Transferring money/funds for real estate (condo) purchases.

[Senechal]

I'm just going to repeat my understanding of the recommended steps for transferring funds for real-estate purchases to make sure I understand this correctly. This info all comes from this forum, including the pinned thread -- but there is also info from some additional threads here as there seems to be some conflicting information on the forum.

Please let me know if I have this correct:

Transferring money into Thailand to buy a foreign-quota condominium in one's own name using one's own bank account:

1) Have a chat with the bank manager (Not really essential, but always a good idea -- just so he has a heads up).

2) Fill out the Foreign Exchange Transfer Form (FETF) at the Thai bank where you have an account. In section IV of the form, make sure you specify "Condominium Purchase". You must be transferring funds in excess of USD $50,000

3) When filling out your wire transfer in your home country, make sure that you specify that the transfer MUST BE TRANSACTED IN YOUR OWN CURRENCY. This seems to be the most important point. The conversion of (Your Currency) to Thai Baht MUST occur "on shore" in Thailand.

4) Also when filling out the wire transfer in your home country, specify a "correspondent bank" or intermediary bank's SWIFT code and bank address.

5 When the cash arrives in your account, ask the bank to fill out a form registering the transfer at the National Bank for the purpose of purchasing a condominium. You will receive this form some days or weeks later. It is important for your records, and for later transferring funds back out of Thailand should that case arise.

6) There is no time limit on purchasing the condominium once the funds arrive in your account, as long as you can prove that the funds originated OUTSIDE of Thailand.

Questions:

(re: Step 2) I notice the Exchange Rate is listed on the FETF form. Who fills this out? Is this actually a fixed rate once the form is submitted? Wire transfers sometimes take a few days to go through. I would imagine currency movements over the following few days affect the rate. If so, what's the point of agreeing on the rate on the FETF form?

(re: Step 3) I don't see this option listed on a standard international wire xfer form. Am I missing something? Exactly where does one indicate that the currency conversion should be completed by the receiving institution?

(re: Step 4) Is Step 4 really necessary? So, who is the correspondent bank? Why is a correspondent bank necessary to ensure the conversion of funds within Thailand -- and how exactly does the inclusion of an intermediary ensure this? Wouldn't specifying that the transfer be conducted in non-Thai currency by the originating bank suffice? Are there specific banks within Thailand that should be used as correspondents? The pinned thread glosses over this and does not contain any specific information.

(General question) What happens if your own bank does attempt to convert the funds prior to transfer (even though you specified otherwise)? Will the receiving bank in Thailand refuse the transfer? (While this shouldn't be an issue -- US banks are legendary for their boundless incompetence.)

( This thread refers to sending money for a foreign-owned condominium held in one's own name, and using one's own bank account in Thailand. This question DOES NOT address scenarios like company accounts, Thai name, third party accounts, land purchases or other issues -- so please don't clutter up the thread folks! )

Thanks in advance for any info!

Edited December 2, 2013 by Senechal

[falang07]

I just bought a cheap condo for about 500,000 THB, no FETF is issued for such small amount, you just ask the bank to issue a confirmation that the money was wired from abroad and the exchange rate is filled in by the bank (it is the exchange rate that was used to convert your foreign currency to THB). Bangkok Bang charges 100 baht for this paper, issued immediately.

[falang07]

-------------------------------

(General question) What happens if your own bank does attempt to convert the funds prior to transfer (even though you specified otherwise)? Will the receiving bank in Thailand refuse the transfer? (While this shouldn't be an issue -- US banks are legendary for their boundless incompetence.)

-------------------------------

In case this would happen, which I really doubt, you would have to contact your bank and ask them to revert the payment and reimburse you for all the losses incurred to you. The receiving bank would not refuse it (why would they?).

Edited December 3, 2013 by falang07

[falang07]

re your step 3: this is done by specifying the currency you want to wire, so if you instruct your bank to send 2,000 USD, they must send USD. If you instruct them to send 2,000 THB, they will first convert your USD to THB and then wire directly THB. So just wire USD, EUR or whatever currency of yours and you will be fine.

[mortenaa]

Re step2. I regularly get transfers in foreign currency to my account. When the amount is around USD 20,000 or higher, the bank will call me and agree on the exchange-rate. So thats the rate going on your FETF form.

This form is issued on all transactions higher than USD20K I think, and its meant to hinder corruption amongst other things.

Edited December 3, 2013 by mortenaa

[shaurene]

Hi. I have transferred many times amounts of 100,00, 150,000 and few more, I have Thai bank account. I just did it, did not have to go and see my Thai bank. It has been done in my New Zealand dollars and converted to Thai Baht, made no difference. Just so long as you have proof you sent the money incase you want to send your money out of Thailand later.

[Maestro]

Senechal, you got the chronological sequence wrong.

