The THAI BAHT – Transferring Money into Thailand
TRANSFERRING FOREIGN CURRENCY INTO PHUKET TO BUY PROPERTY
Transferring Money into Phuket
Any foreigner planning to purchase a property in Phuket must follow the correct procedures for transferring money into Thailand. If the proper steps are not taken it may prove impossible to repatriate the money when it comes time to sell your Phuket property, and for it to leave Thailand.
If more than US$ 50,000 is being remitted for the purchase of a Phuket condominium, a Foreign Exchange Transaction Form (FETF) must be requested from the receiving bank.
If funds are being remitted for the purchase of a villa, for a long term lease on a property, or to provide share capital for a Thai company, the FETF is not a statutory requirement. As long as all evidence of the original transaction can be presented and is clear, and there is proof that all requisite taxes have paid, the funds can be sent out of Thailand at a later date.
This process does take longer than it would with an FETF, so even if you are buying a villa in Phuket, it may be worth requesting one from your receiving bank/developer even though it is not required.
The FETF Required for a Phuket Condo Purchase
The Condominium Act states that any non-resident of Thailand who wishes to buy a condominium, must transfer the requisite funds from overseas specifically for that purpose. Regardless of the buyer’s country of origin, the funds must be sent in a foreign currency, to be converted into Thai Baht (THB) by the receiving bank upon arrival in the country.
In order to register a new condominium purchase with the Phuket Land Department, the FETF documentation must be presented to prove that the full purchase price was transferred into the Kingdom from abroad. (The instruction on the bank transaction form should also state that the payment is for the sole purpose of purchasing a condominium.) From an estate planning perspective, it is a good idea to always have multiple names (including children or grandchildren) added to the original telegraphic transfer, so they may be included on the FETF.
If the only way to arrange payment is by transferring funds to the developer directly, then the developer must arrange the FETF forms on behalf of the foreign buyer.
Taking the money out of Phuket at a later date is relatively straight forward, provided all the supporting documents can be presented. This is especially important if the funds have been borrowed from an overseas financial institution and/or there is an overseas mortgage on the condo.
Please also note that no repatriation of money will be possible until any income/capital gains taxes have been settled on the sale of the condominium. The FETF must also be presented to the tax authorities as proof of the legitimate ownership.
Whether ultimately remitting the funds back to a private account, or to repay a bank loan, the Foreign Exchange Transaction Form is an absolute requirement. By ensuring multiple names are on the FETF, not only is inheritance made easier, but funds can also be returned to the account of an heir. This document should be kept in a safe place at all times.
Again, it is wise to consult a good Thai lawyer throughout this process.
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