How to Legally Transfer Money from India to Buy Property in Thailand

How to Legally Transfer Money from India to Buy Property in Thailand

How to Legally Transfer Money from India to Buy Property in Thailand

Investing in property in Thailand is increasingly popular among Indian buyers. However, transferring money abroad must follow RBI and FEMA guidelines to ensure legality and compliance. Here’s a step-by-step guide to make the process smooth and secure. Watch my video here: How to transfer money from India to Thailand

1. RBI Guidelines & LRS Limit

Indian residents can send money abroad under the Liberalized Remittance Scheme (LRS). Each individual can remit up to USD 250,000 per financial year for purposes like education, travel, investments, or property purchases. If the property cost exceeds this limit, multiple family members can each remit up to USD 250,000 to collectively fund the purchase.

2. Purpose Declaration

Every remittance requires a purpose declaration to the bank via Form A2, stating why funds are being sent. For property purchases, the purpose should be marked as “purchase of property abroad.” Banks may ask for supporting documents such as a proforma invoice, sale agreement, or intent letter from the Thai seller. Providing false information can attract penalties.

3. Choosing the Right Bank or Transfer Channel

Always use authorized Indian banks or licensed money transfer services. Transfers occur via the SWIFT system, which is secure and globally recognized. Avoid unofficial routes like hawala, as they are illegal and risky. Legitimate channels ensure traceable, compliant, and secure transfers.

4. Currency Exchange Rates & Transfer Fees

International transfers involve exchange rates, transaction fees, SWIFT charges, and GST. Rates vary across banks and forex platforms, so comparing options can save a significant amount, especially for large sums.

5. Property Ownership Rules in Thailand

Foreigners cannot directly own land in Thailand but can own condominiums if foreign ownership in the building does not exceed 49% of total units. For landed property, options include:

• Leasehold agreements, usually for 30 years

• Setting up a Thai Limited Company (complex and requires legal advice)

Always consult a Thai property expert or lawyer for guidance.

6. Thai Legal & Tax Compliance

Before finalizing a property purchase, hire a local Thai lawyer for:

• Due diligence on the property title

• Drafting contracts

• Ensuring regulatory compliance

Be aware of applicable taxes:

• Transfer fee: ~2% of property value

• Withholding tax: On resale in some cases

• Stamp duty or specific business tax: Depending on property type

7. Required Documents for Money Transfer

Prepare these documents to speed up your remittance:

• Passport copy

• PAN card

• Purpose Declaration (Form A2)

• Property sale agreement or proforma invoice

• KYC documents as per bank requirements

8. Reporting to Indian Authorities

Indian residents must report foreign property in their Income Tax returns under Schedule FA. This is mandatory even if the property does not generate income.

9. Repatriation Rules

If you sell the property in Thailand in the future, repatriation of funds to India must follow RBI and FEMA guidelines. Keep all sale documentation, pay applicable taxes, and transfer proceeds via official banking channels.

10. Bonus Tip: Consult Experts

For a smooth process, consult:

• Forex experts for best exchange rates

• Property consultants familiar with Thai laws

• Legal advisors for compliance in both India and Thailand

Watch my video here: How to transfer money from India to Thailand

Related Links:

1. Reserve Bank of India https://www.rbi.org.in/
2. FEMA Guidelines for Money Transfer: https://www.rbi.org.in/Scripts/FAQView.aspx
3. Thailand Board of Investment: https://www.boi.go.th/
4. Thailand ministry of Finance: https://www.rd.go.th/ 
5. Swift Money Transfer: https://www.swift.com/