Yes they can. There is a common misconception that foreigners are forbidden from purchasing property in Thailand unless there is a treaty exemption: section 86 of the Land Code Act. We are not quite sure why these misconceptions continue to remain but we are here to tell you they are wrong and that Thailand continues to welcome foreign investment. Thailand recognises the importance of foreign investment in its property and continues to work hard to make the nation as welcoming as possible for people from all around the world. Thailand has a lot of pristine and fertile property that it wants to share with the world. We are to tell you that there are numerous instances in which a foreigner is allowed to purchase property in Thailand. Thai property law generally allows foreigners with significant funds to own property in Thailand. The Kingdom’s real estate law stipulates that foreigners are able to purchase and own a certain amount of property based on an investment of 40 million baht (under section 96 of the Land Act), provided the property is used for residential purposes and it met certain approvals. Foreigners are also permitted to lease property for up to 30 years and are allowed to be an investor in a Thailand-registered company that owns property in Thailand. Thai law also allows for family members to one day inherit your property ensuring that your investment remains in your family. If you are lucky enough to be married to a Thai national, your Thai spouse may also be allowed to buy property or property in Thailand in his or her own name. A notable restriction worth being aware of and remembering is that developers of the condominiums are only able to sell a total of 49% of the units to foreigners meaning 51% must remain in the hands of Thai nationals. When making a decision to purchase it is therefore important to ensure that the 49% allocation has not already be reached. For example, if a development has 1000 units then foreigners can buy 490 of those. This explains why large developers dominate the market. If it has, and you are still keen to buy that specific condominium then there are different approaches you can adopt. For example you could form a Thai company with a maximum personal shareholding of 49% with the remained being held by Thai citizens acting as nominee shareholders. The law says that a foreigner can purchase a condominium unit must remit foreign currency into Thailand in an amount of the condo’s purchase price. Proof of the remittance must be shown to the Land Department at the time the transfer of ownership of the condominium unit is registered and most developers arrange this for free as part of service.
What if you do not want to purchase a condominium? You may instead want to purchase a villa on its own private plot of land. This is a common approach for those wanting to settle in Pattaya permanently. Or despite what I have described above, you still want to buy into the condominium where the 49% foreign threshold has already been met. If either of these scenarios is applicable to you then you do have a few different options. One you could buy in your spouse’s name assuming they are Thai (then a 49% rule does not apply). If you are confident in your relationship then this may be a good approach for you. However if something does go wrong you should understand that you would most likely lose your property. A prenuptial agreement is likely to have little impact, as this would be invalid under Thai law. If you were to die and have living children, they also would have no rights to the property after your death unless your Thai spouse specifically bequeaths them the property in their own will. If your spouse were to die then the property would go to their next of kin and not you, leaving you homeless.
The second option is buying a villa or piece of land on which you intend to build a villa, on a 30 year lease. The reason it is 30 years and not some other number, is that this is the maximum period that foreigner are permitted to lease land in Thailand. Under no circumstances should you believe someone who tells you that you can then renew lease for another 30 years, and then another 30 years, when the previous lease expires. This is categorically untrue, false and misleading. These restrictions cannot be bypassed and exist for good reasons. The Thai Supreme Court recently stated that a contractual promise by the owner of the land and/or property to renew such a lease is unenforceable if included in the original contract. The Thai Supreme Court also made it clear that that a promise made by the lessor to renew the lease would only be enforceable if that promise was made there are three years or less remaining on the current agreement. There is no way around this. There is no clever wording a hotshot lawyer can introduce that will change the law just for you.
Another problem associated with purchasing a property on a leasehold basis is that you are not permitted to sublet. If it is your plan to live on the property then this is of little or no concern to you. However if you are intending to sublet with the aim of gaining a rental income then you seriously need to reconsider your options. Despite all of this, if you are still toying with the idea of purchasing land and/or property in Thailand on a leasehold basis then it is probably best you book yourself an appointment with a lawyer who is very familiar with the situation. The best-case scenario is that they may be able to have the contract structured in such a way that it would make it hard for the original landowner to sell the property following the expiration of your 30-year lease.
