Investing in Thailand 2013

Investing in Thailand Shayne Heffernan Ph.D www.livetradingnews.com

Q3 2012 was tough on Thai Exports, exports declined by 1.13 per cent compared to the same period last year, but there is some big news, Toyota plan to make 1m Cars per annum in Thailand.

The Auto Sector is the second most important industry for economic growth in any Country, and Thailand has excelled in that sector, long term Thailand still looks good. Auto manufacturing has an above average multiplier effect. For every one auto manufacturing job, there are 4-6 jobs outside of that segment that are related.

Automotive manufacturing has enormous reach touching every part of the country, employment in automotive and automotive parts manufacturing ranks among the top three manufacturing industries.

Despite a global slowdown Thailand will still record growth of between 4.5% and 6% depending who you ask, I think it will be closer to 6% as a result of the wage hikes and a recovery in food prices.


Thailand has Some of The World’s Best Beaches

Thailand Real Estate

Overseas buyers can purchase Thai residential or commercial property without major restrictions.

There are a number of ways to own Real Estate in Thailand in a foreigners name,

1. Around 40% of Apartments and Condominiums can be owned by foreigners.

2. We have Industrial Land available for commercial use that has an exemption and may be owned in a foreigners name.

3. You can become the Mortgage holder and lessee of land.

In general if you plan to buy land, or a villa then you will be required to setup a Thai limited liability company which will cost around $2000USD and will also have on going fees of approximately $100 per month.

Alternatively you will need to purchase through a leasehold agreement, totaling 90 years. Although a freehold title would be of distinct advantage, a leasehold title bears no specific disadvantage to the purchaser. Both forms of purchase are safe and effective means of property ownership by foreigners in Thailand. You may also lease the property and hold a 1st Mortgage on the property for extra security.

Appointing a lawyer

It is wise to appoint a lawyer like Knightsbridge Law Co Ltd who is fluent in your language so that you understand properly all the legalities and proceedings. Your lawyer will need to carry out the necessary checks on the property or land in Thailand and complete the legal requirements of the sale.

Knightsbridge Law Co Ltd will:

Check the current Thailand real estate owners have the correct title to the property

Check for any charges and liabilities still owed on the property

Check your contract and advise you on the obligations for both parties

Help you through the payment / funds transfer

Ensure that the property is registered appropriately and in your name


The initial Thailand Real Estate purchase agreement:

The initial purchase agreement will detail price, terms and conditions, settlement date etc. and in most cases a 10% deposit will be required to secure the property. This deposit is refundable should the sale not go through, as long as it is not your fault.

Thailand Offers Some Amazing Real Estate

Investment Grade Real Estate; Mergers and Acquisitions; Establishing Business in Asia; Corporate and Commercial consultancy; Asset Management; Banking, Finance and Securities; Listing Companies in Asia; Global Metals and Mining

Reservation fees

When buying a new condominium, an initial reservation deposit of about $1,250 is required and this amount is deducted at a later stage from the total price. Once an agreement is signed, usually 10 to 15 days after the reservation, the buyer is required to pay 10% of the total price. Depending


on the terms of the contract, the balance then could be due in installments or as a lump sum at the time the title is transferred.

Thailand Real Estate Fees

As a general rule, for residential sales you can expect the total fees and taxes to work out to be approximately 2 to 3% of the property market value.

There is a stamp fee of 0.5% , a transfer fee of 2% , a business tax of 3.3 % (levied against an vendor who has been in registered possession of the property less than 5 years), and income tax (similar to capital gains tax) at a variable rate.

Thailand Property Taxes

There are 2 different types of tax levied on property in Thailand:

Thailand Land Tax

This is an annual tax levied on land ownership. The amount is often so small that in practice the body charged to collect it rarely bothers to do so. When they do collect it, it is usually after several years when the amount has accumulated.

Thailand Structures Tax

This only applies to commercially used properties. The rate is 12.5% on the actual or assessed gross rental value of the property. However, this notional value is well below the commercial market rental value.

If the property is purchased through a company, you need to consider that corporate tax is higher than personal tax, and the cost of setting up the company must be considered as part of the initial investment.

