What Exactly is an FETF When Buying Property in Phuket?

Foreigners purchasing real estate in Phuket, must be aware that transferring money into the Kingdom of Thailand requires documentation, in the form of an FETF. This document is vital, not just for registering ownership at the local Phuket Land Department but is also essential when transferring money out of Phuket at a later date upon the sale of the property.

When a buyer is transferring money into Thailand to purchase real estate, the FTEF, the Foreign Exchange Transaction Form, (also known as an FET form, a Thor Tor 3 or even TT3), is required.

It is extremely important that this document be kept safe, either by the buyer or the reputable lawyer representing them. It is essential that this document does not get lost because, in the case that it does, it can create a headache instead of a successful stress-free sale, as well as for the remittance of funds back to the buyers home country upon the completion of the sale.

All Buyers of Real Estate in Phuket are Investors

Technically, or better put, legally, all foreigners are investors in Thailand if they purchase property, which is the fundamental reason for foreigners having to show that they have transferred the monies in from overseas.

The FETF is the official document required by the regulations laid down by the Bank of Thailand to show and prove remittance of a foreign currency into Thailand to purchase property. When the funds arrive in Phuket, or even anywhere else in Thailand, the authorised banking institution in Phuket that receives the funds for the purchase will issue the FETF.

What Should the Bank Transfer Advice Stipulate?

The FETF will show the foreign currency received, as well as the amount of funds being received in THB. The FETF will show the name of the transferee, and more importantly, the reason for the transfer, which will stipulate the address of the condominium unit or the property being purchased. The correct wording on the “bank transfer advice slip” must be requested by the buyer from the remitting bank. This is essential and any mistakes may cause unnecessary complications.

All foreign transactions or remittances into or out of Thailand need to be documented, whether the foreigner is buying or selling a Phuket property. In 2010 the amount of current remittance was increased to US$50,000, equivalent to around 1.7 Million THB, which, at today’s Phuket real estate prices, pretty much incorporates all Phuket property transactions, apart from extremely cheap condos in the Phuket Town area.

Every transaction must be reported to the Bank of Thailand. This is especially important for condominium purchases, as the full purchase price must be shown to be remitted into the country in a foreign currency. Section 19 of the Condominium Act states this unequivocally. There are no real stipulations on the type of foreign currency and where it comes from (apart from excluding crypto currency), but the name of the buyer, the address of the property being purchased and the full amount transferred into Phuket must be shown on the bank transfer advice.

The FETF must be equal to or Above the Purchase Price

It is also important that the receiving bank who issue the FETF shows an amount equal to or higher than the purchase price. If the remittance amount is less than the purchase price, even if it is a couple of hundred Thai Baht, the authorities will refuse to register ownership.

It has been known, on many occasions, where the FETF was slightly under the purchase price and the foreigners had to remit further funds to make up the balance. This is easily rectifiable as the Land Department will accept more than one FETF as long as it is equal to, or more than the purchase price.

Leaving Your Phuket Property to Loved Ones if You Pass Away

For buyers who wish to leave their assets to their loved ones, or simply estate plan, then it is advisable to put the names of the intended beneficiaries on the transfer advice too. This speeds up the probate procedures and makes it far easier to transfer the assets of the estate to the named beneficiaries of the deceased.

It is also advisable to make a Will in Thailand for all assets owned in the Kingdom, as this will also negate legal fees, as the process for winding up the estate is far quicker and, therefore, much cheaper with a Thai Will.

This is Important!!

This needs to repeated. All the necessary documents are handed to over to the government officer at the Land Department on the day of transfer of ownership. Everything is relatively easy as long as:

the purchaser’s name is shown (and possibly beneficiaries)
the amount is above the purchase price
the address of the property being purchased is shown

The Five Doors to Condo Ownership

As stated in our Thai Residential Property Guide (the five doors for Phuket condo ownership), section 19 of the Condominium Act, specifies that there are a number of avenues available to foreigners to acquire foreign freehold ownership of condominiums in Phuket. However, by far the easiest route is for foreigners to transfer foreign currency into Thailand for their purchase.

Some foreigners make the mistake of packing their bags in their home country and transferring all their money to a Thai bank account, but then have to transfer the money back to their home country when they realize they may not purchase a condo or building in their own name without remitting foreign currency to obtain an FETF. It is important to understand for a foreign buyer that they must prove that the monies have been transferred into Thailand in a foreign currency, and not in local currency i.e. Thai Baht.

How to Get the FETF from the Bank

Many foreigners buying condos or villas do not have a Thai bank account. If the foreigner does not yet have a Thai bank account, then it is commonplace for them to transfer monies to their lawyer’s client account or to the developer, both of whom may obtain the FETF on behalf of the buyer.