The third option is to become a big-time investor. Thailand is a place where in some instances having the correct amount of money can help you overcome some barriers. However when we are considering land that ‘right amount of money’ might be astronomical. If you have a spare THB 50 or 60 million then Thai authorities may be more than happy to have you come aboard. However if you are not so wealthy, and most people are not, then becoming a big-time investor is probably not an option worth considering.
The fourth option is to buy as the minority partner in a Thai company. Prior to the Condominium Act, the most common approach foreigners used to purchase property in Thailand was through forming a Thai company in which they were the 49% shareholders. The other 51% who are called ‘sleeping partners’, leave the foreign shareholder to enjoy 100% of the company’s benefits. Thai lawyers continue to debate the legality of this and they continue to provide varied responses. The major issue here is the different between theory and reality. Whilst law may allow this to happen, the happenings of the real world are often very, very different. That easy-going nature that characterises the everyday Thai person does not always hold when it comes to business dealings.
Theory holds that foreigners have been able to buy property for many years according to this 49% - 51% rule. In recent times there has been a growing concern amongst the Thai establishment about the ways in which foreigners have been abusing this law. In 2006 the Thai Government passed new legislation trying to prevent this kind of thing happening. As a result all Thai shareholders in companies need to sign a declaration that they re not acting as nominee shareholders on behalf of foreigners. If it is found that they have lied then they face persecution and possible jail time. There is also the possibility of further legislation being introduced in the future.
The reality of the situation is that foreigners continue to buy real estate by forming Thai companies of which they own 49% and the remaining 51% is owned by Thai citizens acting as nominee shareholders. It does not appear that any foreigners have lost their property to date, nor have Thai citizens wound up in jail for their involvement in schemes, however one never knows when this situation may change.
Investment in foreign real estate really has become the new Swiss bank account. Privacy for financial assets is officially dead. It is now safe to assume that the government will at some access the details of your financial life. Every dollar you earn is traced and the information is stored. If the government wants to see how much money you have and what you are spending it on, it simply just takes the click of a mouse. The answer to what many consider to be an invasion of financial privacy is definitely not to try and hide your assets because this cannot possibly be done. The answer is to invest in nonfinancial assets like foreign real estate. For American citizens, owning foreign real estate is the best legal way to store their wealth abroad and keep their privacy. If privacy is a major concern for you, and it should be, you must consider investing in foreign real estate. Owning real estate in a foreign country simultaneously accomplishes four key goals. First it allows you to move your savings and wealth beyond the immediate reach of your government. The major benefit here is that it is highly unlikely that your government will ever seize your foreign real estate. Second foreign land ownership allows you to then open a financial account in that country. This can then help obtain residency, be a quicker route to citizenship in that nation and in some instances result in instantaneous citizenship. Third it helps achieve portfolio diversification. Foreign real estate has diversification benefits for your stock portfolio, has the potential for capital appreciation and can provide another income stream for you should you decide to rent your property. Fourth this investment can help Americans retain their financial privacy. Foreign real estate ownership is a legal approach to keeping some of your wealth outside of the US and is not reportable (unless you are gaining rental income from your investment).
Whenever real estatein Thailand is bought or sold there are potential taxes/fees to be considered. Which of these taxes/fees will be applicable depends on the details of the transaction, the seller and the duration of the seller’s ownership.
Transfer Fee: This is the percentage fee of the appraised value of the property being transferred. The transfer fees in Thailand for property is 2% of the property value. It is a custom to split taxes between buyers and sellers. Major developers often split the taxes so the actual taxes that the buyer pays may be lower than above.
Business Tax: The business tax payable over the property is 3.3% of either the sale price of the property or the appraised price of the property (which is usually lower than selling price). Land Tax: Land tax is is an annual tax levied on land ownership equivalent to just a few Baht per rai for properties held as private residences. For properties held by companies the tax can be significantly higher. Under current legislation the property owner is expected to pay at the local tessaban or local government office every year. However, there is no tax bill sent out and in practice it is rarely chased up. The problem of unpaid tax liability usually only surfaces when the property is being transferred, and no transfer can go ahead while taxes on the property remain unpaid. Owner-occupied residences are exempt from building and land tax.
