

Yes, you are. Give your US bank a call and ask them these two questions:

1. Are you buying Thai banknotes?

2. If yes, what exchange rate do you give me?

Then do your calculations.

--------------

Maestro

[onethailand]

...Or am I missing something obvious...

Yes, you are. Give your US bank a call and ask them these two questions:

1. Are you buying Thai banknotes?

2. If yes, what exchange rate do you give me?

Then do your calculations.

--------------

Maestro

Right.

However, in the US, even if you were to find someone to exchange dollars for your baht, the rate is guaranteed to be much worse than the rates available in Asia.

[Heng]

Actually there are local folks who have been doing the same thing, only on a much larger scale between the LOS and Singapore since this onshore/offshore difference cropped up. Hand carry between Singapore and Bangkok (and often Phuket and Hat Yai) and pocket the difference. The travel costs are indeed minor. What they do is utilize friends and families to make it a proper smurfing operation with no one individual making too many noticeable trips with too much cash. $10-15k USD per trip is still a reasonable amount to take for shopping purchases and is still below the minimum amount "allowed" (which is moot since no one is declaring anyway) so the authorities so far haven't done anything about it.... although I do hear they are going to start tightening that loophole. The margin -so I hear- is about 30-40k Baht per trip for the small operations with higher margins for those using bulk currency smuggling methods.

Although, yes, if you ask on this forum, most folks will say it 'can't be done.'

[onethailand]

Actually there are local folks who have been doing the same thing, only on a much larger scale between the LOS and Singapore since this onshore/offshore difference cropped up. Hand carry between Singapore and Bangkok (and often Phuket and Hat Yai) and pocket the difference. The travel costs are indeed minor. What they do is utilize friends and families to make it a proper smurfing operation with no one individual making too many noticeable trips with too much cash. $10-15k USD per trip is still a reasonable amount to take for shopping purchases and is still below the minimum amount "allowed" (which is moot since no one is declaring anyway) so the authorities so far haven't done anything about it.... although I do hear they are going to start tightening that loophole. The margin -so I hear- is about 30-40k Baht per trip for the small operations with higher margins for those using bulk currency smuggling methods.

Although, yes, if you ask on this forum, most folks will say it 'can't be done.'

Heng, can you show me an example? Like perhaps a forex rate in Sing that would allow this type of transaction to be profitable? Even 30-40K per trip is well worthwhile...

[onethailand]

Actually, I think Heng's right.

I used the TT rates at both Bangkok Bank and DBS - and it turned up just over 6% in profit, not including fees.

1000 SGD will get you 22,268 baht at Bangkok Bank.

22,268 baht at DBS Bank will get you 1063.72 SGD.

However, the maximum amount (in cash) allowed to be taken out of Thailand according to Bank of Thailand regulations is 50,000 baht unless you declare it. That's only about $1,500, not $15,000.

Edited August 10, 2007 by onethailand

[Heng]

Again, I'm not doing this myself so this is all second hand info, and I prefer to make a living while I'm playing tennis, golf, or typing on TV anyway... but I'm told you need to use currency dealers (nothing too shady... just your average Indian or Chinese owned exchange shops in tourist areas) on both ends, not banks. No passport or id required, unlike a lot of banks. Anyway, as mentioned, the margin is indeed there, you just need to bulk it up to cover your overhead (travel costs) AND you need to not have a moral issue with not declaring your carried cash, which to a lot of folks is about as serious as driving over the speed limit. Note, I'm talking about legit cash, and not money laundering.

The actual carry issue is nothing. A lot of serious shoppers who travel between Bangkok and Singapore/HK and gamblers between Bangkok and Macau (including an awful lot of influential people) don't declare either. Have done so more than a few times myself (one way, for deposit) and round trip to go ring shopping with my fiance (bless her heart I got to bring more than half of it back) in Singapore. For the authorities it's like trying to force people to declare if they are wearing silk boxer underwear vs. cotton boxers. $15k USD is nothing carry on wise. It takes up about as much space as a television remote and weighs about 1/3 of a lb. The same amount of Baht is bulkier (you'll probably want/need a money belt), but otherwise only about 1 lb. in total weight.

[think_too_mut]

Just yesterday, I changed 330,000 JPY into THB. Cash in hand, SCB in Bangkok.

