Buying Condo With Work-permit

[allan400]

Hi! I am in the process of purchasing a condo. I have read that I need a Foreign Exchange Transaction Form (FETF) to proof to Land Department that the money came from abroad - else can't transfer the ownership to my name.

But my question: As I am working here, and I have a work-permit, do I still need to get this form, or can I use money I have earned here locally?

Thanks!

Br

Allan

[Maestro]

This is what section 19 of the Condominium Act B.E. 2522 (1979) says:

Section 19¹ Aliens and juristic persons regarded by law as aliens may hold ownership of an apartment if they are the following:

(1) Aliens permitted to have residence in the Kingdom under the Immigration law;

(2) Aliens permitted to enter into the Kingdom under the investment promotion law;

(3) Juristic persons as provided in Section 97 and 98 of the Land Code and registered as juristic persons under Thai law;

(4) Juristic persons which are aliens under the Announcement of the National Executive Council No. 281 dated November 24, B.E. 2515 and have obtained promotion certificate under investment promotion law;

(5)² Aliens or juristic persons regarded by law as aliens who have brought in foreign currency into the Kingdom or withdraw money from Thai baht account of the person who have residence outside the Kingdom or withdraw money from a foreign currency account.

¹ Amended by Condominium Act (No. 2) B.E. 2534 (1991)

² Amended by Condominium Act (No. 3), B.E. 2542 (1999)

It looks like you will have to send your Baht abroad and then remit it to Thailand again.

--

Maestro

[allan400]

Hi, Thanks. I also talked with Bangkok Bank, and they informed they have 1 way out: It's possible to open a non-resident Thai Baht account, and then transfer to this account and back again. In this way they can also issue the Foreign Exchange Certificate Form. It's like a work-around if you have work-permit, and widely used. Will check it further.

Br

Allan

[BangkokWildcat]

Hi, Thanks. I also talked with Bangkok Bank, and they informed they have 1 way out: It's possible to open a non-resident Thai Baht account, and then transfer to this account and back again. In this way they can also issue the Foreign Exchange Certificate Form. It's like a work-around if you have work-permit, and widely used. Will check it further.

Br

Allan

This is correct. I just finalized my purchase a few weeks ago (being in the same situation). Opened a non-Resident account w/ HSBC (very good and professional bank/service) and all the funds I deposited into my THB account were certified without having to transfer out/in. I did have to show a letter from HR confirming my Salary, 6 months (possibly more, can't remember) of payslips, bankbooks, and last year's tax form to prove I had earned it. Not sure if my banker was just preparing for all contingencies or this is the bare minimum but my purchase / transfer went through without a hitch and through one of the more corrupt land offices in Banlampoo-Lang (according to my banker) without needing or being asked for any bribe money! Maybe due to all the paperwork evidence we had / we provided in advance......

One more thing, just keep in mind your Non-resident Acct. is non-interest earning (well, kind of a joke in these economic times but still something to consider) so you don't want to "park" it there too long before using it for your purchase.

[tangoll]

I don't understand why, if a farang has a work permit, he/she needs to show foreign exchange transaction form for a condo purchase. With a work permit, he/she is eligible to obtain a local thai baht bank mortgage (whether one is granted depends on bank policies, etc.), and if he is granted a mortgage, he does not need a FETF to cover the mortgage amount when he does the transfer at the Land Dept office. Am I missing something here?

[BangkokWildcat]

I don't understand why, if a farang has a work permit, he/she needs to show foreign exchange transaction form for a condo purchase. With a work permit, he/she is eligible to obtain a local thai baht bank mortgage (whether one is granted depends on bank policies, etc.), and if he is granted a mortgage, he does not need a FETF to cover the mortgage amount when he does the transfer at the Land Dept office. Am I missing something here?

Currently, I believe no Thai banks are lending to Farangs (at least when I checked....HSBC is the only one). I would be shocked to be wrong about this.