Stamp Duty: The stamp duty in Thailand for the transaction is 0,5% of the sale price of the property. The seller in the transaction normally pays for the Stamp Duty in Thailand. Note that if Specific Business Tax then the Stamp Duty is not payable
Withholding Tax: A foreigner in Thailand is subject to income tax on assessable income. Rental income from a tenancy is subject to personal income tax, according to Thailand Revenue Department. This tax will vary according to who the seller is being either a person or a company. If the seller is a company then the withholding tax is fixed at 1% over the registered sale value or appraised value (whichever is higher). Real properties put to commercial use (e.g. residential houses not 'owner occupied') must under the Building and Land Tax Act pay a 'rental' tax at a rate of 12,5 % of the annual rental value or the annual assessed rental value, whichever is higher. This means that if the owner's self-declared value appears unreasonably low then local authorities have the authority to adjust it.
Capital gains tax: There is no capital gains tax in Thailand, but if you decide to sell your property within five years from the date of purchase, you will have to pay an income tax. This ranges between one and three per cent of the sale price, depending on how many years you have actually owned it.
To qualify for foreign ownership under the Thailand Condominium Act a foreign buyer is required to send the full purchase price for the condo into Thailand, unless he is a resident in Thailand or eligible for foreign ownership under s 19 of the Condominium Act. Proof that the funds used to purchase the condominium were remitted from overseas in foreign currency as otherwise the Land Department will not permit the transfer of ownership of a condominium to a foreign buyer. The foreign currency:
- Must be of an amount at least equivalent to the purchasing price of the condominium, or the condominium appraisal price; and
- Remitted from overseas; and
- Brought into Thailand; and
- Exchanged in Thailand; and
- either be from a bank account in the name of the foreign buyer; or transferred to a bank account in Thailand in the name of the foreign buyer.
You should also tell your bank to add the following details on the wire transfer form: “as payment due on the purchase price of condominium unit no.  in the  Condominium”.
Frontier Investing has two main ingredients. The first is the entrepreneurship and vision needed to look around you and then look ahead and envisage what will be needed in the future, where opportunities might be lying in wait and so on. The other ingredient is the actual leadership model employed to make things happen. Two-thirds of the millionaires surveyed recently by Spectrum Group Research described themselves as “very comfortable” with the fees they pay for financial advice. Many Ultra High Net Worth Investors are happy to pay even 20% based on performance as they know they are paying for the skill they don’t have and either don’t have the time or the inclination to obtain it. Yet make no mistake, finding new frontier investment opportunities is a full time occupation. Investing in frontier opportunities means you saving money and aren’t paying for the enormous salary packages most CEOs seem to get nowadays. Active money goes further. Our approach to investing over the long term is strategically active, we don't believe in waiting for results without any action or change, or hoping for the market to turn in our favour every time. We need more than hope, we need opportunities and potential and the foresight to recognise these when we see. We discuss some of the opportunities we have found through thousands of hours of research and through networking with people from a wide range of industries and disciplines. Asia bears the characteristics of the super-cycle, which could transform the world economy over the next few decades, or I’d say return the world economy where it was pre-1820s. China is delivering 50 years of US economic advance every 10 years, five times faster than the US. India is already the world's 10th largest economy and a home to the world’s second biggest population of 1.2bn people, half of whom are under 25. India will become the world’s third-largest economy by 2030 and grows faster, on average, than China. South Asia, as a region, contains one-fifth of the world's population which no longer wants to have a standard of living 1 -20 times worse than in the US. And as the economies improve, the people spend accordingly eating better foods, driving better cars, watching better TVs and living in better quality homes.
By 2030, India could be 8.4 times bigger than it is today, while Asia is estimated to grow 4 times bigger and the rest of the western world about 1.7 times larger. Would you rather invest $100,000 to turn it into $170,000 or do you prefer $840,000 instead, probably paying about $50,000 a year in dividends?
Indonesia, which recently introduced a 5 year economic development plan and a compulsory land acquisition bill, has 10 times more workers that the UK and is the world’s fourth most populous nation. This is the market growth I want investors to capture. It took the United States one hundred years to double their GDP and it took Korea just 15 years.
Thailand enjoys a strategic location and serves as a gateway into the heart of Asia - home to what is today the largest growing economic market. Thailand offers convenient trade with China, India, Indonesia and the countries of the Association of Southeast Asian Nations (ASEAN), and easy access into the Greater Mekong sub-region, where newly emerging markets offer great business potential.