Got 928,000THB.

Oanda.com shows I should have gotten 86,000THB.

Before coming back to Thai, I checked what I would get if I sent the money from my JP Citibank account into THB account in BKK. It was 75,000B.

What a difference: 17,000B. That's offsore/onshore diff.

Worked nice to pay big things that were due.

[N47HAN]

A question to the more knowledgeable.....

1,000,000 Thb changed in the uk to sterling.... then sent as sterling through bank transfer back to Thailand would result in a profit ?

[onethailand]

A question to the more knowledgeable.....

1,000,000 Thb changed in the uk to sterling.... then sent as sterling through bank transfer back to Thailand would result in a profit ?

Depends on what rate you get in the UK.

[Maestro]

1,000,000 Thb changed in the uk to sterling.... then sent as sterling through bank transfer back to Thailand would result in a profit ?

See above, substituting “UK bank” for “US bank”

--

Maestro

[A_Traveller]

Just to put this in perspective, the present regs AFAIK are 500,000 THB may be legally taken to local {ASEAN?}, destinations, certainly Singapore, HK, presumably Macau, so Hengs' 'friends' are probably not even smuggling.

Regards

PS 30K a trip, guess that pays for Business Class + a hotel upgrade to a suite

Edited August 10, 2007 by A_Traveller

[DegenFarang]

I tried this last time I went back to the states. I brought 150,000 baht with me and then I couldn't find anybody to buy it for near what the international exchange rates said I should have been able to sell it for. I see those rates just like you guys online, but I dunno where the hel_l you can buy/sell for that price in the US.

I ended up taking the money back with me to Thailand

[bangkoksingapore]

Which countries can you legally take 500K baht? is that for thai or farang?

degenfarang---- maybe thai town in california

Edited August 10, 2007 by bangkoksingapore

[DegenFarang]

Which countries can you legally take 500K baht? is that for thai or farang?

girlfriend just told me they have new regulations. you cannot take over 50,000 baht legally out of the bangkok international airport. if this is true, its a moot point...unless you plan to take > 10 people w/ you

[A_Traveller]

Which countries can you legally take 500K baht? is that for thai or farang?

degenfarang---- maybe thai town in california

Think it's ASEAN,but may be in error. Add Malaysia to the list above. Believe that it's irrespective of nationality. Personally have done it a number of times, with no issues, and I'm not Thai.

Regards

/edit see post below for correction//

Edited August 10, 2007 by A_Traveller

[bangkoksingapore]

Which countries can you legally take 500K baht? is that for thai or farang?

girlfriend just told me they have new regulations. you cannot take over 50,000 baht legally out of the bangkok international airport. if this is true, its a moot point...unless you plan to take > 10 people w/ you

if you declare the money, what does that mean exactly???????????????

[A_Traveller]

Which countries can you legally take 500K baht? is that for thai or farang?

girlfriend just told me they have new regulations. you cannot take over 50,000 baht legally out of the bangkok international airport. if this is true, its a moot point...unless you plan to take > 10 people w/ you

if you declare the money, what does that mean exactly???????????????

Willing to stand corrected. though 50,000 seems very low. [Update it is low but there we go, see below] I remember that the signage at Don Meung was clear on this, [100k to rest of the world, 500 K 'local'] but there are no signs I've seen at 'the new place'.

In principal the money could be confiscated or you would have to prove it's provenance if you did not make a currency declaration. In most cases declaration states that the currency is yours legally {tax paid etc.} and you are entitled to take remove it form the country. However, if as has been suggested the limit is now so low, this would suggest that such declarations would need countersigning by the bank from where the money was removed. Naturally the authorities {banking} could raise questions since currency, by definition in this case is local. Further given the reputation of officialdom there would be a risk in either eventuality.

Regards

/edit add clarification & UPDATE//

UPDATE {learn something every day}

From IATA

Currency Import regulations allowed:

RESIDENTS: local currency (Thai Baht-THB): up to THB 50,000.- per person or THB 100,000.- per family holding one passport;

foreign currencies: unlimited.

NON-RESIDENTS:

local currency: up to THB 50,000.- per person or THB 100,000.- per family holding one passport;

foreign currencies: unlimited.

