I became a US citizen last month, as I'm married to an American. We both rely on income from the restaurant we opened in the US a few years ago. Business is fine now, but who knows the future, so we're considering other investment options.
A friend suggested if I opened a trading account to invest in high-dividend stocks and held it for a year or so, I might get a return higher than near-zero interest rate. It sounds like an interesting idea, but I have absolutely no idea about the stock market and want to make sure I make the right choice. What are the other options if I invest in Thailand's stock market?
I'm also concerned about taxes. Now I have a business in the US (registered under my name and that of my husband). If I have income from the Thai stock market, do I have to declare my income from Thailand to pay taxes in the US as an American citizen?
Also, in the future we plan to retire in Thailand. If I open a new business here, does the Fair and Accurate Credit Transactions Act apply to me if I do business under my name alone, without involving my husband?
I have a house and several million baht in a deposit account in a Thai bank, which are my personal assets from before I got married. I would appreciate it if you could give some advice regarding my personal finances as well.
I'm not the type of person who likes to take high risks. Could you please give advice on how to manage our financial affairs properly? My goal is to make sure we can retire with no concerns about money.
—Nittaya
Answered by... Teera Phutrakul CFP
Now that you are an American citizen, you have to play by US rules. Didn’t they tell you that when you got your US citizenship? So yes, you have to declare all your global sources of income, Thailand included.
Second, never take investment tips from friends. If you have absolutely no idea how the stock market works, I suggest you would be better off sticking to your restaurant business and hiring yourself a financial planner. He or she will be able to assess your current situation and come up with a comprehensive financial plan that should meet all your short- and long-term goals.
nnn I heard there have been outflows of money from Thai banks to abroad due to the imminent inheritance tax. I'm considering taking my money out of the country if it can save my family some money, but I have no clue regarding the pros and cons of doing so, nor how to go about doing it.
I'm not sure if there would be any negative effects if they transferred some money back if we needed it. Please advise.
— Patt
Answered by... Teera Phutrakul CFP
I would stay put for now. Far too many people are running around like chickens with their heads cut off trying to avoid this inheritance tax, which has not even been enacted yet. Be calm and let’s wait and see the exact details of the tax. When investing offshore, there are many issues to deal with such as asset allocation strategy, currency risk, types of account and double tax treaty agreements. If the structure is not set up properly, you will be liable to even higher inheritance tax abroad. A bit like jumping from the frying pan into the fire.
nnn I currently work in Australia and plan to live in Thailand after I retire five years from now. I want to buy a condominium in Bangkok next year, but condo prices seem unreasonably high. Some people say prices will drop soon once the bubble bursts. Should I wait or follow my original plan?
—Tong
Answered by... Teera Phutrakul CFP
It’s all relative. Condos in Bangkok may be expensive compared with Australia but cheap compared with Singapore or Hong Kong.
When buying a condo, apart from the old rule of thumb — location, location, location — you need to come up with a budget you can afford, seek out a neighbourhood you will feel comfortable living in and arrange a mortgage with a bank.
Once you have done all the legwork, you'll be in a better position to decide whether the current price is unreasonably high.
The Thai Financial Planners Association is the Certified Financial Planner (CFP) trademark licensing authority in Thailand. It is a self-regulated, non-profit group of financial advisers and experts from various organisations set up to give advice to investors. Questions can be submitted through wealthcare@bangkokpost.co.th or the TFPA webboard at www.tfpa.or.th