Getting the Deal Through has published a multi-jurisdictional guide to real estate in 30 jurisdictions worldwide. The Thailand chapter was written by Cynthia Pornavalai and Ahmet Yesilkaya from the Tilleke & Gibbins corporate and commercial team. The chapter provides a business perspective to owning and investing in real estate in Thailand, and clarifies the law for foreign investors in terms of their liability, choice of law, and what to consider when making investments in Thailand. More specifically, the chapter covers the following:
- An overview of Thailand’s legal system, relevant to an investor, looking specifically at enforcement of certain contracts, the doctrine of strict compliance, and evidence requirements.
- The legal requirements for documents recording conveyance, including fees, stamp duty, withholding tax calculations, and registration locations.
- The factors that a foreign investor should take into account when considering a real estate investment in Thailand, the legal requirements before they can invest, and exceptions to these requirements that enable certain investments.
- Any potential exchange control issues that may occur if a non-resident invests in property in Thailand, and the procedures for bringing foreign currency into the country.
- Legal liabilities that an owner of real estate may face, with particular attention to strict liability, tort liability, and liability to subsequent owners. Protecting oneself against liability with insurance is also detailed.
- The jurisdiction of courts over real estate disputes, which parties can be joined to a claim, requirements for out-of-jurisdiction service, and how courts deal with conflict of law and choice of law in real estate disputes.
- A general summary of investment entities in Thailand, which ones (if any) are available to foreign investors, and what the organizational formalities are to create them (such as private companies).
- The contract of sale and its typical provisions, including the typical down payment percentage and general warranties and representations usually given by the seller.
- A focus on leases and mortgages, the legal consequences and order of priority, and what types of agreements they cover.
- Due diligence and the method of title searches, statutory priority to recorded instruments, protecting oneself against bad title, and the necessity and process of structural and environmental reviews.
- Creating and perfecting liens, looking at lien document forms, and issues to note for lenders from foreign jurisdictions. The financing part of the chapter also covers forms of security, loan interest rates, defaulting and enforcement, protection of collateral, recourse, cash management system requirements, financial covenants, credit enhancements in different types of transactions, from construction defects to smaller transactions with deposits and installments, and the bankruptcy system in Thailand.
Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through – Real Estate 2013 (published in November 2012; contributing editor: Sheri P Chromow of Katten Muchin Rosenman LLP). For further information, please visit www.GettingTheDealThrough.com.