Koh Samui Finance

Samui has long been known as a cash economy and until recently major property purchases required large cash transactions that often took place inside the island's banks. Fortunately, the Thai banking system is now quite sophisticated and can deal with all manner of transactions. However, recent exchange rate fluctuations, combined with a 30% withholding tax placed on large investments entering the country caused some concern.

This witholding tax has since been revoked and investments are once again freely entering Thailand and Koh Samui. But property purchases are still subject to the country's normal tax laws and this should be checked with an accountant before money is exchanged.

One anomaly on Samui is that unlike other places in Thailand, it is common practice on the island for owners to charge "key money" on leasehold properties. This means that buyers may be asked for an initial, large down-payment followed by regular monthly payments to fully own the property.

Financing options for foreign investors have not yet become readily available, although some developers offer financial assistance through recognized firms such as GFS, this allows buyers to reduce their capital outlay, and stage payments over extended periods. The general approach for properties bought off plan is to ask for a deposit to secure the contract, followed by regular payments at certain stages of the construction process with final payment due upon completion.

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