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Financial planning and savings support

Retirement Mutual Funds (RMFs) were established to encourage people to save for retirement by providing Thai tax benefits on savings.

The following conditions apply:

  • All participants will receive  a current-year Thai tax deduction on contributions.
  • Depending on the fund's policy, the fund manager may invest in equity funds (Thai as well as international), debt instruments, or mixed funds.
  • Returns grow free of Thai tax.
  • The maximum annual contribution is the lesser amount of either 15% of total annual compensation or THB 500,000.
  • If you contribute to a company provident fund, the total contribution to both the provident fund and RMF cannot exceed THB 500,000.
  • Contributions need to be recorded before the end of the calendar year.
  • Funds can be withdrawn free of Thai tax after the age of 55 (and if held for five years or more).
  • To qualify for Thai tax benefits, you must contribute at least every other year for a minimum of five years. The minimum contribution is 3% of taxable compensation or THB 5,000, whichever is lower.
  • If you fail to meet the required minimum contribution schedule or withdraw funds prior to reaching the age of 55 years, or have not met the five-year holding requirement, you will be required to pay back any tax deduction you received. In addition, any capital gains will be subject to a 10% tax.

Long-Term Equity Funds

Long-Term Equity Funds (LTFs) were set up under Thailand's IMF program to encourage longer-term investment in the Thai equity market.

The following conditions apply:

  • You will receive a current-year Thai tax deduction on contributions.
  • Unlike RMFs, LTFs invest primarily in Thailand-listed stocks. You will therefore want to make sure a Thai-only equity holding makes sense in your diversified portfolio.
  • Returns grow free of Thai tax.
  • The maximum annual contribution is the lesser amount of either 15% of total annual compensation or THB 500,000.
  • Contributions can be made in addition to those made to provident funds and RMFs.
  • There is no need to make ongoing contributions to maintain tax benefits.
  • Contributions and earnings can be withdrawn free of Thai tax after five years.
  • If you withdraw before the five-year holding period, any tax deductions you received must be paid back. In addition, any capital gains will be subject to a 10% tax.
  • Contributions must be recorded by the end of the calendar year.

The rules regarding LTF and RMF contributions can and do change, so make sure you check the current status before making any contributions.

Who Can Benefit from RMFs and LTFs?

Aside from Thai citizens, many foreigners with a long-term commitment to Thailand through work, marriage, or lifestyle can benefit from contributing to LTFs and RMFs. Those on short-term expat assignments in Thailand will have to carefully weigh the potential benefits against the various rules and regulations required to maintain the tax-exempt status of each fund.