Ways to Transfer Money to Thailand

Thailand is a beautiful country with astonishing attractions, rich culture, and welcoming people. Many foreigners came to visit the country as tourists, then decided Thailand was a place they would like to settle in more permanently. Some foreigners set up their businesses in Thailand, some work for corporations while some marry Thai spouses. Eventually, they would want to purchase a property whether it’s for their own residence or investment purposes.

Though there are varieties of properties in Thailand, there are some restrictions for foreigners. The only type of property a foreign individual can currently purchase is a condominium. In the future, foreigners may be able to own houses in Thailand under certain conditions.

In line with Thailand’s Condominium Act, there are 2 ways foreigners can possess condos.

1. Freehold: This allows a foreigner to have 100% ownership of the condo. It is the most preferred solution as it is simple and straightforward. However, it is crucial to be aware that foreign ownership cannot exceed 49% of the total units in that condominium. The rest must be owned by Thais only. Thus, foreign buyers must check with the property agent/seller regarding this restriction before entering into any type of agreement.
2. Leasehold: A leasehold is considered a long-term rent over a property from the freeholder with a maximum lease term of 30 years. The lease must be properly registered at the district or provincial Land Office. This protects the lessee in case the ownership of the property changes at some point. If agreed by the owner, it is possible for the lease term to be extended.

Purchasing Property in Thailand as a Foreigner

To prevent money laundering, the law demands that the money used to purchase properties in Thailand by foreigners must be transferred from overseas and there must be evidence of transfer issued by the bank. Even if a foreigner has a sufficient amount in his/her Thai bank account, the money will still need to be repatriated back to the account overseas and transferred to a Thai account for this sole purpose.

What is a Foreign Exchange Transaction Form (FET)?

In a simple explanation, the Foreign Exchange Transaction Form or FET or Bank Letter as we call it, is the evidence issued by the bank that proves the remittance of foreign currency into a Thai bank account and converted into Thai Baht by the Thai bank. The form is still known by some as Thor. Tor. 3 Form.

This document is required to purchase property in Thailand as it must be presented at the Land Office for the registration of ownership. Without this critical document, the official transfer of ownership will be denied.

However, the bank will only provide the FET certificate for the transfer amount that is equal to or over USD 50,000 (or equivalent in other currencies). In case the amount for the condominium purchase is lower than USD 50,000, the foreign buyer must request a confirmation letter from the bank that the fund has been transferred from abroad and exchanged into Thai currency. This evidence can also be used as proof to the Land Officer.

Yet, if a foreigner holds a Thai permanent residency, he/she does not need to obtain the FET certificate or follow the process above and he/she can purchase the property in Thai Baht.

How to Transfer Funds into Thailand?

Unfortunately, using cash to purchase property is neither a practical nor the best option. If cash is brought into the country for the purpose of buying a property, the foreigners must declare the amount and their intention at the customs who will then issue the receipt that can be presented to the bank as evidence. However, not all banks will agree to issue the confirmation letter with this evidence. Hence, it is highly not recommended.

The most preferred and assured method is through bank transfer. Then, the question is how do you correctly transfer money to Thailand to make sure that you have the evidence required? It is advised that you consult with a local property lawyer as each case may be different, but here are the basics you should be aware of.

Two Options to Transfer the Money to Thailand

There are two options through which you can transfer the money to Thailand for property purchase:

1. Transfer the funds from a foreign account to a Thai bank account for exchange into Thai currency or to a Thai escrow account. Then, domestically remit the amount from the account/escrow account in Thailand to the developer’s account. In this event, the account owner/the escrow account owner must be the one requesting the bank to issue a FET certificate or the Bank letter. Only such account owners may request for the Bank letter.
2. Transfer the funds from a foreign account directly to the developer’s bank account in Thailand. This way the developer would be responsible for making sure that the appropriate evidence is issued by the bank. The developer/seller will inform you if this option is available or not.

Key Considerations for a Successful Transfer

These are the points to note for the process to be successful:

• When transferring funds into Thailand, the buyer must ensure the transaction form clearly states the purpose of the transfer that the payment is for purchasing a particular condominium. It has to be specific and state all the required details by the land office.
• The transfer must be executed in foreign currency only from an overseas bank to be converted into Thai Baht by the receiving Thai bank, despite the origin country.
• The transfer of funds is generally made through the method of Telegraphic Transfer (T/T) in which fees are applied.
• The buyer may request a third person to carry out the transfer by specifying the buyer’s name as a recipient of the funds. It does not matter if the buyer’s name is mentioned as a sender or a receiver as long as the name is on the Bank letter/certificate.
• In case there are two buyers, to have both buyers’ names registered as the owners of the property, the party who transfers the funds must specify the names of the two buyers to the bank declaring that these two persons intend to jointly purchase the property. Both names shall be included in the bank certificate on payment details/purpose of transfer that will be presented to the Land Officer.
• The transfer amount must be equal to or higher than the total purchase price amount stated in the Sales and Purchase agreement.

Essential Information in the FET Certificate

The FET certificate or the Bank letter should consist of the following information:

• Total amount transferred in foreign currency
• Total amount after converted into Thai Baht
• Name of the person who transfers the funds
• Name of the person who receives the funds
• Purpose of transferring the funds/Payment details from the sending party

It is important to acknowledge that once the foreign buyers have successfully registered the ownership of the property, both the title deeds and the FET certificate shall be stored safely as these documents prove the owner’s legal rights over the property. In addition, if in the future, the buyer decides to sell the property and to repatriate the funds back to a foreign account, these documents will be required by the local Thai bank.

Since the legal implications and essential documents for each case might be different, it is recommended to seek advice from legal professionals who are well-versed in Thai property regulations and local customs. Contact us to consult with our experts in this matter.

Siam Legal Property Services

Siam Legal International offers property legal services with offices within major provinces in Thailand. These include Bangkok, Chiang Mai, and Phuket. Our firm is staffed with foreign and Thai lawyers strategically assigned around Thailand. You can visit our head office on the 18th Floor, Two Pacific Place, Sukhumvit Road, Bangkok; or if you have any property questions or issues that need to be addressed, call us using the phone numbers below.