Thailand Capital Gains Tax

There is no capital gains tax in Thailand and income tax (usually between 1.0 – 3.0%) on property is the comparable replacement.

Financing Thailand Real Estate

Mortgages in Thailand are still difficult to arrange. However, recently a new branch of the Bangkok Bank has opened in Singapore, which has opened up borrowing possibilities for property investment in Thailand, financing as much as 70% over 10 years for property purchase. You should expect to get no more than 50% in finance, with the exception to some well-known developments where finance of nearer 70% is available.


HCM has a presence in Thailand and can offer loans of between 3,000,000 and 350,000,000 Thai Baht. Typically they will lend up to 60% of the purchase price and interest rates can be fixed for up to three years.

To buy a condo or another property with a loan, many purchasers get a mortgage in their home country and then transfer the money to a Thai bank account, while using a lawyer to oversee the logistics of the process.

For Assistance Buying Thai Real Estate Contact

Heffernan Capital Management [email protected]

Singapore

3 Raffles Place #07-01 Bharat Building Singapore 048617 Tel: +65 6329 6408 Fax: +65 6329 9699 Email : [email protected]

Thailand has a strong Real Estate market if you are picking the right area’s and projects, buying can be complicated as Thai law has some very specific and unique rules,

First Mortgage Investments

The most secured and durable investment is real estate property. History has proven that although real estate prices may have fluctuated from time to time, over the long-term real estate property has appreciated in value. The security for a mortgage is real estate property.

Private mortgages provide a regular income stream, tangible security and a real return to the investor that is superior to bank deposit, GICs and bonds.

There are many reasons why these investments are so highly sought after, which include the following:

1.Low Administration Costs: Each of us who have had a mortgage know how long it takes to pay this debt off. The Banks know this as well. The borrower is required to pay the costs to have the mortgage registered against title to their property. The Bank simply sits back and goes about cashing the monthly payment for years without incurring any further cost whatsoever.

2.Cash-Flow: A mortgage generates cash each and every month. Obviously the amount of the monthly payment will depend on the size of the mortgage, the interest rate and amortization period. However the payment comes in each month if the borrower does not want to loose their home. The fact is that the mortgage payment will be the last payment not made by someone in


financial difficulty, and if bankruptcy occurs, a mortgage holder’s security is not affected by the borrower declaring bankruptcy.

Interested in Investing in Asian Real Estate Contact

Linda Johnson, Business Development Director – Private Client Group, Heffernan Capital Management [email protected]

Singapore

3 Raffles Place #07-01 Bharat Building Singapore 048617 Tel: +65 6329 6408 Fax: +65 6329 9699

3.Protected Capital: Perhaps the main reason why Banks love mortgages, and why they fight tooth and nail with each other for this business, is the low risk associated with these investments. Obviously the risk associated with a first mortgage is less than the risk associated with a second mortgage, but then again the return from holding a second mortgage is substantially greater.

For the first several years the mortgage is outstanding, almost all of the payment is applied to interest. The capital is protected by the value of the real estate against which the mortgage is registered, and the value of the mortgage is not affected by the ups and downs of the stock market.

Our RRSP mortgage gives a minimum of 10% Yield Rate of Return Secured by a First Mortgage on a Real Property in Asia.

At a rate of 10% yield rate of return, your RRSP portfolio should double in value every 7 years according to the rule of 72.

Private mortgages can be a great investment, since there is great security with the equity on real property. Even if a debtor reneges, the property can be used to help pay off the mortgage.

It is also an easy investment to make – private mortgages require little baby-sitting or watching of an investment. Money is paid regularly and the lender is fully covered by the legal documents signed at the time of the mortgage, ensuring that the investment as well as a profit is collected.

Since private mortgages are so good for investors, many think that they do not offer a great deal for property owners, but this is not always the case. Property owners turn to private mortgages for many reasons. Not all private mortgages are high interest – some do offer good rates. In some cases, property owners turn to private mortgages if they simply are a very poor credit risk and cannot get financing elsewhere – and then switch to a non-private mortgage with better rates as


one’s financial status improves. Finally, there are usually no greater risks with private mortgages than with other types – the same legal documents are used to protect the lender.

