Avoiding the pitfalls of real estate investment trusts | Bangkok Post: business

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Avoiding the pitfalls of real estate investment trusts

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Effective from Jan 1, 2013 onwards, Thailand has a new alternative investment vehicle, the Real Estate Investment Trust (REIT), which provides greater flexibility in managing real estate assets. Interestingly, the REIT can not only invest in Thailand but also in real assets situated abroad. As the baht gains against major currencies, the REIT seems to have come at the right time, just as foreign investors have been shifting funds here. 

A trust enables financial institutions to deal with property they control for beneficiaries. In 2007, Thailand launched a special law called the "Trust for Transactions in the Capital Market", or the Trust Act, starting the era of trusts in Thailand. But trusts are limited to certain investment activities in the capital market under Security and Exchange Commission (SEC) supervision.

The Trust Act allows a trustor to enter into a written trust deed with a trustee, whereby the trustor will transfer his trust assets to the trustee. To be precise, the role of the trustee is determined under the trust deed to obtain and hold the trust assets under his own name for the benefits of all beneficiaries.

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