The first thing anyone looking for frontier investment opportunities should do is rule out everything close to home. If we keep the ‘next door’ mindset and look further afield, we can use it to look next door to established booming areas of moneymaking with real estate. The Thai middle class is growing at a phenomenal rate and these people are looking for ways to spend their new wealth and enjoy their ability to consume on a western scale. People, individuals, own businesses and make vast profits. There are Thai billionaires and these people are viewed as national heroes for bringing prosperity and growth to Thailand. When it comes to property investing in a frontier market, it pays to check out the developers you are investing with as much as the actual investments themselves. Companies that are up front, transparent and provide plenty of solid information on who they are, what they do and so forth are the ones to look for. Please, consider the companies which we listed in Trusted Developers.
The next important topic worth exploring and which is crucial to understanding property investment in Thailand is the legalities associated with property ownership. It is commonly thought that potential buyers of property in Thailand must have to form a company in Thailand in order own freehold property. This was true until the Condominium Act of 1979 was passed. So in other words this has not been true for over 3 decades now! For over 30 years it has been possible for foreigners to purchase condominiums in their own names and on a freehold basis. The Condominium Act in Thailand (B. E. 2522) has been amended in 2008 to allow additional protection for owners and flexibility. You can buy a condo in Thailand in your own name, your retirement fund’s name, a company name or a joint-venture. In the past it has been common for foreign nationals to acquire an interest in Thailand real estate as minority shareholders in a Thai majority company. However in recent years, the Thailand Land Department has become stricter in auditing limited companies for the use of the "nominee" Thai shareholders, who do not possess a legitimate interest in the company owning the land.
Foreigners can own condominiums anywhere in Thailand 100% outright, as long as the building has not already sold its 49% foreign quota. Each condominium in Thailand when registering with the land department designates 49% of its units for sale for potential purchase by a non-Thai buyer. Since we are now considering the legalities associated with the purchasing of property in Thailand, it is hugely beneficial and important that know precisely what a ‘condominium’ is defined as. There are those who incorrectly use this term interchangeably with the phrase ‘apartment building’. There are however notable differences between the two. Current Thai defines a ‘condominium’ as “…an estate in real property consisting of  an undivided interest in common in a portion of a parcel or real property, together with  a separate interest in space (such as an apartment, a store, an office) in a residential, industrial or commercial building.”
What this means is that when you purchase a condominium in Thailand you are also buying the rights to two lots of property. One is the area inside the four standing walls holding up your apartment which belongs only to you. Two is a share in the ownership of all the common areas in the building and its grounds for e.g. the terrace on the roof, any gardens, hallways, swimming pools, tennis courts and sitting areas. This in turn means that owners can be members of the Owner’s Association and are able to provide their input with regards to the running of the building. A notable example is the owner has a vote in deciding who will be the ‘Juristic Person’ charged with the responsibility of running the condominium on a daily basis. The owner will also have a say in the total amount to be paid with regards to yearly maintenance fees, future facilities the building may offer, the painting of communal walls, the implementing of tables and chairs in common areas and who is contracted to keep the gardens and communal areas clean and tidy. On the other hand there is the apartment building owned by one or more people, which in most cases is the original developer. Owners of units inside this kind of building have no legal rights when it comes to the daily running of the building. That said there are rare occasions when residents may be able to provide some kind of input however the owner still has the final say.
Investing in property in Thailand is a very attractive option for those seeking to make long-term profits and for those who are considering residing or one day retiring to live in this beautiful Kingdom. Up until this point in time, investing in property in Thailand has been relatively limited, however as Thailand continues to open its doors and arms to people from all over the world, new opportunities to invest in property in Thailand have also arisen. If you have ever thought about investing in property in Thailand, now is certainly the perfect time to act on those thoughts. Thailand attracts a diverse group of foreigners wanting to invest in its land and property. These include those with no connections to Thailand but still want to add that element of diversification to their current investment portfolio, expats who are currently employed by Thai companies, retirees and institutional and business investors.
Many investors and potential investors understand that Thailand holds great economic potential and for many it is, too put simply, beautiful and pristine land in a welcoming country, which is not an easy thing given the current situations in many parts of the world. Thailand has and continues to be the a top destination for retirees from the Western world who want to spend the final part of their lives bathing in sunshine, swimming in clear blue waters, eating exotic tropical fruits and mingling with the locals. Thailand offers a cost of living that cannot be matched in many parts of the Western of the world.
