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Posts Tagged ‘Thai Mortgage’

6th December 2009

Living in Thailand is a dream of many, but the logistical difficulty of remaining in the Kingdom long term can be confusing to some. For those living or residing long term in Thailand there are some obstacles which must be overcome in order for a foreign national to unilaterally deal with personal business issues in the Kingdom. Most important for those staying in Thailand is Immigration status. One must remain in lawful status while in the Kingdom. This can be difficult for those who initially entered the Kingdom on a Thailand visa exemption. A Thai visa exemption only allows lawful status for a period of 30 days and it is very difficult to have this document converted into a proper visa. After conversion it may be even more difficult to have the newly acquired visa extended. Therefore, having a proper long term visa on arrival may be the best course of action for the new expatriate.

Bank Accounts are another major issue for those living in Thailand. Thai bank accounts can be difficult to open for those who do not have a valid Thai visa and work permit. Many Thai banks have different rules on this issue, but at the time of this writing, the prevailing rule seems to be that one needs a Thai work permit and visa in order to open a bank account. There are some who have noted that one may have less difficulty opening a Thai bank account if one has already obtained a Thai business visa and remains in lawful status on said visa. In certain situations, it may be possible for a foreign national to open a Thai bank account without a Thai work permit, but one should consult an attorney in Thailand regarding bank account setups without a work permit.

Mortgages are also an issue for foreign nationals wishing to remain for an extended duration in the Kingdom of Thailand. Thai banks are very reluctant to loan money to non-Thais. Therefore, a foreign national may find that it is very difficult to receive financing for an abode in Thailand. An ancillary issue is that of house registration, many foreigners find it is very difficult to obtain a foreign Tambien Baan (House Registration Booklet, also spelled Tabien Baan) from the local Amphur Office (Civil Registrar’s office). In the case of Thai mortgages, the foreigner’s financial situation will likely be the determining factor in actually obtaining a mortgage. As to the House Registration, success in this endeavor may hinge upon retaining a Thai lawyer.

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2nd October 2009

In Thailand, a major concern for expatriates, tourists, and permanent residents is banking. Many people need to set up Thai bank accounts in order to transact personal business in the Kingdom or for international financial purposes. Unfortunately, like many things in Thailand, setting up a Thai bank account can be somewhat difficult, especially for a new arrival trying to establish themselves. In Thailand, each financial institution has its own unique set of rules and regulations imposed upon those who wish to set up an account. Compounding this byzantine situation is the fact that rules and requirements depend upon the type of account one wishes to set up. Business accounts, Foreign Currency accounts, personal savings accounts, and checking accounts all have differing documentation requirements.

For those entering the Kingdom on a Thai visa exemption, opening a bank account in Thailand may prove difficult as many banks are now requiring that an applicant have at least a long term non-immigrant Thailand visa. Some banks take their due diligence efforts one step further and require that a prospective account holder provide a Thai work permit. The practice of requiring a Thai work permit seems to have become a common requirement for nearly all Thai banks in recent months.

There are others who wish to set up Thai corporate bank accounts in the Kingdom, these people are often either the Managing Director of a Thai company or they are thinking of setting up a Thai company. In either case, a great deal of documentation must be submitted in order to obtain a Thai bank account for a Thai corporation. Even where a corporate account can be established, a personal savings account may be necessary if one wishes to have a debit card. As a general rule in Thailand, banks will not issue debit cards for corporate checking accounts. Credit Cards are also notoriously difficult to obtain for corporations as well as individuals who are not Thai Citizens. It is possible to obtain a Thai Credit card, but in many cases the requirements are extremely stringent.

An issue ancillary to Thai banking is Thai mortgages. Obtaining a Thai mortgage can be very difficult for a foreigner. For those wishing to buy a Thai condo it must be remembered that funds for purchase must be brought into the Kingdom from abroad. How this requirement interacts with issues surrounding the Thai mortgage likely is dependent upon the unique facts of the situation.