Currency Export regulations allowed:

RESIDENTS: local currency (Thai Baht-THB): up to THB 50,000.- per person or THB 100,000.- per family holding one passport;

foreign currencies: unlimited.

NON-RESIDENTS:

local currency: up to THB 50,000.- per person or THB 100,000.- per family holding one passport;

foreign currencies: unlimited.

Edited August 10, 2007 by A_Traveller

[DegenFarang]

Which countries can you legally take 500K baht? is that for thai or farang?

girlfriend just told me they have new regulations. you cannot take over 50,000 baht legally out of the bangkok international airport. if this is true, its a moot point...unless you plan to take > 10 people w/ you

if you declare the money, what does that mean exactly???????????????

it means that it isn't legal to take that much out of the country!!!!!!!!!!!!!!!!!!!!!!!!! it means that i think you should read a book about what its like on the inside of a thai prison before you start thinking of not declaring large amounts of baht!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! got any more questions???????????????????????????????????????????????????

[onethailand]

The maximum is 50,000 Baht, or 500,000 to neighboring countries. That would be Malaysia, Laos, Cambodia and Myanmar.

http://www.bot.or.th/bothomepage/General/L...rol/guide_t.htm

And yes, the 'new place' has signs prominently posted at Immigration.

Edited August 10, 2007 by onethailand

[bangkoksingapore]

"There is no restriction on the amount of Baht that may be brought into the country."

this is only for neighbor country or all country?

Edited August 10, 2007 by bangkoksingapore

[A_Traveller]

The maximum is 50,000 Baht, or 500,000 to neighboring countries. That would be Malaysia, Laos, Cambodia and Myanmar.

http://www.bot.or.th/bothomepage/General/L...rol/guide_t.htm

And yes, the 'new place' has signs prominently posted at Immigration.

Well that's interesting, IATA says one thing, and BoT says another. Who to trust

Never seen the signage at First/Business class immigration, guess I must have missed them.

"There is no restriction on the amount of Baht that may be brought into the country."

On the basis of this Guide to the General Public, from anywhere.

Regards

Standard Link {no highlight} to page at BoT

Edited August 10, 2007 by A_Traveller

[onethailand]

The maximum is 50,000 Baht, or 500,000 to neighboring countries. That would be Malaysia, Laos, Cambodia and Myanmar.

http://www.bot.or.th/bothomepage/General/L...rol/guide_t.htm

And yes, the 'new place' has signs prominently posted at Immigration.

Well that's interesting, IATA says one thing, and BoT says another. Who to trust

Never seen the signage at First/Business class immigration, guess I must have missed them.

Regards

Haha... I haven't had the privilege of First/Business class immigration gates since they opened the new place

The IATA info is probably outdated. The BOT page was last updated in May. But then again, government agencies aren't exactly known for their speediness...

[DegenFarang]

The maximum is 50,000 Baht, or 500,000 to neighboring countries. That would be Malaysia, Laos, Cambodia and Myanmar.

http://www.bot.or.th/bothomepage/General/L...rol/guide_t.htm

And yes, the 'new place' has signs prominently posted at Immigration.

Awesome. Anybody know of a place in these countries where you can exchange baht at the offshore rate?

[onethailand]

"There is no restriction on the amount of Baht that may be brought into the country."

this is only for neighbor country or all country?

Doesn't matter... since you want to bring foreign currency into Thailand to take advantage, not baht. But I think it's safe to assume you can bring it in from anywhere you like.

Edited August 10, 2007 by onethailand

[onethailand]

Awesome. Anybody know of a place in these countries where you can exchange baht at the offshore rate?

Oh, I'd say there are thousands of places in Malaysia that would be happy to take your baht...

And as I was saying about the US, the point being made was "if" you could find a place that would take your baht at all, let alone at a reasonable price. Unlike Asia, forex dealers aren't on every street corner...

Edited August 10, 2007 by onethailand

[A_Traveller]

The IATA info is probably outdated. The BOT page was last updated in May. But then again, government agencies aren't exactly known for their speediness.

Agreed, but it is odd, the 500,000 has been around for years, however, guess I'll find the link in Thai and print it out just in case.

Regards & thanks for the link at BoT.