Thailand has a population of about 67 million people with foreigners making up a significant portion. Some estimates have non-Thai people living in Thailand set at about four million, which is one in 16 people. Many of these people come from those nations who share borders with Thailand and have fled persecution. There are also more a quarter of million expats living in Thailand from nations all around the world including as far north as Sweden and Norway and as far south as Australia. Many of the foreigners living in Thailand are males who have married Thai women with the former providing almost all of the investment funds.
The nationality of foreign investors varies according to the kind of asset under consideration. For example foreign investors from Japan, Singapore and the US make up more than 50% of total investors when it comes to equity capital and reinvested earnings. A slightly different picture is painted when we look at foreign investment in Thai stocks and shares with citizens from the UK, Singapore and the US comprising over 70% of total investors.
It is important that investors have the right mindset when it comes to land and property in Thailand. The crucial first question one must ask themselves is ‘why am I investing Thailand’? This should encourage you to deeply consider the motivations and reasons driving your decision to potentially spend significant amounts of money. Knowing answers to these questions provides you with a solid foundation from which you can then build on. It is also important that you be aware of and make sure you do not exhibit some of the typical behaviours that can often lead to bad financial outcomes. For example are you wearing rose-coloured glass? Meaning you need to be realistic about the situation. Are you acting out of desperation which in turn is affecting your decision making process? Grabbing onto a financial lifeline in a time of desperation is not always the best business decision. You need be realistic about your situation making sure you are doing your due diligence and undertaking planning instead of daydreaming and relying on luck and wishful thinking. Investing in property in Thailand requires bringing money into the country. So one of the first things you will need to do is open a banking account in Thailand. Once established you will need to think about how much money you want to transfer into that account and what is the best way of getting your money into this account. One thing you do not have to worry about limits being placed on your transfers because Thai law does not stipulate a legal limit that you must abide by.
If you are considering relocating to Thailand you should however be mindful of the amount of money that will be needed to support yourself as you establish yourself and money that will be needed for things like professional advisory fees associated with the cost of doing business in Thailand. In the long-term the major factor in helping to determine the amount of funds you will need to live will be to what extent you choose to adapt to local custom. Eating and living like the locals is significantly cheaper than choosing to live a predominantly western lifestyle in Thailand for e.g. buying western items and frequenting Western restaurants. Other important factors include money that you need for your health, your dependants, other kinds of lifestyle preferences e.g. internal travelling and buying a car and where you choose to establish yourself in Thailand. Living somewhere like Phuket is going to hit your hip pocket a lot harder than living somewhere like Chiang Mai where there are relatively fewer western restaurants and western tourists.
Millennials are driving the future and Asian-Pacific Millennials in particular are choosing to live on their own and choosing to rent rather than own a property. Researchers have however found that despite renting now many of these Millennials still aspire to one-day own property. Asian-Pacific Millennials make up 25% of total workforce in the region, which represents the fastest growing source of spending power in the region. These Millennials are the most influential demographic when it comes to considering future real estate trends.
Asian-Pacific Millennials hold property ownership as a priority but not if it is going to take away from their quality of life, that they like to play meaning they like to travel, be entertained and eat out. Potential and current landlords need to be aware of these future trends when investing in property in places like Thailand or they risk incurring massive financial hits. Landlords need to understand that the priorities of this generation are very different to those of past generations. These Millennials see apartments, shopping centres and work offices as more than just places to live, work and play.
Interest in Thailand continues to remain strong. In Thailand in recent times we have seen condominium prices rise about 60% since 2009. In comparison, gold price increased by around 11% during the same period. Thai property is the new gold! Central bank data shows that demand for Thai condominium’s has remained consistently strong in the face of worrying external factors like China’s slowing in growth. Japanese investors are looking for good rental yields on their investments and are increasingly turning their attention to Thailand whose condominium market is continuing to go from strength to strength. Is what we are seeing in Thailand a replay of what happened in Japan? The great interest in and continued selling of condominiums in Thailand is comparable to what we have seen in Japan in the 1970s. In 2013 the per-capita gross domestic product of Bangkok and in provinces close-by was about US$11,000, which is comparable to the situation in Japan in the 1970s. This means that Thailand is starting to look like an increasingly attractive option for many investors for a number of reasons. More and more people are looking for a better-quality suburban lifestyle as the Southeast Asian region continues to undergo rapid economic expansion which has brought with it things like frustratingly long traffic jams, which of course leads to more accidents on the road and increasing pollution, which has major ramifications for the health and wellbeing of its residents. For many, and understandably so, breathing fresh and clean and being able to drive around without great risk of accident are major priorities.
