Sunbelt Asia Weekly Column
20 April 2018
Renting out condos without a work permit
I have a property in the UK which I rent out and the rental income supplements my pension and helps finance my life in Thailand. With rental rates flat in the UK and the pound plummeting, I am considering selling my home in the UK, transferring the money to Thailand and buying a couple of condos to rent out here in Pattaya. Financially, I think this will b good decision but I wonder about the legality of it i.e. can I as a foreigner rent out condos here to other foreigners legally? What are the implications of this and is there anything I need to be aware of?
Sunbelt Asia Legal Advisors responds:
Sunbelt Asia Legal Advisors called the Bangkok Labor Office to determine if any government policy has changed recently in light of some news reports out of Phuket that juristic managers of condominiums were requiring work permits. Sunbelt Asia Legal Advisors’ source in the Bangkok government stated that there has been no policy change by the Thai government and no announcement from the government that such a change was made. According to our source in the Thai government, the owner of a condo does not need a work permit to rent out his or her condo in Bangkok at this time However, there are requirements on purchasing a condo and requirements on remitting the money into Thailand that need to be met. Additionally due diligence should be done on any condo before purchase. There are also tax implications on income from the condos. Sunbelt Asia Legal Advisors has extensive experience in assisting foreigners to purchase condos in Thailand and would be happy to consult with you on this before you start the purchase process and to discuss any tax implications.
The World Bank expects the Thai economy to grow 4.1 percent this year, reaching 4 percent for the first time since 2012, raising it from the 3.6 percent it predicted for 2018 last year. The World Bank cited rapid export growth and structural reforms as the main drivers behind the changed prediction. The Asian Development Bank predicts the GDP for 2018 to reach 4 percent this year and 4.1 percent next year due to increasing public and private investment and rising domestic consumption. Public investment should reach 900 bill baht in 2018 as the government implements major infrastructure projects including double-track railways, extending mass rapid transit lines and expanding highways with most of the big ticket projects implemented this year and next year. Last month the Bank of Thailand raised its prediction to 4.1 percent from 3.9 percent and the Fiscal Policy Office (FPO) raised its growth forecast to 4.2 percent in January, up from its earlier predicted rate of 3.8 percent.
The director of the Economic and Business Forecasting Center at the University of the Thai Chamber of Commerce reported that their latest survey of Thai consumer behavior found that 81.5 percent plan to spend more than last year during this Songkran holiday and expected spending is predicted to reach a 13 year high of over 132 billion baht, a 3.5 percent rise from last year. Domestic tourism alone will contribute to almost 4 billion baht while foreign tourism will generate as much as 76.84 billion baht, an 11% increase; mainly from Japanese, Korean and Chinese visitors. The director cited the longer holiday period which is allowing for people to travel and spend more.
Selling prices for new condos on the outskirts of Bangkok in areas serviced by BTS lines grew faster than in Bangkok in the first quarter, in part due to a drop in supply of condo supply. Selling prices for new condos grew 7.6 percent in Nonthaburi and Samut Prakan, the first time they outstripped Bangkok, which saw 6.7 percent growth in selling prices, since the Real Estate Information Center started reporting in 2012. Prices for new houses also grew faster in the provinces than in Bangkok, up 3.9 percent while new house prices in Bangkok grew 3.3 percent. The Southern Extension of the BTS Line past Bearing Station is expected to be fully opened by the end of the year.
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Please feel free to contact us if you are in Thailand on (+66) 02-662-7004 to discuss any of these listings.
Villas and land prime for resort development in Cha-am
Set in the beautiful district of Cha-Am and just a short drive from the beach, this business offers a unique opportunity for a buyer interested in getting into the resort and development business in a tropical paradise and owning 25 rai of chanote title land as well. There are 9 beautifully furnished villas, each offering two rooms for rent as resort style accommodation. The resort can cater for up to 40 people at a time. The 9 villas offer beautiful views of the mountains, lake and rice paddies nearby. With such a large area, there is plenty of room to grow this business, either with more resort rooms or more villas. The resort has a large pool set in beautifully landscaped gardens and a lovely lake.
There are 15 employees with a total monthly payroll of 260,000 baht. Sales have grown continuously in the first four years of business as the place becomes more well-known, reaching 24 million baht in 2017 with a gross profit in excess of 10 million baht.
Twenty five rai of freehold land is included in the sale, along with a 240sqm meter clubhouse, dining and drinking area with 40 covers, and 14 hardwood salas, as well as staff quarters for 4 people.
The owner is looking to sell due to personal reasons
ASKING PRICE: 100 million negotiable
BOI tech business allows for 100% foreign ownership
The BOI promoted business allows for 100 percent foreign ownership and falls within the guidelines and goals of the government’s bid to progress the economy to higher tech. This business provides cloud services to companies in Thailand and currently has 3 active partnerships and active reseller agreements: Microsoft, Sophos and Acronis, offering managed cloud services and cloud powered IT solutions. The company offers 24/7 management of cloud services and offers services such as Windows and Linux Cloud servers, Cloud back up, website and app hosting and Microsoft Azure. As the company enjoys BOI incentives, profit and dividends are not taxed so it can be beneficial to a local investor to change to local ownership.
