Investing in Thailand as a French expatriate

French expatriates who invest outside their country of residence often choose France, whether to maintain ties with their country of origin, build up assets that can be passed on to their children, or prepare for their return home or retirement.

But loans are increasingly difficult to obtain, and interest rates are on the rise. This is especially true for non-resident expatriates in France, who are considered riskier by French banks.

These factors are prompting French investors, and expatriates in particular, to think about new ways of building up a diversified, profitable portfolio.

In this article, we explore the alternative of real estate investment in Southeast Asia, and in particular in Thailand, a country with a stable economy for many years. What are the points to consider and the main reasons to invest in real estate in Thailand compared to France?

A diversification solution

Historically, real estate has been considered a safe haven, as stone is a tangible asset that is not subject to the fluctuations of the financial markets.

Investing in real estate in Thailand, especially if you already have assets in France, is a good way to diversify and avoid putting all your eggs in one basket. It also allows you to benefit from the stability of the Thai Baht, which has already proved its worth in the face of crises. All the more so as Thailand, the^2nd largest economy in ASEAN, is enjoying strong economic growth (3.5% forecast for 2023).

In some cases, it is possible to buy freehold as a foreigner, particularly when buying a condo under a Condominium license.

More affordable prices

Real estate in Thailand is particularly affordable compared with France: for the price of a studio in Paris, you can find a 3-bedroom villa with pool to European standards on the islands. The cost of living is also lower, although it has risen in recent years as Thailand’s economy has evolved.

Higher rental yields than in France

In popular tourist areas such as Phuket or Pattaya, it is possible to achieve higher rental yields than in France, on the order of 6 to 7%/year net of charges, with low taxation, whereas the average yield of a rental apartment in Paris in 2023 is around 3.5% gross.

However, it’s important to bear in mind that investing abroad involves a degree of risk. It is therefore advisable to be well-informed and to approach real estate experts who can give you objective advice.

Although investing in Thailand is an interesting opportunity, its real estate market remains very different from France. There are several specific features to take into account:

Ownership rules for foreigners

As explained, it is possible for a foreigner to be the full owner of his property in the case of the purchase of an apartment under a Condominium license. However, in the case of the purchase of a villa or apartment outside the Condominium license, it is not possible for a foreigner to own the land. In most cases, acquisition is carried out under a Leasehold (long-term lease of 30 years, renewable twice).

Depending on your project, you’ll need to take these property rules into account(more on this subject in this article).

Taxation depends on your personal situation

The taxes you will have to pay in Thailand are generally low (no capital gains tax, no inheritance tax, etc.), but it is important to find out about the taxes in force in your country of residence: particularly for expatriates, whether a double tax treaty exists between your country of residence and Thailand. You may also be required to declare income earned abroad.

In short, taxation will depend above all on your personal situation and your country of residence. Whether you’re investing in France or Thailand, it’s advisable to discuss the subject with an expert in the field.

Financing your purchase

In terms of financing, it will be difficult to obtain a loan from a French bank for a property purchase abroad, unless you have a property to mortgage in France. The same applies to Thailand, which lends very little to foreigners.

Unless, as an expatriate, the banks in your country of residence are able to grant you a loan, it is advisable to have the full amount needed to invest in real estate in Thailand.

Osiris Investissements assists French and expatriate buyers with their projects in Thailand, Cambodia and Bali. Please contact us to arrange a free consultation with our experts in France and Southeast Asia.