If you are a foreigner looking to purchase property in Thailand, you’ll be pleased to learn that there’s an awful lot of red tape. That said, as long as you follow the correct procedures, particularly when transferring money into Thailand, you shouldn’t run into any problems.
In the event that the proper steps are not taken, it might be very difficult – if not impossible – to repatriate your funds when it comes to either selling up or leaving Thailand.
In this article, we’ll tell you everything you need to know about transferring money into Thailand to purchase property, the right way.
Foreign Exchange Transaction
If you are transferring more than $50,000 for the purchase of a condo, then an FETF (foreign exchange transaction form) must be requested from the recipient bank.
If, however, the funds are being transferred for the purchase of a long-term leasehold on a property, a villa, or a capital share with a Thai company, an FETF is not a requirement – that said, all evidence of the original transaction must be crystal clear, along with proof that all of the necessary requisite taxes were paid (in which case, the funds can be sent out of Thailand again in the future).
The latter process tends to take longer than when using an FETF, so, even though an FETF may not be required, it can make your life much easier to go ahead and request one anyway.
FETF
The Condominium Act in Thailand clearly states that all non-residents who are interested in buying a condo, must make an international transfer only and specifically for that exact purpose.
The buyer’s country of origin is irrelevant; the funds must be sent in a foreign currency to then be converted into Thai Baht upon arrival at the receiving bank.
The FETF documentation is crucial in order to register the condo with the Land Department. This is to prove that the full purchase price was originally transferred into Thailand from overseas).
For the purpose of estate planning, it is always recommended to have multiple names (i.e., heirs) added to the original transfer and included within the FETF documentation.
Fortunately, taking the money out of Thailand again in the future is straightforward enough, however, all documents must be presented, which is why this is a critical step that must not be overlooked (even more so if the funds were loaned from overseas lenders).
It is also important to note that the repatriation of the funds will be impossible until the relevant income tax and capital gains have been officially settled against the sale of the property. Again, the FETF will need to be presented to the relevant tax authorities in order to prove your legitimate ownership.
We strongly advise that you seek legal representation to assist you when purchasing property in Thailand and making an international transfer. It might feel like an unnecessary expense, however, given the complexities of the Thai legal system surrounding international transfers and property ownership, it’s always worth having a professional to ensure that everything is up to standard and above board.
Pro tips
- When investing in Thai real estate, keep accurate and detailed records of every single transfer you make.
- Make sure you understand the specific requirements before making your first payment (contact a reputable real estate agent in Thailand for further assistance).
- Remember that your Thai bank is required to prepare the correct documentation for your transfer – the nature of which depends on the purpose of your transfer and the amount being sent.
- Treat all supporting documents from your bank such as the FETF and leasehold agreements with great care and keep them safe.
- Make sure that you are aware of the necessary taxes and fees that you are required to pay – and pay them!
Conclusion
While it is always recommended that you work with the proper legal representation, it may be worth exploring some reputable real estate agencies first. The reason being, some of the best agencies have in-house lawyers or preferred legal teams that they can recommend for you.
While it may feel a little overwhelming, understand that once you have a real estate agent and legal representative on your side, the whole process will be far less painful.
We hope that you have found this article helpful and wish you all the best when purchasing property in Thailand.
