Thai government bonds

[Dan SG]

Hi all,

Seeking guidance on how to purchase Thai government bonds.  A little detail about me below and why I would like to purchase these:

• I am not currently living in Thailand but want to move long term later this year; I'm under 50 and so do not qualify for a retirement visa.
• I purchased a condo in Bangkok about 10 years ago with some money I came into from an inheritance - its appraised value means I have about 2/3rds of what is needed for an investment visa.
• I would like to top up with government bonds to meet the USD500k needed for an investment visa (I meet the other conditions needed for this visa).  This is probably the best way of getting to 500k without making another real estate investment
• I have a bank account in Thailand 

Does anyone know how to purchase these? Can they purchased the whole time or do you need to wait for them to be auctioned.  Can a foreigner on a tourist visa purchase? And when the bonds mature can the original principal be remitted out of Thailand if I have the foreign exchange slips showing the original remittance into thailand to purchase the bonds? If anyone has any practical experience buying these, especially in order to qualify for the investment visa, and can share insights would be massively appreciated? I recognise buying thai government bonds isn't the most conventional of investments but for my current situations and needs (i.e. obtain a visa) this is the best route to take 

[Mike Lister]

It is extremely difficult for foreigners in Thailand to buy first issue bonds, they are nearly always reserved in advance by banks for preferential customers. A bank such as UOB Asset Management may be able to guide you but I suspect you are limited to the secondary market which requires the services of a broker. I have heard that some banks such as Kasikorn allow foreign customers to buy after market bonds via an app but I've never seen first hand evidence of this. 

 

I think the most important aspect you need to consider is the profitability of Thai bonds, Thai central bank rates are only 2.5%. 15 year bonds have a coupon rate of 2.8%  which is tiny compared to T'bills and Gilts. In addition, the brokerage fees, bank charges and tax makes holding Thai bonds prohibitively expensive. So if you intend to buy them, you should have a clear reason why. One reason might be that you think the value of THB will strengthen, which would be good enough.

 

Those things said, if your objective is the investment visa, the BOI will be able to help with your bond purchases so they would be a good starting point.

 

https://www.worldgovernmentbonds.com/country/thailand/

[Mike Lister]

Thread moved to Banking Investments ,Finance and Economy section for more focussed replies.

[Foxx]

1 hour ago, Dan SG said:

I purchased a condo in Bangkok about 10 years ago ... its appraised value means I have about 2/3rds of what is needed for an investment visa.

 

The condo's current value is irrelevant.  You need to show that you've transferred 10 million baht into Thailand.

 

You can buy Thai bonds in the secondary market through a registered broker.  However it would be simpler and safer to open fixed deposit accounts with a bank or banks.  The value of a fixed deposit account can't fall below the amount of money you put in.  Bonds, however, can lose value meaning you might not have sufficient value to maintain the visa.

[Dan SG]

6 hours ago, Foxx said:

 

The condo's current value is irrelevant.  You need to show that you've transferred 10 million baht into Thailand.

 

You can buy Thai bonds in the secondary market through a registered broker.  However it would be simpler and safer to open fixed deposit accounts with a bank or banks.  The value of a fixed deposit account can't fall below the amount of money you put in.  Bonds, however, can lose value meaning you might not have sufficient value to maintain the visa.

Thanks.  Presumably, though, that would only surface a renewal point - which I think is every 5 years.  I don't think they are monitoring fluctuations in value of the bonds - if they were used to fund some of the USD500k - and would revoke the visa if it dipped below USD500k?

[Dan SG]

7 hours ago, Mike Lister said:

It is extremely difficult for foreigners in Thailand to buy first issue bonds, they are nearly always reserved in advance by banks for preferential customers. A bank such as UOB Asset Management may be able to guide you but I suspect you are limited to the secondary market which requires the services of a broker. I have heard that some banks such as Kasikorn allow foreign customers to buy after market bonds via an app but I've never seen first hand evidence of this. 

 

I think the most important aspect you need to consider is the profitability of Thai bonds, Thai central bank rates are only 2.5%. 15 year bonds have a coupon rate of 2.8%  which is tiny compared to T'bills and Gilts. In addition, the brokerage fees, bank charges and tax makes holding Thai bonds prohibitively expensive. So if you intend to buy them, you should have a clear reason why. One reason might be that you think the value of THB will strengthen, which would be good enough.

 

Those things said, if your objective is the investment visa, the BOI will be able to help with your bond purchases so they would be a good starting point.

 

https://www.worldgovernmentbonds.com/country/thailand/

Thanks.  This is very helpful.  Yes it would be purely to get the investment visa which the agent is giving strong assurances will be approved provided I can evidence $500k in investment (I sense they are more in the habit of approving these if everything can be proved rather than rejecting for no reason), and am not that far off because of the condo purchase.   You're right that it's probably not the best investment but better than buying another condo what with the headache of owning property and paying management fees.