Should You Invest in Thailand?
Source: GCC Exchange Blog
With the continual decline in the global market to invest in Thailand is deemed to be a great alternative. Thailand is often the first stop for tourists in Asia. Its capital of Bangkok is the world’s most visited country with more than 21 million arrivals last year. As such, many people getting their first glimpse of emerging Asia wonder how to invest in Thailand.
Thailand is a favourite destination for millions of people who seek to enjoy the tropical beaches, beautiful mountains and exotic forests integrated with a flavour & the array of Thai culture. More so, many international companies are choosing it as their central head office to conduct business all over Asia. With a newly industrialised emerging market economy, international investors know the country for its robust growth rates that are being driven by a rapidly expanding population and growing exports around the world.
Off course all this is great news for real estate investors in Thailand. Thailand has seen soaring land prices in major cities paired with world class residential projects by public & private developers. Thailand is the 2nd biggest economy in Southeast Asia that offers diverse real estate investments in cities such as Bangkok, Pattaya, Phuket, and other provinces to foreigners.
Investing in any property market is one of the few investments which when carefully selected will give a healthy ROI (Return On Investment).
Here are essential tips for buying property in Thailand as a foreigner
1. Ownership of property
Although you cannot own land as a foreigner in Thailand, you can still own property on the land without having ownership of the land. Confusing? According to the Thailand government, a foreigner is not allowed to own land. The country still wants to ensure that the locals are the ones who own the land and to prevent skyrocketing prices of lands in the country due to foreign investment.
Can foreigners own property in thailand
Yes, foreigners can own property in Thailand just not land.
However, there are other ways in which you can get the land of your choice and build property on it. See them below:
- Through a Thai limited company – The company will own the land on your behalf. However, you are not allowed to own more than 49% of the shares. The only exception is U.S citizens (Thailand and U.S have a treaty that allows U.S citizens to have full ownership of a Thai limited company)
- Leasehold – A foreigner, can choose to enter into leasehold with the owner of the land. Leasehold is usually 30 years which is renewable up to three times.
When writing the lease you need to ensure that you can leave the land to another person. Reassigning can happen if you want to sell the land or want to change the ownership to your spouse or children.
2. Legal advice
The lawyer should also help you do a comprehensive search of the title deed. You must verify that the person leasing the land has the legal authority to do so. The land development in the country has records of title deeds way back from the first owner. If you are taking over a Thai company which owns the property such as land, house, commercial property make sure all taxes are up to date. Your lawyer must also check to see if there are no outstanding debts, loans and/or liabilities that may get passed on to the new buyer,
There are three types of title deeds:
- Freehold or Nor Sor 4 – Grants full rights to the owner to do with it as they wish as long as it’s according to the law.
- Nor Sor 3 Gor – This means that owner is waiting for the full title deed (Nor Sor 4).
- Nor Sor 3 – The lands department has not yet measured the land.
- Possessory right – Only recognised for its tax payments at local government office.
Therefore the best-recommended title deed to lease for a foreigner would be freehold (Nor Sor 4).
The search will also enable you to know the kind of property that is allowed to build in the area. Yes, there are restrictions on the type of structures in specific areas.
Lawyers will cost you money, but they will be worth it in the end. Remember nobody understands a country better than the locals.
3. Take your time
The desire to own property may make you impatient. The time taken to find the property of your choice may take a few months, don’t be in a rush. But also do not predestinate when a good deal is on offer.
Types of real estate in Thailand include apartment condos, villas, land & commercial. These Thailand investment opportunities have their pros & cons. Ensure that you compare different options and always seek professional advice.
4. A property manager/agent
A real estate agent will guide you on how to buy property in Thailand by foreigners. Finding property in a foreign country can be a challenge especially when they speak a foreign language. It is recommended to get a property agent to help you find a property that is within your budget but can still bring in profits.
Contacting local agents will save you time as they will act as an intermediary between you and the property owner. However, if you prefer dealing with the owner directly, then there is no problem. You just need to be clever in finding private sellers. Look through the local papers as well as Facebook groups to find private sellers.
A property manager will also come in handy. They will oversee the property management when you are not in the country and report to you. You can quickly fly in the country when you need to check the property.
If you are satisfied with the terms of the seller you will be required to leave a booking fee. This is essential when making offers so that the seller knows you mean business. In the case that all terms are in favour your booking fee will make sure that the property is off the market.
Make sure that you have your lawyer present to go through the arrangements to ensure that what you want is indicated in the contract. If the property is under construction make sure that the contract allows for your desired instalments.
There is no need to pay the full amount when the property is not completed. The contract should reflect your buying power as well as legally protect the rights of both parties. So make sure the terms are legal & fully understood.
Caroline is a writer with years of experience in business administration. She enjoys meeting new people and reading more books to get inspired for her own book. Her twitter, @BCarolinebird12.