Bangkok is One of Asia’s Leading Business Cities

Investing in Thailand

In East Asia and the Pacific, Thailand is ranked the third easy place to do business, behind Singapore and Hong Kong.

The World Bank’s “Doing Business 2012″ report put Singapore at the top as the country where it is easiest to do business and as having the most conducive regulatory environment for the starting and operation of a local firm.

Incorporate your company in Thailand, Click here to find out more!

In 10 areas of business regulation, Thailand’s ranking stays high mainly because of the ease in getting electricity (9), but its ranking is the lowest (78) in the area of starting a business.


Getting electricity is a new index added this year.

“Throughout the past eight years, Thailand’s ranking was 20th. The higher ranking demonstrates Thailand’s continued efforts in improving the regulatory environment to ease business doing,” said Annette Dixon, World Bank country director.

World Bank country economist Kirida Bhaopichitr added that a one-stop service centre, established recently to facilitate access to licences, contributed greatly to the improvement.

A key finding of the report is that in the East Asia-Pacific region, China has shown the biggest improvement in six years.

Interested in Investing in Thailand?


Singapore

3 Raffles Place #07-01 Bharat Building Singapore 048617 Tel: +65 6329 6408 Fax: +65 6329 9699

It also shows that access to licensing data facilitates businesses. Two-thirds of the countries in the region have improved their dissemination of public information, thanks to improvements in information technology. Globally, Morocco improved its business regulation the most, climbing 21 places to 94, by simplifying the construction-permit process, easing the administrative burden of tax compliance, and providing greater protection to minority shareholders. Since 2005, Morocco has implemented 15 business regulatory reforms.

While Thailand is likely to see a mild economic downturn over the next six months, the general outlook remains strong long term.

Ford, GM, Toyota and many other International manufacturers have made Thailand there main production base in Asia.


Thailand is logistically well place to manage Asian operations and has favorable investment laws.

The reports that Thai economy would encounter such risk factors as a drop in private consumption and investment, as well as a slowdown in exports and tourism-related businesses are a little excessive, any slow down will be mild will still see Thailand growing.

Most of the of 30 established analytical and economic research units across Thailand foresaw at a recent survey, conducted by Bangkok University’s Research Centre, according to Thai News Agency on Monday.

63 leading economists economists in a recent survey, conducted by Bangkok University’s Research Centre said the Thai economy is then likely to be spurred by improved internal factors, including private consumption and investment, as well as the government’s increased spending and investment, in the wake of the six-month downturn, although external risk factors related to prospect of Thai exports and tourism are envisaged to prevail.

Shayne Heffernan’s definitive Guide to Investing and Doing Business in Thailand, Click Here

Knightsbridge Law

Knightsbridge Law was established by a consortium of Foreign and Local interests to service the needs of the business community of Bangkok, with the wealth of International connections the consortium brings Knightsbridge Law is set to be one of Bangkok’s leading Law firms, with lawyers, accountants, securities and finance specialists it offers unparalleled services in litigation & dispute resolution, banking & finance, insolvency & restructuring, corporate & commercial, and Visa Issues.

The firm includes both Thai and foreign through the full equity arrangement established between members of the consortium. The relationship is harmonious between the Thai and foreign partners and is genuinely seamless. Many of the foreign staff are in Bangkok on a long-term basis and are expert in interpreting Thai legal issues for foreign clients. In-depth local knowledge can be packaged and delivered to foreign clients to an international standard of clarity and accuracy.

Property Intellectual Property Taxation Corporate & Commercial Insolvency & Restructuring Banking, Finance & Securities Ligitation & Dispute Resolution

Our Mission


The firm prides itself on providing workable and cost effective solutions which take full account of Thai and International law and practice, as well as its ability to communicate to both Thai and Foreign clients. Our ability to create functional solutions that provide our clients with a workable local and international user friendly structures.

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com

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For More Information Contact


Singapore

3 Raffles Place #07-01 Bharat Building Singapore 048617 Tel: +65 6329 6408 Fax: +65 6329 9699 Email : [email protected]

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Investing in Thailand 2013