Trading stocks in Thailand

I decided a few months back to open a stock account for my wife. I am not a big fan of shared or joined accounts and prefer if everyone has his/her own fair share of independence. Therefore, while we keep our bank accounts separate, it only makes sense that she also has her own source of wealth and income for her future plans, ideas, and dreams – which may or may not align with mine. Another reason is also that it’s always better to have a 2nd income under another name within the family. Saving taxes and reducing complications.

Taxes

But speaking of taxes, Thailand is a great destination for investors. There is no capital gain tax in place, so any profits collected from stock trading are completely tax-free. That is if you are living in Thailand of course. On top of that, dividend payouts are taxed at very reasonable 10 %. Therefore, no matter whether you are a trader or a long-term investor, Thailand is an attractive place to invest.

Account

I opened a securities account with the Bangkok Bank. It’s a fairly simple process, all you need to do is to go to a branch, sign some documents, show your passport and after a few days you will receive a username, password and the instruction to install an APP on your phone called STREAMING. It’s actually not easy to find information about it online so you can get a peek at how it looks HERE. The app can access your securities account with the username and password details.

There are different types of accounts. The most simple one is cash-based, meaning that you can only buy stocks with the money you put on it. If you like to have an overdraft in place or plan to short stocks, it is possible but further documents such as a work permit in Thailand or another person to guarantee for you, and/or a security deposit might be required.

I opened the account with Bangkok Bank because my main salary account is also there. Banks in Thailand are quite modern and advanced and offer much smarter solutions compared with i.e. German banks. One such function is “bill payment” which can be used to pay electric bills, water, telephone etc. in an instant. Transferring money to the securities account is also being done via this function and once the account has been verified, money will be deposited within milliseconds.

Transaction costs are extremely low, you can see the commission rates HERE. Usually, your cost will be less than 0,5% even with a very low trading volume. The system to calculate the commission is a little bit complicated because it is based on volume not only per transaction, but on your actual total daily traded volume, but from my point of view its a waste of time to elaborate on it. The cost is so low that it’s completely negligible.

Last but not least, what you also might want to do is to declare your main bank account (which must be a Thai bank) as your payout account for dividends. The service is called e-dividend and will ensure that any dividend payment will be transferred immediately to your main account. 10% in taxes are being deducted without any further action required from your side, so there is also no hassle about this later with any authorities.

You will need to do a tax declaration by the end of the year where your dividends need to be listed, but doing taxes in Thailand is amazingly simple. You do it completely online and it’s literally one A4 page that contains all the information.

Stocks & Information

The first source for information about Thai stocks should be the SET website (Stock Exchange of Thailand). It’s pretty comprehensive and full of information about every single listed stock. I encourage you to explore this site in detail. It has a dividend calendar, detailed company information, daily news updates and more.

The 2nd source of information is the Streaming App. It has plenty of built-in evaluation tools, to quickly identify stocks according to your preferred investment strategy. Dividend Growth, Small Caps, Value Stocks… the integrated stock screener is extremely useful to quickly identify companies that are worth a second look.

Probably the only and biggest restriction is, that you can trade only Thai stocks and Thai ETFs. I would have loved to add some US stocks or REITs but that’s unfortunately not possible for now.

Dividends

There are plenty of successful, dividend-paying companies in Thailand and yields are great. My wife’s account will probably reach a yield of 4,5 % this year and dividend growth is also a thing here. Most companies pay dividends only once or twice a year. The main dividend season is around April / May and then later again around September / October. However, as an income investor, you can find companies that pay out a dividend on different months as well. My target is to create a monthly-income portfolio and I think I can have it up and running within a year.

…. and go!

This is almost everything you need to know to get started. Happy investing!

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