If you have a work permit, I believe you must have it (the funds) either certified by the bank through the non-resident account described above or FETF for incoming foreign currency. If you are able to get a mortgage, then of course you wouldn't need a FETF if it was in THB. However, mine was in USD and again, I believe this is the only current method available (via HSBC and via USD or EUROs) to Farangs who are doing the transaction without a Thai husband / wife.

I don't know about those married to Thais and are doing the transaction as a couple.....I believe the Thai partner can get one with the Farangs income used to support the application.

[trogers]

I don't understand why, if a farang has a work permit, he/she needs to show foreign exchange transaction form for a condo purchase. With a work permit, he/she is eligible to obtain a local thai baht bank mortgage (whether one is granted depends on bank policies, etc.), and if he is granted a mortgage, he does not need a FETF to cover the mortgage amount when he does the transfer at the Land Dept office. Am I missing something here?

The land law requires a foreigner buy a condo using money brought in from overseas to pay for 100% of the transaction price.

(5)² Aliens or juristic persons regarded by law as aliens who have brought in foreign currency into the Kingdom or withdraw money from Thai baht account of the person who have residence outside the Kingdom or withdraw money from a foreign currency account.

What you mentioned can be applied only after the title transfer, when you mortgage the condo unit to a finance institution.

Foreigners cannot use funds borrowed locally to acquire a condo unit in Thailand. Thus, the land officer will not permit the title transfer.

[BangkokWildcat]

I don't understand why, if a farang has a work permit, he/she needs to show foreign exchange transaction form for a condo purchase. With a work permit, he/she is eligible to obtain a local thai baht bank mortgage (whether one is granted depends on bank policies, etc.), and if he is granted a mortgage, he does not need a FETF to cover the mortgage amount when he does the transfer at the Land Dept office. Am I missing something here?

The land law requires a foreigner buy a condo using money brought in from overseas to pay for 100% of the transaction price.

(5)² Aliens or juristic persons regarded by law as aliens who have brought in foreign currency into the Kingdom or withdraw money from Thai baht account of the person who have residence outside the Kingdom or withdraw money from a foreign currency account.

What you mentioned can be applied only after the title transfer, when you mortgage the condo unit to a finance institution.

Foreigners cannot use funds borrowed locally to acquire a condo unit in Thailand. Thus, the land officer will not permit the title transfer.

Really? Are you 100% sure about this? I never heard about it but it wouldn't surprise me. In any case, I never got a local bank to consider.....Did chat briefly with SCB but they would not lend to farangs (solo) at that time....they didn't mention I couldn't use local, borrowed money though. Since I had to use a USD mortgage, it's a moot point though.

Interesting if accurate.

[trogers]

Foreigners cannot use money earned locally and deposited in their local bank account to acquire a condo, even if they have the total amount for the transaction. Thus, locally borrowed money will be similarly rejected.

What a friend of mine did was to borrow foreign cash from his boss who is overseas by remitting the foreign currency to my friend's local bank account, and process the TT3 bank statements for use in the title transfer.

Thereafter, my friend took the title deed and mortgaged the condo, and then repay the loan from his overseas boss.

[BangkokWildcat]

Foreigners cannot use money earned locally and deposited in their local bank account to acquire a condo, even if they have the total amount for the transaction. Thus, locally borrowed money will be similarly rejected.

What a friend of mine did was to borrow foreign cash from his boss who is overseas by remitting the foreign currency to my friend's local bank account, and process the TT3 bank statements for use in the title transfer.

Thereafter, my friend took the title deed and mortgaged the condo, and then repay the loan from his overseas boss.

Sorry but I think this is incorrect. I have worked here the last 7 years and used locally earned currency savings against the purchase of my condo. I had to provide support docs for this (ie. bankbooks, salary letter from HR, tax return) and my banker was very organized / professional. The whole point is that if you are here legally, working legally, then you can have the bank certify your local money against the condo purchase by way of the non-interest bearing "nonresident account".

I did just this a few weeks ago with HSBC and had absolutely no issues. I did have to borrow the other 50% from HSBC (in foreign currency) as I didn't have enough local money saved.