Expatriates currently comprise more than 90% of total tenants renting residential properties located in Bangkok where the rent is more than THB 20,000 per month (which is about $US 565 or 525 Euros). Most of these expats who have arrived in Thailand to work have shown that they prefer to rent rather than purchase property. Renting makes a lot sense for them given their stay in Thailand is typically a couple of years. Furthermore there are a lot of barriers for them when it comes to borrowing money to fund the purchasing of property in Thailand. As the number of work permits awarded by Thai government to expats continues to increase there will be in an increase in demand for rental properties. So if you are looking to purchase a property in Thailand with the aim of renting it out for the short or long term, it is safe to say you will receive plenty of applications from prospective renters. Statistics regarding the reselling of completed freehold units in Thailand is also very encouraging and trending upward, meaning you should encounter little difficulty should you decide you want to sell your new investment.
Bangkok rental demand for expatriate standard apartment and condominium rental units remains steady, with the overall occupancy rate standing at over 90% for apartments, and for well-managed condominiums. The number of Chinese expatriate employees has doubled over the last five years, becoming the second-largest expatriate nationality. Japanese nationals used to account for over 25% of the expatriate working population in Thailand, which is now down to 22.8% as of the third quarter of this year. The Sukhumvit area remains the most popular, owing to its convenient access to the BTS Skytrain, complemented by the variety of restaurants, shops and international schools.
There is also encouraging news with regards to the developing of new mass transit lines in Thailand which will have the effect of stimulating property sector growth and increasing demand in locations where the new transit lines are installed. For example the new Orange Line project, which is 39.6 kilometres in length and is comprised of 30 stations and two sections – the Thailand Cultural Centre-Min Buri and Taling Chan-Thailand Cultural Centre, has already resulted in a new surge for condominium supply on the Rama IX Road. Bidding for the project will begin next year. Details of two new projects totalling 5.3 billion baht are also set to be released soon and will also no doubt result in a surge in interest in these areas. Thailand is developing and it is developing fast, so if you are interested now is definitely the time to check out land and property in these new and up and coming areas. According to the government’s infrastructure development plan next year, the Purple train will also begin operating thereby opening the West of Bangkok. The Orange line mass transit will also begin the bidding process for its construction that will connect the North Eastern part of Bangkok. This will no doubt open up new areas for property development.
Another important aspect worth considering is the relation between loneliness, co-living and property development in Thailand. As the world becomes increasingly isolated due to our increasing reliance on digital technology, more and more people are motivated and inspired by meaningful connections. People do not want to be isolated and lonely which leads to a myriad of problems including lower life expectancy and increase chance of health problems. They want to meet new people and to feel the connection that can only be felt amongst human beings. This loneliness is fuelling co-living in Thailand and developers are starting to meet this demand by producing new condominium projects that aim to bring residents together. Two new developments, The LINE Sukhumvit 101 and The LINE Phahon-Pradipat are two pertinent examples. Both projects have adopted the concept of co-living and focused on providing communal living spaces. People want to feel like they are amongst family and friends and these projects aim to fulfil that desire.
Bangkok has become a more inward-looking city where the best offices, retail developments and hotels are located in the city centre. Therefore the downtown area will continue to be the most sought-after address for high net worth people and younger generations. Prices of older condominium projects have not kept pace with new properties. As prices of newly launched condominium units continue to rise, there exists more opportunities for the prices of older condominium units to increases particularly for large two and three-bedroom units where there is currently a limited new supply. There currently exists demand form buyers who are seeking large condominium units in the most-prized locations, however hey are unable to afford the skyrocketing and record-making prices of the newer projects. The magnitude of the resale prices is however largely affected by the design, location and quality of individual properties.