Q: Can a foreigner own property in Thailand?
A: Under the current laws of Thailand, foreign ownership of land is highly restricted in the Kingdom of Thailand. There are some exceptions to this law, which deal with condominiums and Board of Investment(BOI) promotions to allow corporate housing in designated areas. Ownership of land is reserved for the Thai natural and juristic persons (legal entities or companies). Officially, companies that have more than 49% of their shares held by aliens or in which aliens comprise more than 49% of shares holders are prohibited from owning land. A foreigner is, however, allowed to own a building distinct from the land, which coupled together with a renewable registered 30 year lease is regarded by many as being as good as owning the freehold.
Q: If I purchase a bar or restaurant, but do not work in that business do I need a work permit?
A: Thai law stipulates that as a foreigner, if you are working and do not receive an income you still need a work permit. Even if you purchase a business and do not physically work, but you receive an income from that business, you need a work permit.
Q: I would like to move to Phuket and set up as business there, what should I do?
A: There are so many possibilities and opportunities in Phuket. We can put you in touch with professionals who can help you or if you would just like to talk and get a feel, please contact us and we would be happy to answer your enquiries.
Q: Can a Non-Residents open a bank account in Thailand?
A: Subject to the conditions prescribed by the Bank of Thailand, non-residents are generally
allowed to open and maintain both Thai Baht and foreign currency accounts with authorized
agents (i.e. authorized banks and an authorized company) in Thailand. Presently, 13 Thai
commercial banks and 18 foreign bank branches and one company (Asia Credit Public Company
Limited) are registered and authorized by the Bank of Thailand.
Q: We intend to sell our house in Phuket which is owned by our offshore company and want to know what taxes and fees will have to be paid in Thailand – special business tax, capital gains tax, company income tax, transfer fees at the land office and so on – and when they will have to be paid?
A: “The two main payments to be made are the transfer fee (2% of the estimated value of the land and/or house) and company income tax (maximum 2.5% of the estimated value of the land and/or house).
There are some other small fees such as goverment stamps a so on. Payment is due when the sale is finalized – in other words, when change of ownership or names takes place. ”
from the Phuket Gazette paper, Friday, August 19, 2005
Pongtap Fongsee, Assistant Officer of the Phuket Provincial Land Office.
Q: I would like to bring my 20-foot motorboat to Thailand. If I ship it in a container to Songkhla, would I then be able to go there myself and pay the VAT, then drive the boat to Phuket (on a trailer)? Does the zero tax rule apply to both the boat and the engine?
A: “You can pay the VAT yourself, or you can appoint a representative to do it for you at Songkhla, because the vessel is considered a legal import.
Other taxes – such as import duty, excise tax and Ministry of Interior tax – will be levied at zero, on both the boat and the engine.
Note that the zero tax applies to the engine only if it is part of the boat and not separate from it. ”
from the Phuket Gazette paper, Friday, February 11, 2005
Theera Paeprasathithavorn, Deputy Chief, Phuket Customs Office.
Q: If I buy a condo or an apartment to use as vacation accommodation for myself, can I rent it out to other people taking a holiday when I am not there?
Would the rent I derive from letting the apartment be regarded as “earnings” and, if so, would I need some sort of visa that would allow me to “earn” money in Thailand?
Finally, could I open a bank account for the agent to pay the rent into?
A: “Yes, you could legally rent out your condominium unit. It’s up to each individual bank whether or not it allows you to open an account to receive rent payments.
Your agent would have to deduct withholding tax from the rent before paying it into your account. However, you would not need to hold a visa in order to pay tax.
For information on personal income tax on earnings in Thailand, you should talk to a tax consultant. ”
Pratuan Thanarak, LLB, of the International Law Office, Patong.
A: “In accordance with Bank of Thailand policy, we allow only foreigners with work permits to open accounts. ”
Spokesmen for Krung Thai and Siam Commercial Banks, in Phuket City.
A: “We allow foreigners to open accounts here. They should bring along their passports as identification. ”
A customer relations officer at Bangkok Bank.
A: “Personal Income Tax (PIT) is a direct tax levied on income of a person.
A person means an individual, an ordinary partnership, a non-juristic body of person, a deceased person and an undivided estate. In general, a person liable to PIT has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis.
Taxpayers are classified into “resident” and “non-resident”. “Resident” [for tax purposes] means any person residing in Thailand for a period or periods aggregating more than 180 days in any tax year.
