Thailand: retirees' purchasing power at its highest

The purchasing power of a European retiree in Thailand is the product of two factors: the local cost of living, far below European levels, and the euro–baht exchange rate.

The second is rarely factored into projections, even though it can vary by several tens of percent over a decade. A budget pegged to a favourable rate becomes unsustainable if the local currency appreciates.

The baht has gone through periods of marked appreciation against European currencies, which has reduced the purchasing power of pensions received in euros accordingly. This is a structural risk of any move to a different currency area.

We do not publish exchange rate series or a typical monthly budget for Thailand: we have not found an official source measuring a basket of spending comparable to that of an expatriate.

The practical rule that follows is never to build a plan on the current rate, but to check that it would remain viable if the local currency appreciated significantly.

A partial hedge exists and is worth mentioning: keeping part of your savings in euros and converting only as needed, rather than transferring capital in one go. This approach smooths exchange rate risk without eliminating it, and avoids tying up assets in a currency you have no control over.

Thailand sets a tax residency threshold of 180 days¹ of presence per year. It is lower than the one-hundred-and-eighty-three-day threshold used by most countries.

A retiree living there all year round is therefore a tax resident, without exception. The scale ranges from 0%² to 35%³.

The Thai tax authorities have also changed their position on the taxation of foreign-source income remitted to the country. This is the decisive point for a retiree who brings in their pension month after month.

We do not publish the rule in force on remitted foreign income or the date it took effect: we have not been able to verify it in an up-to-date official Thai source. It must be established with a local adviser before any regular transfer of funds.

Finally, the France–Thailand tax treaty determines how pensions are treated, with public pensions generally following a different rule from private pensions.

Thailand offers several long-stay permits. The visa for remote workers is valid for 5 years⁴ and allows stays of up to 180 days⁵ per entry, subject to funds of from THB 500,000⁶.

The long-term resident visa, administered by the Board of Investment, offers a cumulative duration of 10 years⁷ and includes a category for retirees.

This category requires annual passive income of at least from $80,000⁸, or a lower amount combined with an additional investment in Thailand.

Highly skilled professionals covered by this scheme also benefit from an income tax rate of 17%⁹, and the official portal mentions an exemption on foreign-source income for holders.

• The exchange rate is the first variable in a retiree's budget, ahead of taxation.
• The tax residency threshold is 180 days¹: a year-round stay exceeds it.
• The rule on remitted foreign income has changed and must be checked.
• The long-term resident visa offers 10 years⁷ and a retiree category.
• The France–Thailand tax treaty distinguishes between public and private pensions.

Finally, health is the item whose trend is the most predictable and the least favourable. The Thai private sector is of a good standard, but its cost is rising rapidly and insurance becomes expensive, then difficult to take out, with age. This item must be costed over the duration of the plan, not over the first year.