Articles by Bruce Bickerstaff that appeared in MelbThai magazine (up to the end of 2012)
Due to server constraints, the team at MelbThai routinely remove older editions of their magazine from their web site. Further, and as of late 2013, new articles are added to the MelbThai Facebook page at https://www.facebook.com/MelbMagazine instead of their web site. As there is interest from some readers to access my older articles I am progressively collecting and saving them on this and other pages within my own web site.
Most of those considering relocation to Thailand spend some time online reading about the experiences of others who have already been there and done that. This can be rather disconcerting as expat forums tend to be awash with tales of woe involving cultural misunderstanding, financial loss, and scams. Remember though that people are far more likely to spend time recounting negative experiences than positive ones, so the balance will always be skewed towards the former.
On the other hand, there remains abundant opportunity for unwary expats to get themselves enmeshed in financial, legal or romantic difficulties of sometimes epic proportions. When the relevant decisions are not made in a sufficiently thoughtful and disciplined manner, then daydreams and wishful thinking win out over due diligence every time.
In this way major expenditure is often not viewed as an ‘investment’, and is often excluded from anything but the most cursory scrutiny. The house they are buying is not an ‘investment’, it’s about lifestyle. The gold is not an investment, it’s a gift. The business they establish is not an investment, it’s just to give the Mrs something to do. The shares they buy are not an investment, they’re just a hobby. Well folks, regardless of whether profit is your main motive, these are all investments. Should they be bad investments then they are going to cause financial pain, and perhaps curtail current lifestyle or even future life choices.
Every significant financial outlay in Thailand demands at least the same degree of thoughtful consideration that you would give to an investment in your home country. Take on board as much advice as you can and learn from the mistakes and successes of others. Investing this time here and now might well ward off troubling losses and stress further down the track. Plan not to join the legion of sad souls posting their personal tragedies online in the years ahead.
December 2010 and January 2011: Articles did not appear in either the December 2010 or January 2011 editions
February 2011: Thai Economy in remarkably good shape
There remains a fairly common misperception that the political unrest since Thaksin fled the country, combined with the GFC, has left Thailand’s economy in tatters. I recently attended a seminar convened to discuss two important reports released by the World Bank in November 2010. The findings of those reports were both surprising and encouraging:
- The Thai economy experienced a V-shaped contraction and recovery in 2009, driven primarily by the manufacturing sector. There was a further downturn this year, but certainly not as bad as was anticipated
- Import demand from trading partners, especially China, rebounded and is expected to remain firm in the medium term, providing a basis for continued growth in the Thai economy
- Although GDP contracted sharply in Q2 2010 due to the rioting, a year-on-year growth rate of 6.1% was achieved
- The political turmoil took a heavy toll on tourism, but arrivals started to rebound in June
- There has been an enormous surge of foreign capital into the Thai economy
- The financial position of Thai banks has continued to strengthen
- Higher farm incomes, low interest rates and improving consumer confidence has spurred domestic demand
- Inflation has remained close to the lower limits of the bank of Thailand’s inflation target, although food prices are trending upwards
- Actual government revenue for financial year 2010 was greater than was budgeted, whilst expenditure was substantially less. This led to a deficit of only THB 186 billion compared to a forecast deficit of THB 714 billion
The main task for the Thai government now is managing capital inflows, and ensuring that inflation remains under control. Further challenges include boosting agricultural productivity, encouraging greater expenditure on research and development, skills development, and addressing the problems posed by an aging society, growing urbanization, and pronounced income disparity.
The ‘Thailand Economic Monitor’, and the ‘East Asia and Pacific Economic Update’, can both be downloaded free of charge from the World Bank web site (www.worldbank.or.th)
March 2011: Step carefully with Thai real estate
Most visitors to Thailand have a wonderful time. Some don't, and the reason can sometimes be traced back to a failure to do their homework before putting money on the table. This can apply to anything from buying gems, to booking hotels or tours, to even very major outlays such as buying real estate. In the case of the latter, I am shocked by the number of foreigners who make little serious attempt to investigate the property or related legal issues until after they have already signed contracts and/or paid a deposit. Buying real estate in Thailand is somewhat tricky, but for those who seek it, there is information available to guide your decisions. Even if you intend to use a solicitor (which is often a wise choice), you still need to ramp up your general knowledge to the point where you know what questions to ask and what things to look out for. Some of the topics you need to learn about are:
- The different types of land title in Thailand and the restrictions on sale, leasing or development that apply to each
- The laws that apply to the ownership, by non-Thai nationals, of apartments, of land, and of structures built upon the land
- The processes and steps that need to be followed to purchase property, or to enter into agreements to control or use property
- The nature of problems commonly experienced by other foreigners who have bought or leased real estate in Thailand, including the degree of difficulty to later sell real estate
Be aware that there is a lot of misinformation in circulation so ensure that you seek out unbiased and reliable sources, rather than relying on hearsay or the web sites of property developers for example.