A resident of Thailand is liable to pay tax on income from sources in Thailand on a cash basis, regardless of where the money is paid, as well as on the portion of income from foreign sources that is brought into Thailand.
A non-resident is, however, subject to tax only on income from sources in Thailand.
[Assessable income includes] income from letting-out of property on hire, and from breaches of instalment sales or hire-purchase contracts. ”
from the Phuket Gazette paper, Saturday, June 18, 2005
Thai Revenue Department website (www. rd.go.th).
Q: I plan to invest heavily in property in Phuket, but I am unclear about the tax that I will have to pay if and when I sell in the future.
I understand that I have to record all the money I remit to Thailand in order to buy property, though I cannot remember the name of the form I need. Also, if I make a capital gain on my property, how much capital gains tax will I pay and are there any rules about the amount of money that may be transferred out of Thailand?
A: “Thailand does not have a Capital Gains Tax (CGT) as such. Income produced by the sale of real property is taxed as ordinary income either to the private person or to the corporation receiving the income.
When a company sells real property (land and structure), it pays a specific business tax of 3.3% of the appraised or registered price, whichever is higher, withholding corporate tax of 1% of the appraised or registered price, whichever is higher, and other costs.
At the end of the fiscal year, the company must file its annual audit and balance sheets.
Net profits to the company are taxed at 30% (however there are, at present, some tax breaks available for smaller companies). After paying its taxes and setting aside a reserve, the company may pay dividends to its shareholders.
These dividends are subject to income tax if paid to an individual.
Thailand’s taxes are graduated, and can range from 0% up to 37% depending on the annual income of the tax payer. Non-residents (for tax purposes, not in immigration terms) are subject to a withholding tax of 15% on ordinary income and 10% on dividend payment income, for which the foreign tax payer may file a tax return.
The tax obligation may also be affected by whether a Double Tax Treaty exists between the tax-paying foreigner’s country of residence and the Kingdom.
There are legal ways, through proper tax planning with a qualified Tax Attorney or CPA, to reduce your exposure to tax liabilities. Since you are preparing to invest “heavily” here in Thailand, we would suggest you consult with a reputable law firm and/or a CPA to discuss the best way to structure your investment. ”
from the Phuket Gazette paper, Wednesday, June 1, 2005
Matthew V. McEvily, of McEvily & Collins Law Offices.
Q: My wife and I have non-resident retiree O-A multiple-entry visas. We entered Thailand in June and are looking to build or buy property for our retirement. Our moving company told us that our used furniture and personal effects, which are being stored in a shipping container, should enter Thailand within six months of our arrival to avoid customs duty.
We are concerned because we have not yet found a suitable property and will be leaving Thailand for about a month in October.
A: “The period of six months starts from the date that you initially entered Thailand on the retirement O-A visa, regardless whether you leave and re-enter Thailand after that date.
Does the six-month period begin from when we intially entered Thailand? If a person leaves the country, can it begin when that person returns?
However, the deadline is somewhat flexible. If your personal items are due to arrive in Thailand more than six months after the entry date, you should inform Customs about this at least two months before the six-month deadline.
If, after entering Thailand, you have been granted a permit to stay for a year or more, your belongings will not be taxed. However, if your permit to stay is for less than one year, these items will be taxed 20% import duty plus 7% value-added tax.
If your belongings arrive while you are away, you can have them stored at the deep sea port, where I presume they will arrive. If you leave your items at the port longer than two months, you should inform Customs so we know that you will collect them later. ”
from the Phuket Gazette paper, Tuesday, September 9, 2003
Pichai Duaengdangchoti, Customs Chief Inspector 6, Chief Customs Officer Formality & Legality Division, Phuket Customs Office.
Q: We would like to move to Phuket but don’t know where our kids should go to school?
A: There are several good international boarding and day schools on the island. All of them offer international standard curriculum.
Q: What are the medical standards and services on offer in Phuket?
A: There are several world class international standard hospital on the island. They are very well equipped and can be compared with those in Europe and the USA.
Q: Can I get a loan from Thai banks?
A: Bangkok bank has recently open its door and offer mortgages to foreigners wishing to purchase properties in Thailand. The loans is being offer only through its Singapore and Hong Kong branches. (read more in News) Please contact us for further assistance.