PROPERTY IN THAILAND: Part 19 Bringing in money for property

If you've been around the property business in Thailand you've probably heard about the foreign exchange certificate. What's the significance of this, and how does a foreigner bring money into Thailand to buy property?

The rules for bringing in foreign exchange are fairly well known in connection with condominiums. Remember, unlike the situation with buying land, a foreigner can buy a unit in a condo in Thailand on a freehold basis. Freehold means forever, and is not limited by the period of a lease. The condo unit may, moreover, be inherited by the heirs of a foreign owner, so it's really an ideal way to buy property in Thailand.

But if a foreigner buys a condo unit here, from where must the money come?

It must come from outside Thailand via bank transfer, and it must be sent from the account of the party or parties in whose names the condo unit will be registered. Please note one thing here. If the condo is to be held in the names of two or more people, those people must jointly send the funds into Thailand, from a joint account. In the case of two buyers, it's not enough to say that one of the parties sent the funds on behalf of both, or for both parties to send money separately. They must send the funds jointly, or they can't both be listed on the condo title registered at the land office.

How does one prove to the land office that the funds have been sent from outside by the buyers of the condo? This is done through the foreign exchange certificate, which is a document issued by a bank in Thailand to the effect that the funds have been received from outside of the Kingdom by bank transfer, listing when they were sent and who sent them.

This certificate is filed at the land office at the time of the transfer of the title of the condo unit to the buyer(s).

Why do the Thai authorities require all this paperwork? In part because it's a way of preventing money laundering. If condo buyers can purchase their units using only funds that came from a bank outside Thailand, it means the buyers haven't generated the funds by illegal deals in Thailand such as drugs or human trafficking. It also means that the money can't have been smuggled into Thailand as a result of similar deals outside the country.

The biggest problem for organised crime is getting cash earned illegally into the legitimate banking system. This is the essence of money laundering. Forcing foreign condo buyers to buy the condos with funds already in the world banking system makes it hard to launder funds by buying condos in Thailand.

What about the income brought in when a foreign owner goes to sell the condo unit? There are no foreign exchange controls in Thailand now, so a foreign owner can just send the proceeds of the sale out of Thailand via the international banking system. You should be aware of two things, however.

First, Thai tax laws require taxes to be paid on any capital gains on the sale of the condo. We'll discuss these at a later date.

And second, many people think foreign exchange certificates are guarantees that the funds brought in to buy a condo may be taken out of Thailand at a later date. Not so. There are no foreign exchange controls in Thailand now, and any such sale proceeds may be repatriated. But if Thailand institutes foreign exchange controls in the future, they would apply to funds brought in to buy a condo and might limit the seller's ability to take his or her funds out of Thailand after a sale.

James Finch of Chavalit Finch and Partners (
and Nilobon Tangprasit of Siam City Law Offices Ltd (
Researchers: Arnon Rungthanakarn and Sitra Horsinchai.
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Writer: James Finch & Nilobon Tangprasit