This is a frequently asked question being asked by foreign (or even local) buyers of real estate in Phuket. As cryptocurrencies become widely accepted around the world, many property developers in Phuket have also decided to accept cryptocurrency as a means of payment.

The reality of buying property in Phuket with cryptocurrency, or anywhere in the world, for that matter, relies heavily on the local legislation in each country.

Countries across the world have taken different stances on digital assets. In many countries, it is still illegal. But Thailand seems to have embraced digital technology, digital payments, and blockchain. The Thai authorities have made it clear that they are pro-cryptocurrencies, granting licenses to crypto exchanges, as well issuing a Royal Decree on Digital Asset Business, back in 2018.

Buying Phuket Property with Crypto Assets

In 2024, it is becoming easier to buy property in Phuket with digital assets. However, it is still early days, and so it is important to stress that not every developer in Phuket is crypto friendly. Anyone seeking a property purchase on the island, therefore, will have to do some research and be a bit more selective should they wish to make a purchase using digital assets.

The first step should be to make a shortlist of those developers who do accept cryptocurrencies. However, with a thorough search and, if the buyer is lucky, they may even be able to find a private owner with a resale property, who is also open to receiving payment in cryptocurrency.

If the buyer does manage to find a developer or a private seller willing to accept crypto, then the rules are simple enough. The developer/seller will accept payment in crypto, based on the fact that the crypto they receive as payment acts as cash at a given exchange rate. Likewise, the buyer must accept that all payments made also act as cash, at an agreed upon exchange rate.

But it is also dependent on the type of property being purchased. This is because there are a number of legal structures available for foreigners when buying Phuket property, and these vary considerably. At this point in time, some legal structures, because of the laws and regulations, prevent foreigners from using cryptocurrencies.

Foreign Freehold Condo Ownership Can’t Currently Be Done with Crypto!

For example, current condominium laws stipulate that the purchasing funds for a condo must be sent into Phuket (or anywhere in Thailand) in a foreign currency.

Usually, when the funds arrive (in Thai Baht), a representative of the buyer (or the buyer if they already have a Thai bank account), will be able to obtain a Foreign Exchange Transaction Form (FETF) from the bank.

This FETF is then presented to the government official at the Land Department on the day of transfer of ownership. Without this FETF, the official will refuse the registration. Under current legislation, this means it is not possible to use digital assets for a foreign freehold condominium purchase.

Therefore, any foreigner wishing to buy a foreign freehold condominium, will need to cash out their digital assets and convert to the local currency in their country of origin, before remitting the funds to Thailand. Unfortunately, because the FETF can only be obtained through the Thai banking system, this is the only way (currently) to obtain the required documentation for the registration of freehold condo ownership.

Leasehold Condos and Apartments

Although it is not possible to purchase a foreign freehold condominium in Phuket, it is possible purchase a leasehold condominium (one of the 51% under condominium law) or an apartment, which also has the same leasehold only structure. An FETF is only required for a freehold condo purchase, but leaseholds do not fall into this category. If a buyer is comfortable with a leasehold unit from a respected developer, this may be an option worth considering.

Purchasing Villas in Phuket

Many foreigners also purchase villas in Phuket, but this also has different legal connotations. Some foreigners choose to own the building and lease the land it sits on. Others, decide, upon legal advice, to own the building, and to set up a Thai Company to own the land. As always, it is advisable for foreigners to seek legal advice to see which options may work for them.

It is also important that any non-crypto parts of the purchase, which will require a regular bank transfer are documented, mainly because of ease of repatriating funds back to their home country at a later date/upon sale.

If purchasing through a developer that accepts crypto, generally speaking, any leasehold purchase may use cryptocurrency as a means of payment. This means that if the foreigner is entering into a lease registration, for both the villa and the land together, cryptocurrency may be used.

Secured/Protected or Collective Leaseholds

Cryptocurrencies may be used for a secured or protected leasehold as, in many cases, the share purchase takes place outside of Thailand, and as long as the buyer and seller can agree on the terms, there is nothing to stop the two parties using digital assets to settle payment.

A Bit More on Thai Companies

Foreigners cannot own land in Thailand. Although this is a very stringent legislation under Thai law, foreigners are still frequently advised to set up a Thai Company for their Phuket property purchase. This is possible, provided that it is done according to Thai law, with proper investing Thai shareholders, and that it adheres 100% to all the corporate laws of Thailand.

However, if using cryptocurrencies to set up a Thai Company, it is important to understand that the paid up/registered capital needs to appear on the balance sheets, and under current laws, cryptocurrencies may not be used as paid-up capital. This means that any digital currency arriving in Phuket has to be converted to local Thai Baht currency before setting up a Thai Company Limited.

Buyers Must Be Aware of the Risks When Using Cryptocurrencies to Purchase Phuket Real Estate

Like all forms of investment, digital assets are not 100% safe. Anyone investing in Phuket property using digital assets, must be aware of the risks that they may be exposed to during the sales process.

Here are just a few:

1: Cryptocurrencies are volatile. Any individual entering into a Phuket property purchase must ensure that this volatility will not compromise their purchase, and could lead to them not being able to complete the transaction. Even Bitcoin, in March 2020, lost 50% of its value, in just 2 days. If this transpires, and the buyer cannot meet their commitments made to the developer, they could lose everything they have paid to date.

2: Anti Money Laundering (AML) Requirements. Many people were attracted to Bitcoin because of the anonymity it created. However, that attraction is already fading, and may have already faded completely. Much tighter controls on Anti Money Laundering means crypto investors should be aware of any laws they may be breaking, which could mean a loss of funds and/or future legal issues.

3: Constantly Changing Legislation. Governments around the world keep changing their legislation on digital asset regulation, as well as on both digital payments and AML procedures, as mentioned above. It is impossible to predict what policies and new laws governments will pass. However, it is important for those holding crypto currencies to be aware of this fact. Many sources have suggested that is highly imperative that wallet providers and exchanges make sure they are complying with all laws and regulations, including AML.

4: Additional Fees. The developer may or may not request additional fees for accepting cryptocurrencies for the purchase of Phuket property. Converting crypto to normal currency, if necessary, may also be an additional cost.

5:  Beware of Taxes. Buyers using cryptocurrencies should also be aware that they may be subjected to taxes, of which they never previously thought about. Many countries already have laws in place for digital asset transfers, and this may become an issue in the future. Some countries have even defined cryptocurrencies as “property”, and this policy may also be introduced in other jurisdictions in the years ahead.

In Summary

If a buyer of Phuket property is a crypto-enthusiast and wishes to invest in the island’s dynamic property market, then they should gain some foresight in the procedures and laws governing this subject.

If a crypto investor wishes to convert cryptocurrency into the local Thai Baht, they should also research the best way to do this. Making sure you follow AML procedures, and even registering at a local exchange is advisable. Any failure in the procedures could result in a huge amount of stress and possible loss of capital in the future.