1. Tell the manager of your Thai bank about the forthcoming remittance to your account.
   Optional, but a good idea.
2. Give your payment order to your US bank.
   You do not "indicate that the currency conversion should be completed by the receiving institution". You type the currency name or symbol (USD) and the amount in the respective fields. That's all about the currency. Fill out the other fields.
3. SWIFT code of correspondent bank.
   Forget about this, not only because you got the the wrong notion about what correspondent bank means. You type the name and the SWIFT code of the recipient bank, ie your bank in Thailand, and if necessary also the bank's address. Depending on how your US bank has programmed this process, when you move to the next screen the bank address may have changed on your display to reflect the address that your US bank has stored in its database.
4. Your US bank debits your account and remits the money to you your Thai bank, either directly or through an intermediary bank. (If your Thai bank is not a correspondent bank of your US bank, the remittance needs to go through an intermediary bank which is a correspondent bank of both your US bank and your Thai bank)
5. Your Thai bank receives the remittance, converts it to Baht, deducts its fee, and credits your account with the net amount.
6. FETF
   You ask your Thai bank for the FETF. This is a formal written record of the exchange transaction carried out by your Thai bank. Regarding the exchange rate, it reflects the actual rate used by your Thai bank to convert USD to THB.
   You keep the FETF in a safe place, in case you should ever need it in future, eg for the registration of your condo at the Land Registration Department, etc.
   The FETF is discussed here in some detail: http://www.thaivisa.com/forum/topic/656136-foreign-exchange-transaction-form/

[Maestro]

Removed an off-topic post about a kitchen.

[Maestro]

Re step2. I regularly get transfers in foreign currency to my account. When the amount is around USD 20,000 or higher, the bank will call me and agree on the exchange-rate. So thats the rate going on your FETF form.

This form is issued on all transactions higher than USD20K I think, and its meant to hinder corruption amongst other things.

The minimum amount for the FETF is now USD 50,000 or the equivalent in any other currency.

[Maestro]

I just bought a cheap condo for about 500,000 THB, no FETF is issued for such small amount, you just ask the bank to issue a confirmation that the money was wired from abroad and the exchange rate is filled in by the bank (it is the exchange rate that was used to convert your foreign currency to THB). Bangkok Bang charges 100 baht for this paper, issued immediately.

If a bank employee has difficulty understanding what you want, some banks call it the credit advice, others the credit receipt.

[Senechal]

Senechal, you got the chronological sequence wrong.

1. Tell the manager of your Thai bank about the forthcoming remittance to your account.

   Optional, but a good idea.

2. Give your payment order to your US bank.

   You do not "indicate that the currency conversion should be completed by the receiving institution". You type the currency name or symbol (USD) and the amount in the respective fields. That's all about the currency. Fill out the other fields.

3. SWIFT code of correspondent bank.

   Forget about this, not only because you got the the wrong notion about what correspondent bank means. You type the name and the SWIFT code of the recipient bank, ie your bank in Thailand, and if necessary also the bank's address. Depending on how your US bank has programmed this process, when you move to the next screen the bank address may have changed on your display to reflect the address that your US bank has stored in its database.

4. Your US bank debits your account and remits the money to you your Thai bank, either directly or through an intermediary bank. (If your Thai bank is not a correspondent bank of your US bank, the remittance needs to go through an intermediary bank which is a correspondent bank of both your US bank and your Thai bank)
5. Your Thai bank receives the remittance, converts it to Baht, deducts its fee, and credits your account with the net amount.
6. FETF

   You ask your Thai bank for the FETF. This is a formal written record of the exchange transaction carried out by your Thai bank. Regarding the exchange rate, it reflects the actual rate used by your Thai bank to convert USD to THB.

   You keep the FETF in a safe place, in case you should ever need it in future, eg for the registration of your condo at the Land Registration Department, etc.

   The FETF is discussed here in some detail: http://www.thaivisa.com/forum/topic/656136-foreign-exchange-transaction-form/

Great response! Thanks for the advice Maestro.

Just to clarify -- the FETF can be filled out AFTER the funds have already been received. Am I understanding that correctly?

[TexasRanger]

Would the same steps be necessary for a deposit on a house mortgage or can I just use funds accumulated in Thai account?

[Senechal]

Would the same steps be necessary for a deposit on a house mortgage or can I just use funds accumulated in Thai account?

These steps are unnecessary for gifts. They only apply to properties that are being purchased for foreign-ownership.

[TexasRanger]

Would the same steps be necessary for a deposit on a house mortgage or can I just use funds accumulated in Thai account?

 

These steps are unnecessary for gifts.    They only apply to properties that are being purchased for foreign-ownership.

That's what I hoped, thanks.

[Maestro]

Great response! Thanks for the advice Maestro.

Just to clarify -- the FETF can be filled out AFTER the funds have already been received. Am I understanding that correctly?

Yes. In fact, it can only be done after the funds are received. It is a record of an exchange transaction that has already taken place.