April 2011: Thai banks improve service to foreign customers
When you really need advice or assistance, nothing is more frustrating than getting conflicting answers to the same question. Unfortunately this is an all-too-common experience in Thailand for both tourists and expats alike. And one situation where many people encounter this problem is when they call or visit a bank. There are eighteen Thai banks, as well as number of foreign banks registered in Thailand. Most banking business is handled by the six largest banks, which are in order of size:
Bangkok Bank (http://www.bangkokbank.co.th/Bangkok+Bank/main.htm)
Krung Thai Bank (http://www.ktb.co.th/PublicApp/ktbweb/en/pid/0)
Siam Commercial Bank (http://www.scb.co.th)
Kasikorn Bank or "KBank" (http://www.kasikornbank.com)
Bank of Ayudhya (http://www.krungsri.com/en/index.aspx)
Thai Military Bank (http://www.tmbbank.com/TMBBank/index_en.jsp)
Providing a good service to foreign customers poses special challenges for Thai banks. Firstly there is the issue of providing adequate numbers of English-speaking staff in branches and call centres, as well as English-language literature and web site content. Secondly foreign customers have different banking needs and expectations, due to a number of factors including cultural differences and government regulations. Bangkok Bank has launched a unique initiative to enhance their standard of service to foreign customers, by establishing a special group within the bank known as the 'Expat Banking Team'. The Team, comprising both Thai and foreign staff, examines products, policies and procedures from the perspective of the bank's non-Thai customers. They also play a role in educating branch staff to deal more confidently and effectively with foreigners. The Team also looks at the quality and availability of foreign-language information concerning the Bank's products and services. Their outputs have included, for example, an English language brochure and information booklet. The booklet can be downloaded from the Bank's website at http://www.bangkokbank.com/Bangkok%20Bank%20Thai/Documents/Site%20Documents/Other/bankingGuide_june.pdf
The Expat Banking Team is a great concept and it is to be hoped that other Thai banks will eventually follow suit, leading to across-the-board improvements in the standard of banking services on offer to expats and visitors to the Kingdom.
May 2011: Thais and E-communication: Dealing with unanswered emails
July 2011: Buying real estate in Thailand #1 - Buying in the name of your child
Generally speaking, people who are not Thai citizens cannot buy freehold real estate in Thailand, other than certain condominiums. As a consequence of existing legal restrictions on foreign ownership, various methods are employed to broaden the range of property investment options for foreigners, and/or to provide a greater degree of security or protection in relation to those investments. Each of these approaches suit different people to varying extents, but all involve degrees of cost, difficulty, risk and/or uncertainty. One such approach is to purchase property in the name of a child subsequent to a marriage between a Thai and non-Thai person.
Section 1577 of the Thai Civil and Commercial Code states: A person may transfer by legacy or gift a property to a minor, subject to its being managed, up to the time of majority, by a person other than the person exercising parental power. Such manager must be named by the transferor, or, in default, by the court, and his management shall be subject to section 56, section 57, and section 60.
Even so, there are many instances where Lands Department officers either refuse to register such a transaction, or apply their own rules with regards to the age at which this can occur. For example some officers will refuse such a transaction where the child is too young to sign or to understand the procedure. Other officers are willing to place a child's name on the title deed provided only that both parents and the child attend the Land Department office with appropriate documentation.
Transferring to the name of a child may occur at the time of initial purchase or at a later date. One example of the latter may occur when property is left to a non-Thai spouse by virtue of a Will, and that parent decides to transfer the property to his/her child rather than being forced to dispose of it as per Thai law.
A positive feature of this process is that the property is then somewhat protected due to (for example) Sections 1574 and 1575 of the Civil and Commercial Code. These provisions restrict the actions of the parent/s in order to protect the interests of the child. If it is necessary to sell the land before the child comes of age (twenty years old), then the court must be petitioned for approval. It is not permitted, for example, for a parent to loan money from a bank using the property as collateral (i.e., mortgage the property). The court will only grant an order to sell the property if the court considers that it is in the child's best interests to do so.
A few of the other issues related to buying property in the name of a minor child include:
- Where further children are born after the transfer occurs, there is a question of equity in having a major family asset placed in the hands of one particular sibling (who may not later agree to apportionment).
- Should a non-Thai parent seek to guarantee his or her ongoing access to the property by way (for example) of a lease or usufruct, then it is generally not possible to have a minor child as a party to such an agreement unless with the prior approval of the court.
- In Thailand, wills cannot be prepared by anyone under fifteen years of age, therefore should a child die, assets are distributed as per Thai law (quite possibly resulting in apportionment to extended Thai family members).
- Should a building permit subsequently be required (i.e., to undertake construction) then the relevant authority may refuse to accept an application where the owner of the land is a minor.
September 2011: Thais that Bind - Part I and October 2011: Thais that Bind - Part II
November 2011: There are lots and lots of foreigners living in Thailand
December 2011: An article did not appear in the December 2011 edition
January 2012: Some comments in relation to the issuing of partner visas for Thai nationals - Part I and
February 2012: Some comments in relation to the issuing of partner visas for Thai nationals - Part II
March 2012: Thai Managed Funds rate highly in international survey
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