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17th August 2009

Thailand Real Estate law is a complex area of jurisprudence. Many people, particularly foreigners, have misconceptions regarding what type of property rights can be accrued by non-Thais living in Thailand. First there is the mistaken belief that foreigners cannot own land. In reality, there is merely a de facto prohibition regarding foreign land ownership. A foreigner can own land in Thailand, but he or she must obtain approval from the Thai Minister of the Interior which can be a difficult proposition.

Another slightly incorrect idea circulating in the Thailand expat community is that one cannot obtain a lifetime right of use in any type of Thai real estate. However, it may be possible to acquire a usufruct which would give the person holding the usufruct the right to use the land or the structures thereon for their lifetime.

A 30 year Thai lease can also be acquired for Thai property, but it must be properly registered with the local land office. Another common misconception is the idea that one can have a 3 year “automatically renewing” lease in Thailand. This mistake would seem to stem from the fact that an unregistered Thai lease is enforceable for up to 3 years, but one needs to continually get a new lease from the land owner in order for the lease to rollover.

Recording a Thai mortgage is one method often employed by foreigners resident in Thailand who finance the purchase of property in a spouse or loved one’s name. If the foreign national ever wishes to retrieve their interest in the equity of the property, then all they need to do is foreclose on the property in order to re-acquire their funds.

There are some issues when it comes to recording these types of property interests where a third party has encumbered the Thai property by recording a mortgage at the land office. Thai banks often provide mortgages on Thai property and in order to obtain some sort of property interest in the encumered real estate one must first obtain permission from the bank. Therefore if one wishes to obtain a 30 year lease or a lifetime usufruct on the encumbered real estate owned by another, then it may be wise to contact the bank which holds the mortgage and inquire as to their position on recording leases on property they have an interest in. Sometimes, retaining the services of a competent Thailand property lawyer can be beneficial in such matters particularly as an experienced Thai real estate attorney can predict the likelihood of bank acquiesence.

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25th July 2009

Many Expatriates resident in the Kingdom of Thailand eventually come to the point where they wish to purchase property. In many cases, particularly in Bangkok, a Thai Condo will suit their needs perfectly. However, there are many people who do not wish to live in a Thai Condominium. These people often opt to purchase some form of Thai Real Estate.

One of the major problems that comes with purchasing Real Estate in Thailand is the de facto prohibition on foreign ownership of land in Thailand. Some people decide to use a Thai company to own land. This is possible although one needs to carefully construct the corporation so as not to violate the relevant laws regarding Thai “nominee shareholders.” Other less advisable methods are employed by foreigners to enjoy the benefits of property in Thailand. In some cases, a Thai spouse will put her name on the “Chanote” (Title Deed) while the foreign spouse actually pays for the property. This can be very disadvantageous because in transactions such as this the Thai Land Department will often require that the foreign spouse sign an affidavit explaining that the Thai property in question was not purchased with money provided by the foreign spouse and as a result the foreign spouse shall have no claim to the Thai property.

These type of disadvantageous scenarios create a situation where the foreigner’s interests must be protected while also remaining legal pursuant to the provisions of the Thai Civil and Commercial Code. In cases such as this, some foreign nationals opt to record a Thai lease. This instrument would provide property enjoyment rights for a maximum of 30 years. Another method that could be employed by a foreigner is the recording of a Thai Mortgage. This method would have the benefit of securing the foreigner’s monetary interest in the property. However, in many cases, the foreigner simply wants to have his interests in his home protected.  If this is the case then it may be best to bifurcate (split) the Title of the Real Estate.

Under Thailand Property Law there are ways of splitting the Thai Title Deed of a residential property. Basically, the foreign national could be designated as the Title holder of the physical residence (house) while the Title to the land remains in the name of a Thai national. By bifurcating the Title in such a way, the foreigner’s interests are better protected. That being said, it would probably be wise to contact a Thailand property lawyer to assist with creating the proper legal instruments as bifurcating Thai Title can be quite complicated and requires dealing with the Land Department of Thailand.

For more information please see property lawyer thailand or bangkok lawyer

(Please be aware: this piece is not legal advice. No lawyer-client relationship is formed by reading this blog post.)

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