Using a foreign currency account in Thailand for buying a condo

[Card]

I will soon be buying a condo for about 4 million baht and need to transfer that from the UK. I usually transfer it as pouind sterling and it is 'automatically' converted into Thai baht when it is deposited into my account at Citibank. I then can get a Forex transaction Form (FET) to use at land registry to prove that I imported the cash to buy the condo.

For me this is always a very nerve wracking experience but what I want to know is:

1. Transferring it from the UK means I am limited to transfers of about 20,000 USD equivalent per day, which I think is a UK banking regulation - which means I will need to make about 5 transfers over 5 days to get my 4 million baht over here - and a lot can happen to the exchange rate during that time.

2. I am looking into transferring the whole 80000 pounds to a foreign currency account at Citibank so it is all there ready whenever I need to make the conversion in one go on the day the exchange rate is favourable. However, if I do it that way DO I GET A FOREX TRANSACTION FORM?

Anyone got experience of using a FCA to buy a condo? I have asked the bank but as always I get very confusing signals, group answers and alternative scenarios. So please answers from those who have done this before. Also any recommendation for a particular bank's FCA?

[moradave]

Never done it, but my experience with Bangkok Bank for foreign currency transactions has always been good. Think they now have FCA's.

[Langsuan Man]

I don't think that you will qualify for a Foreign Currency Exchange Form by using a CitiBank foreign currency account but that should not be your prime consideration. You will literally get screwed big time by changing your currency from a foreign currency account here in Thailand. I would suggest that you check on the regulations and fees associated with moving funds out a a foreign currency account with Citibank

Most posters here have found that foreign currency accounts don't offer any advantages for hedging currency fluctuations and in many cases are reported as being much more expensive that the loss / gain due to currency movements

I also don't understand why you think that any restrictions ( the 20,000 USD amount you mention) would be any different to a foreign currency account versus to a Thai bank account. If they have that restriction it would apply in either case and I have never seen any restrictions on the amount of money that can be sent via a wire transfer (SWIFT) but then again I have not had to deal with English banks

Finally, my experience with CitiBank when I purchased my condo was a very expensive one, since their exchange rate was 1 or 2 baht per dollar lower than any Thai Bank. I only used my CitiBank account to get part of my deposit via ATM's. Since I was exchanging every day using both CitiBank and other US based banks I could dramatically see the difference in Baht rate and believe me CityBank was not pretty

[Card]

I don't think that you will qualify for a Foreign Currency Exchange Form by using a CitiBank foreign currency account but that should not be your prime consideration. You will literally get screwed big time by changing your currency from a foreign currency account here in Thailand. I would suggest that you check on the regulations and fees associated with moving funds out a a foreign currency account with Citibank

Most posters here have found that foreign currency accounts don't offer any advantages for hedging currency fluctuations and in many cases are reported as being much more expensive that the loss / gain due to currency movements

I also don't understand why you think that any restrictions ( the 20,000 USD amount you mention) would be any different to a foreign currency account versus to a Thai bank account. If they have that restriction it would apply in either case and I have never seen any restrictions on the amount of money that can be sent via a wire transfer (SWIFT) but then again I have not had to deal with English banks

Finally, my experience with CitiBank when I purchased my condo was a very expensive one, since their exchange rate was 1 or 2 baht per dollar lower than any Thai Bank. I only used my CitiBank account to get part of my deposit via ATM's. Since I was exchanging every day using both CitiBank and other US based banks I could dramatically see the difference in Baht rate and believe me CityBank was not pretty

Thanks for this - very useful. I have one question, though. Are you referring to your Citibank account in the USA or in Thailand? If you were looking at exchange rates when you withdrew cash from your USA Citibank account via Thailand ATMs then the rate would be set by the USA Citibank, not the Thai one.

Citibank Thailand is only affiliated to the US bank, as far as I am aware and it seems they give good buying TT rates as good if not better than at least BKK bank and Kasikorn bank. However, I think the Citibank Thailand rates are spot rates, not guaranteed for the whole day. Forget the daily limit - I found that my offshore bank does not set daily limits, but many UK banks do.