[trogers]

You are the first foreigner I have met who would put aside local earnings into a non-interest bearing "nonresident account" for 7 years.

[BangkokWildcat]

You are the first foreigner I have met who would put aside local earnings into a non-interest bearing "nonresident account" for 7 years.

No I didn't....I parked it there for less than a few months (would have been less time than this but I lost my bid on another unit at the same complex as it was a "bare shell" and HSBC doesn't finance bare shells).....I had my savings at Bangkok Bank in a normal interest bearing account and transferred to my Non-resident at HSBC earlier this year.

[pkspeaker]

so there is no way a foreigner can buy a condo without FETF form that proves the money came from abroad.. is this just for new condos bought from a developer or is this also for a condo bought from another foreigner?

[allan400]

It is exactly the same if it's bought from developer or another private person. Reason is that the Land Department need the FETF to transfer the condo ownership to your name. You can buy the condo, but you cannot transfer it to your name....

When you open the non-resident account in e.g. HSBC, and then transfer the money back and forth, then it's only for the purpose of getting the FETF, as this process will entitle you to get the same form as if money were transferred from outside Thailand.

The total amount for the FETF need to be at least the amount of the condo price. I am using 2 forms to buy mine (2 transfers).

[pkspeaker]

I appreciate the education, you said you can buy the condo, but you cannot transfer it to your name.. what happens to people who walk into a real estate office and buy a condo, only to find out that they cannot transfer it to their name..do they then quickly try to fix you up with some company thing? The reason i'm asking is because i have visited a real estate office and mentioned I wanted to own one in my name and they didn't say anything about this requirement--they seemed to think it would be no problem and i could own one as long as i have the money.. is it just that they will say anything to complete a sale?

[BangkokWildcat]

It is exactly the same if it's bought from developer or another private person. Reason is that the Land Department need the FETF to transfer the condo ownership to your name. You can buy the condo, but you cannot transfer it to your name....

When you open the non-resident account in e.g. HSBC, and then transfer the money back and forth, then it's only for the purpose of getting the FETF, as this process will entitle you to get the same form as if money were transferred from outside Thailand.

The total amount for the FETF need to be at least the amount of the condo price. I am using 2 forms to buy mine (2 transfers).

Hi Allan, I just want to make it clear that the money that I had earned in Thailand (and always remained as THB) did not need to be transferred to Foreign Currency and back ever....it was counted towards my purchase of the condo. All I did with my THB savings was "park it" in a THB Nonresident account for a few months (and yes no interest was accrued for those few months). It was never exchanged to foreign currency. It was not listed on a FETF but rather "certified" by the bank instead (not sure what the exact term is but it's one of the two methods available to those who work here legally).

So for example, if I had had enough local savings for the entire purchase (and could prove I earned this amount in local currency), then I believe I could have used that (with the banks certification) for the entire purchase. In other words, whatever you earn here (legally with a work permit) you can use to buy and legally own a condo with. You don't need to go the FETF route for that amount.

However, if you don't have enough local savings to cover this, then whatever deficit you have, would need to be brought in from overseas and with the FETF.

[Topprofile]

Foreigners cannot use money earned locally and deposited in their local bank account to acquire a condo, even if they have the total amount for the transaction. Thus, locally borrowed money will be similarly rejected.

You are totally wrong!

[jlelouer]

Foreigners cannot use money earned locally and deposited in their local bank account to acquire a condo, even if they have the total amount for the transaction. Thus, locally borrowed money will be similarly rejected.

You are totally wrong!

Not totally wrong...

The purchasing process is in 2 steps:

1 - You need to register your condo with the Land Dept to be registered as the owner. And they are requesting this FETF from the bank that there has been a transfer from abroad of the purchase amount of the condo. It's the law...

2 - You need to pay your developer. It doesn't really matter where the money come from. You can use your money earned in Thailand, the money you've transferred from abroad, or even the money from a loan, it doesn't matter!

The only condition that allows you to buy without this FETF is if you have a resident permit.