THAILAND

With a population of 63 million plus, and covering a land area of 511,115 sq. km (about the same size as France) receives more than 12 million tourists per year. Foreign investments continue to increase, and in 2006 Thailand’s GDP grew by nearly six percent.

If you are planning to stay in Thailand for more than one month we suggest you to contact International Embassies and or Consulates in your Country before leaving. Usually they can allow you to stay more than one month in Thailand releasing a Non Immigrant Visa for the following purposes:

1. Proved (usually by Return air ticket) tourist purpose

2. Retirement

3. Business (or employment)

4. Thai Spouse

Then visas may be extended within Thailand for periods up to one year at a time. There are specific conditions to obtain the extension of a Non Immigrant visa.

1. You are employed (and have a work permit) in Thailand. If you own shares of a Company here and/or you work for it (as a Managing Director is the typical case) you can extend your visa without any complication.

2. You have Thai family (married with or without children).

3. You are retired and you can prove to receive a pension or other financial means to support yourself here.

• WORK PERMIT

A foreign citizen is legally able to work in Thailand if he or she has a proper passport visa and a valid work permit. Established governmental procedures exist which allow a non-Thai National or alien to obtain all of the requisite approvals for legally performing work in Thailand. Before applying the person must hold a non-immigrant B (Business) class visa. The Labor Department considers six factors, which it believes constitute an economic benefit to the country. These areas are the promotion of foreign currency importation, exportation of goods, skilled personnel, employment of local labor, new technology and tourism. This list is not conclusive, and an applicant can attempt to demonstrate that his or her employment will benefit the Kingdom in other ways.

There are 17 Thai Banks with branches throughout the country. Foreigners who wish to open a bank account in Thailand must have obtained a valid VISA for at least three months. In alternative foreigners are allowed to open a foreign currency bank account.

Juristic companies and partnerships organized under Thai law are subject to income tax on income earned from sources within Thailand. Tax is imposed on the net profits (from 15 to 30 percent), ascertained in accordance with generally accepted accounting principles and subject to conditions imposed by the Revenue Code of Thailand.

Can seem fairly restrictive as applied to foreigners, but it is really no different from other countries where special treaties are not in place. Thai law stipulates that foreigners may not own land in their own names; one has the right of ownership of buildings only. There are, however, four ways in which foreigners can legally own or acquire property in the Kingdom of Thailand:

1. Condominium:  Purchasing a condominium is the easiest, simplest transaction. A condominium title (first established under the condominium act of 1979) is a title to a part of a building or buildings with multiple owners, and a fractional interest in the land (always a Chanod) and other common assets (such as a swimming pool) and common parts of the building (such as the stair well or lobby).         The title will state the floor area of the private apartment, the ground area of the common land and the percentage interest which that apartment has in the common property. This percentage also represents the value of the voting interest in the condominium company or owners association. The law allows foreigners to hold 49% of the units in a condominium freehold while in certain condominium blocks a full 100 % of the units can be owned by foreigners on a freehold basis. One important requirement in order to qualify for freehold status is that the foreign currency funds for the purchase have been remitted from abroad and correctly recorded as such by a Thai bank. Before making any large transfer relating to a condo purchase be sure to check with the vendor, your lawyer or a local bank the correct procedure for remitting funds so that you receive the appropriate currency exchange forms or you may not qualify for foreign freehold. Buildings other than condominiums do not have any form of title document, but their sale or long lease can be registered at the Ampher (district) land office. Proof of ownership, must be established either from proof of construction, building permit or document showing previous sale-purchase (do not confuse this with the House License document, which is only a register of the houses occupants). Transfer of a building as distinct from it's land requires the posting of 30 days public notice (to see if anyone wishes to contest the ownership). Foreign nationals (aliens) may own a building (as distinct from it's land) and may register such transfer of ownership into their names at the local district office.

2. Leasehold - Freehold structure: If what you want is to buy a house, a villa or even a hotel the fact that you can't acquire freehold land should not be a deterrent. You may own the building freehold (on your name) and together with a well constructed leasehold (typically a 30 year lease with two prepaid 30 year renewals) and a purchase option for the land (that could be exercised in the event the laws of foreign ownership changed - or you sold the property on to a Thai person or legal entity) you will have effective ownership, yet still remain within the laws of Thailand. The structure of such a lease/purchase is complex and needs to be reviewed carefully with respect the properties current ownership and your own personal needs - it is recommended that you always seek the advice of an independent lawyer or property consultant, who speaks your language before making any financial commitment regarding property.

3. Company Limited: Foreigners can form a Limited Company and register the land as owned by the company. The foreigner can personally own maximum 49% of the company shares, and the remaining 51% must be in the names of Thai nationals. The foreigner is named sole executive director in the company's Articles of Association, and this effectively puts 100% control of the company and its assets in the hands of the foreign director.
   
   New law enforcement went into effect on May 25 2006 and has restricted the use of companies for property purchases. If a foreigner holds shares or is a director of a Thai company limited, the officers (at the land department) shall investigate the income, current profession and monthly salary of Thais holding shares,. The provision of necessary evidence is required.
   
   Setting up such a company takes about half an hour and your signature about 30 times.  Cost is 45,000 baht for the establishment of a company with the minimum requirements for ownership of land. Such companies need not do more than own property, and the required yearly audit costs are about 36,000 baht.

4. Thai spouse: Recent amendments that allow a Thai spouse (male or female) of a foreigner to buy land require proof that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. Divorce or separate from your Thai spouse and the land will stay with them in its entirety.

• PROPERTY TAXES

Property Tax (or Rates) do not exist per se in Thailand. So long as a property is being used for private residential purpose there is no ongoing property tax. However if the building is being used for commercial purpose, then a "Structure usage Tax" is assessed (this is calculated as 12.5% of the notional rental value of the property - this notional value is well below the commercial market rental value). If however you are referring to transfer fees, taxes and costs - these fall into 4 potential categories - transfer fees 2%, Duty stamp 0.5%, Business tax 3.3% and Income tax (the Thai equivalent to capital gains tax - a variable rate). Which of these categories will be applied depends on the details of the transaction, the vendor and the duration of ownership. It is also significant to note that most of the fees are calculated relative to the governments "tax assessment value" of the property and this value is well below market value. The precise methods of calculation are complex, but as a rule of thumb for residential sales - expect the total fees and taxes to work out to be approximately 2 to 3% of the property market value - and typically these will be split in some degree between the buyer and seller

• VALUE ADDED TAX (VAT)

VAT 7 percent on the value of goods sold and services rendered at every level, including on importation. Certain categories of goods and services (i.e. exports) are to zero percent. In addition, other categories of goods and services (i.e. agricultural products) are exempt from VAT.

• BOARD OF INVESTMENT

government offers a range of tax incentives, support services and import duty concessions to an extensive list of businesses that are regarded as priority or promoted industries. The BOI, as an investment promotion agency, remains committed to provide not only up-to-date information on various investment opportunities available throughout Thailand, but also to provide attractive incentives, services, and benefits to both existing and potential investors.

Land is measured in Rai, Ngan and Wah.

1 Rai = 4 Ngan (or 1600 Sq.m.)
1 Ngan = 100 Wah (or 400 Sq.m.)
1 Wah = 4 Sq.m.
1 Acre = 2.5 Rai (approx.)
1 Hectare = 6.25 Rai (approx.)

For more information, please contact us !!