[Langsuan Man]

At the time I had a CityBank account in both the US and Thailand. But after the experience of lower exchange rates and not being able to EFTS from the US account to the Thai account I dropped both since I no longer lived in BKK. So using their ATM machine was not practical. It has been reported here at TV that they , like Thai banks , charge the 150/180 THB fee for use of a foreign ATM card

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

[Card]

At the time I had a CityBank account in both the US and Thailand. But after the experience of lower exchange rates and not being able to EFTS from the US account to the Thai account I dropped both since I no longer lived in BKK. So using their ATM machine was not practical. It has been reported here at TV that they , like Thai banks , charge the 150/180 THB fee for use of a foreign ATM card

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

I am still trying to ascertain which bank set the exchange rate that you did not like before. You said you used an ATM card. So I assume you withdrew thai baht cash from a Thailand ATM machine using the ATM card from your USA Citibank right? If so, then what happens is that your USA Citibank would convert dollars into baht to replace the amount you withdrew in thailand. So it is the USA bank that set the bad rate. If you sent dollars from the US to the Thailand Citibank then the Thai citibank would set the rate and I believe it is usually a good rate. Can you clarify?

I don't know what you mean by EFTS but I assume electronic transfer (TT). The Citibank Thailand is not a branch of Citibank USA because foreign banks are not allowed to operate as such in Thailand. It is more like a franchise and I believe all foreign banks operating in Thailand are the same. For example, if Citibank USA went bust - it would not be able to draw reserves from the Thailand branches which would be safe. That is probably why transfers from foreign banks to their franchises in thailand have to go through the usual set of hurdles. This may not apply to branches of say BKK bank in London when transfers are made to BKK Bank accounts in thailand.

[falang07]

The answer is YES, you will get a FOREX TRANSACTION FORM even for currency exchanged in Thailand. So I confirm you can do it that way.

[falang07]

And the reason is simple, you just need to prove that the currency exchange took place (i.e. that you bought Baht for any foreign currency, because this is the reason for the government to impose this rule, to support the Baht), so in the end, it is not important if you import the money physically . In theory, you could even exchange Baht to let's say Euro and then back to Baht, but you would loose quite much if you did the backward exchange in the same day, or even at a later date, unless the exchange rate would move in the right direction.

[Langsuan Man]

I am still trying to ascertain which bank set the exchange rate that you did not like before. You said you used an ATM card. So I assume you withdrew thai baht cash from a Thailand ATM machine using the ATM card from your USA Citibank right? If so, then what happens is that your USA Citibank would convert dollars into baht to replace the amount you withdrew in thailand. So it is the USA bank that set the bad rate. If you sent dollars from the US to the Thailand Citibank then the Thai citibank would set the rate and I believe it is usually a good rate. Can you clarify?

At the time there was no 150 THB fee for use of a foreign card at Thai Bank ATM's so I used several bank ATM's on a daily basis because I was trying to raise 170,000 THB which was the deposit for my condo. The rate from the US CitiBank was the lowest of the four US banks I was transferring from.

All conversions are done here in Thailand and the rate is usually set by either the Visa or Master Card clearing house here in Thailand

Prior to closing the Thai CitiBank account I would use the CitiBank ATM machine to withdraw Thai Baht from my US CitiBank account and also would receive a lower rate than I would using SCB in Thailand and E*trade as my US Bank. The final straw was when in Germany on my way back to the US I used a CitBank ATM in the lobby of a CitiBank in Frankfurt and was not only given a lower euro rate than was posted at kiosks at the airport but was also charged a fee for the use of a non German CitiBank ATM card

I don't know what you mean by EFTS but I assume electronic transfer (TT).......The Citibank Thailand is not a branch of Citibank USA

Correct, Electronic Funds Transfer System. No foreign CitiBanks are a branch of CitiBank USA, not just in Thailand, as was evidenced by the fee for a non CitiBank ATM card at the CitiBank ATM in Germany

The Condominium Act is very specific in that it requires a Foreign Exchange Certificate be issued by the Thai bank where the money was transferred to, the original of which will be attached to the Chanote, and will be part of the public record of the transaction. This will allow you to repatriate the funds without question in the future. This rule is in place to insure that the funds come from off shore and to prevent money laundering, not to "support" the Baht

Whatever way you decide to do it, just make sure that you will be given a Foreign Exchange Certificate that will be accepted by the Land Office

[fletchsmile]

There are no restrictions on money coming in for that sort of amount. What you may find is your sending bank might cap the transactions in certain ways though, eg if you use online banking there may be a daily or transaction limit set up in the system. One of my singapore banks is about SGD 20k online, but I can send more than that if not online or I go thru my RM.

