STOP ME....Repatriation of funds in Thailand

[rickfarang]

I am starting to think that buying a condominium in BKK is a better investment than keeping it in certificates of deposit, and less risky than many more lucrative investments, especially since the U.S. dollar is sinking with no end in sight. (Somebody stop me if you think this whole concept is really dumb).

 

In order for this to make sense as an investment, I would need to see how the money could be repatriated when I to sell and invest the money in Europe or the U.S., so here is the question:

 

Can anybody tell me about Thai laws governing sending personal funds abroad, and if there are any laws that address this particular case? If so, please do.

 

Thank you in advance

[torrenova]

Isn't that why you need a tor sor sam (or whatever) to show that the funds came from outside Thailand. I understand that if you have that, then you can repatriate funds.

[SingaporeSteve]

torrenova said:

Isn't that why you need a tor sor sam (or whatever) to show that the funds came from outside Thailand. I understand that if you have that, then you can repatriate funds.

 

Any documentary evidence from a Thai bank is sufficient to allow money to be repatriatted, such as a bank passbook, currency exchange chit etc - the tor tor sam is only used when purchasing a condo in your own name for the purposes of showing that the money came in from abroad and that the transfer equals the price you are paying for the condo.

[OCgringo]

what is the TAX on any profits you make buying and later selling the condo ?

[SingaporeSteve]

I'd think long and hard about moving out of the US$ currently. If it was me - I'd be spreading things around but certainly not buying big time into the Thai Baht at the moment from the US$ unless you have a sure fire income.

 

Other currencies are still quite high such as the Euro, pound, Aussie dollar.

 

Thailand has already stated that they MUST remove the cap on diesel fuel - its now costing 200m baht A DAY - so far accumulated subsidy is somewhere around 70,000,000,000 baht and its not been paid for by all accounts.

 

So in that scenario, what will happen when diesel goes up by 4 baht a litre to its unsubsidised price? Given it went up 60 satang (less than 1/8th of the subsidy) last week and already everybody is clamouring to increase bus fares, boat fares and even Unilever has announced their shampoo will have to go in price as a result - whats going to be the end result when the full subsidy HAS to come off? I would assume inflationary pressure will start to come into play given that 90% of fuel used in Thailand is diesel. Everything will have to go up in price and the danger is that it could lead to a weakening of the Thai baht on international exchanges.

 

If this happens, even on a small scale, where do you think Thai's will put their money to get it out of baht? - I would guess gold is the obvious choice as its easily tradable and not subject to foreign currency restrictions but IS priced in US dollars. So, I'd either hold tight on the dollar or if you have some money in Thailand, then buy into gold as a defensive position against weakening of the baht and possible upside on the local Thai baht price.

 

Now if you are thinking of a condo purchase, think long and hard about who is going to rent it. Developers cannot sell what they have already and there are some 4,000 odd premium market condo's coming into the supply chain over the next year or two. Given that the average Thai cannot afford rentals over 40,000 baht a month - who is going to rent them? I see no proof that expats in this price range are dramatically increasing to mop up this capacity in Bangkok. Most of the inward investments are taking place OUTSIDE of BKK. Nobody I am aware off has set up a regional HQ in BKK, to even replace the 40 highly paid Kimberly Clark expats that were sent home when KC closed its regional office here last year. So with one quick move, you have 40 premium condo owners needing them filled. Many will have to drop and keep dropping the price or they remain empty. To my mind the BKK condo market is going to get ugly before it gets better. If you really want a condo then think of cheap units around 10-20,000 baht a month but even then your ROI is only around 3/4% and hardly worth the hassle.

 

Just my thoughts.

[SingaporeSteve]

OCgringo said:

what is the TAX on any profits you make buying and later selling the condo ?

 

No idea - never bought a condo. There is something in the tax rules that states you can keep capital gains taxfree on property if you buy another one with the proceeds in a year.

 

If buying as say a retiree outside of the tax net, not sure you have to pay anything if it increases in value, except of course, you can only take out the hard currency you bought in.

[jitagawn]

It is very easy to buy in LOS but getting $out of the Thai Real Estate Residential Market is

very difficult.IMHO Been here long time...

[torrenova]

SingaporeSteve said:......except of course, you can only take out the hard currency you bought in.

Are you saying here that if Someone pays Bt2,000,000 for a condo and then sells it for Bt3,000,000 that he can only repatriate Bt2,00,000 out of Thailand ?

[SingaporeSteve]

My understanding (and bear in mind I have not done it personally with condo's, but same principle will apply on any foreign exchange movement) is that you can take out what you bring in.

 

Therefore, assume you bring in 10,000 US$ to buy a condo which BUYS say 380,000 baht - when you come to repatriatte the money, you can BUY 10,000 US$ with Thai Baht at whatever is the prevailing exchange rate. You cannot buy more than the 10,000 US$ because thats what you brought in originally. Now saying that how many people in addition to buying a condo will have brought other money in. If they can prove what they brought in via bank passbooks, they can repatriatte it. However the BOT has a limit of 10,000 US$ in what they term a reportable transaction. If you transfer out say 5,000 US$ every 2 or 3 months from an account that has had that kind of money paid in, then the bank will do the transfer without any issue. The issue is where you suddenly have couple of million baht that you want to convert into another currency and send out without any record of ever having brought it in. Slightly different rules apply to people with owrk permits as they have a tax paid salary, however the transfer has to be in line with that salary. So for example a guy working for 2 years earning 50,000 baht month, cannot suddenly say, I want to send 2,000,000 baht back home - for the simple reason that his salary of 50,000 x 24 months is considerably less than the amount he wants to remit.

[torrenova]

I wasn't under the impression that Thailand had currency restrictions but that there was a need to show money coming into Thailand for property purchases in order to avoid money laundering etc.

 

There a re fairly standard limits around the world now for amounts over which records are kept. In the UK it is GBP10,000, in EUR I think it is 15,000.

 

I would have thought though that you could repatriate all funds from a property sale, perhaps subject though to having some official documentation, akin to the tor tor sam.

 

It is one part of property purchae which does not really seem to be discussed on any of the forums I have seen and as i'll likely be buying this year, it will directly affect me.