In Thailand the spending on public cloud services in 2017 was estimated at 7.73 billion baht according to global research firm IDC. Many companies are moving to the cloud and the Bank of Thailand recently announced that the financial sector can offer financial services on the cloud. Research firm IDC predicts a further growth of the Cloud Services market by 25% yearly on average.
The company has a dedicated team of well-trained IT professionals with certified and senior engineers offering technical support and the company also has an online lead capturing and sales strategy for selling recurring packages. The company conservatively predicts total net profit over 3 years to reach 100 million baht.
The owner has more than 10 years of experience in IT, Cloud, Hosting and Online Marketing. An extensive knowledge and experience that can be transferred to a partner or new owner.
The owner is interested in two options; a joint venture in which the partner takes shares in the Thai company and the owner stays on as the General Manager or a full takeover with 100 percent ownership by the buyer.
ASKING PRICE: 50 million baht
Healthy food restaurant in popular community mall
This healthy Thai – Western fusion food restaurant offers delicious organic food in a popular Sukhumvit community mall. The restaurant has earned good reviews on Trip Advisor for its healthy menus and a loyal repeat business. With an industrial chic restaurant and in a popular community mall that hosts many weekend events and is a big draw, the rent on the 97 sqm space is 122,220 baht.
The business has 8 full-time employees with monthly wages of 140,000 baht. Sales have reached 7.2 million baht with a net profit of 700,000 baht. The owner invested 4.5 million baht in fitting up the business but is moving to another province so has set a competitive price to sell it quickly.
ASKING PRICE: 3.9 million baht
Furniture factory in Bangkok includes land
This factory makes massage tables and other furniture in Bangkok and sells their furniture to hotels, resorts, and spas overseas and in Thailand. In business since 2000 the company has built up a good reputation for quality items and a good client list.
The business has 11 full time and 3 part time staff with a total monthly payroll of 145,000 baht. Sales are around 8-10 million baht a year with a profit of around 40 percent. The business owns the land which is included in the sale. The 300 sqw property holds the factory and a building with a total of 560 sqm. The price of land and rents in Bangkok continue to so this is a great opportunity to own your own property.
The owner is retiring and so wishes to sell the business as well as the land and property.
ASKING PRICE: 35 million baht
Unique concept restaurant in top Sukhumvit location
In a great Sukhumvit location, this restaurant offers an unusual setting for diners; a true chef’s table with diners who come for the excellent food and unique atmosphere. The restaurant has earned rave reviews for its top notch menus and has been covered by several Thai foodie magazines. Diners are required to make reservations in advance for this exclusive venue.
The rent on this 60 sqm space is only 30,000 baht a month, a steal for this part of Bangkok. The business has a parking lot as well, a rarity in this town, sharing the ten-car car park with a coffee shop next door.
There are three employees with wages of 59,000 baht and month and sales reach 800,000-1,000,000 baht per month with a monthly net profit of 400,000 baht.
The owner is looking to do a bigger project and so is looking to sell.
ASKING PRICE: 1.8 million baht
Well-known events website and brand
A well-known website and brand is up for sale offering the aspiring event organizer a great entry into the networking business. The sale includes the website, as well as all social media sites, meetups, and a full mailing list and database of attendees, potential events and more. The brand is quite well known in Bangkok and around Thailand for event organization.
Also included in the sale are several event brands and logos along with partnerships with events in Singapore and around Thailand.
The owners are also providing three months of assistance for the buyer in event organizing, strategy, marketing promotion for the first three months of business.
ASKING PRICE: 5 million baht / US$ 150,000
Large Asoke area restaurant
Just off Asoke Montri Road and near Terminal 21, Health Land and many office buildings and hotels this restaurant is on the ground floor of a hotel and has a booming lunch trade and is very popular with the locals in the area as well as tourists.
The restaurant can seat 85 people comfortably and a classically decorated private ventilated cigar room or VIP room. There is 7 full time staff with excellent team work, and food and beverage contracts with the hotel in the same building or provide breakfast service and room service offering a guaranteed income every month.
There is a cool room which stores wine and beer kegs, new kitchen equipment including charcoal grill, wok stove, oven, deep fryers, cooker, refrigerators and freezers included in the sale price. Rent on the 280 sqm space runs 155,000 a month with no key money. The lease runs until 2022 with a fixed rate. All construction maintenance is supplied and paid for by the hotel above. The website, email, Instagram, Facebook page (15k followers) are all included in the sale.
Total income is around 400,000 – 500,000 baht a month but can go higher with an owner with more time to spare for the business. The owner doesn’t have time to manage the business and so is looking to sell the business.
ASKING PRICE: 3,600,000 million baht
Design studio seeks investors
A top-quality design studio is seeking investors to help grow the company. Specializing in the design of lighting, acoustics, audio-visual, IT and security systems, this design consultancy has clients in Bangkok, South East Asia and the Middle East including several large projects including a contract valued at over 40 million baht. The owner of the business is seeking either a partner to grow the company or can sell outright to the right buyer.
The business has offices in central Bangkok with a monthly rent of 100,000 baht for the 100sqm space and has a highly qualified staff of 20 full time employees with a total monthly payroll of 1.2 million baht a month. The company has been in business for six years and has earned a good reputation for high quality lighting and AV designs, as well as security systems. The company is interested in opening new markets and offering new services.
There are three options for investment for joint venture:
ASKING PRICE: 25% for 400,000 USD
49% for 800,000 USD
51% for 1,200,000 USD