Citibank in Thailand is a branch. It's not a franchise.

During the GFC the BOT did step in and have discussions with Citi Thailand around restricting transferring money back to the US. They were protecting Thai depositors interests from Citi in the US which as we all know had severe financial problems. Sometimes Thailand's protectionist policies really do work in our favour

The most common formats in Thailand for foreign banks are:

- Rep office if very small presence

- Branch - like Citi and HSBC

- Subsidiary

CIMB, Stan Chart and UOB are categorised as "Thai Commercia Banks" even though foreign owned. They are sort of a hybrid. The legal entity status is that they are Thai Commercial banks that are subsidiaries of foreign banks

I've never done what you mention - transferring in FCY to buy a condo and keeping it in FCY. It shouldn't be an issue though. Just clearly specify in the remarks section when transferring in if by SWIFT etc that it is "for the purchase of condo". Then keep the sending doc safe, and ask the receiving bank for the paperwork on the Thai end, which should also show the same remark.

Cheers

Fletch

Edited December 4, 2013 by fletchsmile

[Langsuan Man]

CitiBank in Thailand may technically be a branch but it acts like a franchisee

[fletchsmile]

I guess you have a bizarre definition of a franchise. Franchises are where one party puts up the capital to use another person's business model and brand. So the franchisor avoids significant capital investment, and the franchisee uses another's business model and brand but invests their own capital.

There is no franchisee here. Plus Citi Thailand exists because the Citi parent has invested money here, and maintained retained earnings here. The notional capital belongs to Citi Group.

The scope of Citi Thailand's activities may be narrower than the US, and the business smaller, but its still just a branch of an overseas parent. Nothing like the arrangements for say McDonalds, 7-11.

Cheers

Fletch

[Langsuan Man]

I guess you have a bizarre definition of a franchise. Franchises are where one party puts up the capital to use another person's business model and brand. So the franchisor avoids significant capital investment, and the franchisee uses another's business model and brand but invests their own capital.

There is no franchisee here. Plus Citi Thailand exists because the Citi parent has invested money here, and maintained retained earnings here. The notional capital belongs to Citi Group.

The scope of Citi Thailand's activities may be narrower than the US, and the business smaller, but its still just a branch of an overseas parent. Nothing like the arrangements for say McDonalds, 7-11.

Cheers

Fletch

Did you miss the nuance of: acts like a franchisee

[WBS2555]

I will soon be buying a condo for about 4 million baht and need to transfer that from the UK. I usually transfer it as pouind sterling and it is 'automatically' converted into Thai baht when it is deposited into my account at Citibank. I then can get a Forex transaction Form (FET) to use at land registry to prove that I imported the cash to buy the condo.

For me this is always a very nerve wracking experience but what I want to know is:

1. Transferring it from the UK means I am limited to transfers of about 20,000 USD equivalent per day, which I think is a UK banking regulation - which means I will need to make about 5 transfers over 5 days to get my 4 million baht over here - and a lot can happen to the exchange rate during that time.

2. I am looking into transferring the whole 80000 pounds to a foreign currency account at Citibank so it is all there ready whenever I need to make the conversion in one go on the day the exchange rate is favourable. However, if I do it that way DO I GET A FOREX TRANSACTION FORM?

Anyone got experience of using a FCA to buy a condo? I have asked the bank but as always I get very confusing signals, group answers and alternative scenarios. So please answers from those who have done this before. Also any recommendation for a particular bank's FCA?

You can purchase a condominium in Thailand by withdrawing the funds from a FCD account, is a non-resident account. The BOT requires the foreign investors to electronically / wire transfer funds from aboard for their investment in Thailand so that the funds can be bought out at the later states.

If the funds transferred is at or more than USD50,000 or it's equivalent, the can request the bank to provide you a "Foreign Exchange Transaction Form - FT Form". If the funds transferred is less than that the bank can provide you so called a "Credit Notes" which you will be presenting such a documents when transferring an ownership at the land department.

http://www.bangkokbank.com/BangkokBankThai/Documents/Site%20Documents/GPSD/BuyingCondo_Booklet.pdf

http://www.bangkokbank.com/BangkokBankThai/Documents/Site%20Documents/GPSD/FXTransactionForm_15032011.pdf

Sent from my iPad using Thaivisa Connect Thailand mobile app