Information Oversea Investors should
know about Investing in Krabi Real Estate

We as a local expert engaged in giving consultation on investment in properties for a long time, and besides our skill we can communicate on the same wavelength with the local people since we were born southerners in the neighbouring provinces, thus we enjoy the advantage over other consultants even those with international operations and network that may just lack the knowledge on cultural background inherent to the locality each of which has its own culture, way of life common do’s and don’t’s that differ from one place to another all the world. Conducting a study on any project through someone with deep background on the local culture is thus vital. There have been examples of failure and immense damages to foreign investors from wrong investment decisions that can be related as below:

• A Singaporean investor purchased a beach front plot of land on Phuket western part wit long stretch of superb beach and at a price which was not too high, completed with all legal papers on the plot. After ownership in the land was transferred it could not be used to construct any building because the local regulations prohibited construction in the first 20 metres of land from the shoreline in Zone 1, while in Zone 2 in the next 30 metres from Zone 1 building allowed but with a maximum height of 6 metres, and 70% of total area of the plot must be left as an open, non built-up area. The land bought by the Singaporean investor thus could not be used for constructing any building because its shape was a long stretch along the beach while its width was not enough to permit even design for building that complies with the local regulations.
  
  
• An American investor living in Hong Kong coming to buy land put down deposit on a plot behind Ao-Nang Hill with the intention of building a bungalow. The land owner was to arrange for proper title document for the land before transferring ownership. It so happened that land in the said area was public land for which proper land title documents could not possibly be issued. This led to a charge being file in court and possible loss of the deposit.
  
  
• An investor from Bangkok bought a seaside plot in the middle of Kamala Beach to build Kamala Beach Hotel next to Kamala Police Station. All documents pertaining to the land were proper and construction went on to completion but later on the completed building could not be utilized because by regulations any construction of a hotel with more than 80 guest rooms could be done only with a report on Environment Impact Assessementg (EIA) prepared and submitted to the Environment Commission and approved by the said Commission before construction can be applied for. The Commission was not in any position to accept and application on building already constructed then the required report submitted. This simply means that no construction of any building, nor land improvement on the plot can be made before submitting the EIA report to the Commission.
  

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In fact there still are many factors to be considered in making investment in properties, such as:

1. Locating a plot suitable for the project

• A suitable plot should be found, complete with all public utilities such as roads, electricity supply, telephone, water supply, etc.
• The plot must have a history free from anything negative such as previous murder committed there, problems relating to the local organization, being close to a cemetery, etc.
• The plot should not be close to location where land is under expropriate plan by the state, or during any litigation process with the state organization, or during legal proceeding in court for dispute or ownership claim.

2. Check on the plot with Official agency

• The plot to be bought must have valid papers such as land title deed, Nor Sor Sam Kor, Nor Sor Sam narmal that can be verified by the local official land bureau.
• Check all development plan and land expropriation to be affected by government agencies for the entire neighborhood of the plot such as the Town Planning Agency, The Provincial Civil Works Department, etc.

3. Foreigner’s right to ownership of enterprise and land

• Many foreign investors had to give up investment in this province due to the reason that they could not become 100% owners in a company because provisions in the Thai Law that required majority of Thai holding shares in a company to be incorporated. This presents a risk in investment to foreigners. We have solution for you on this problem that will enable 100% ownership in a company with full legal validity under a special law on investment promotion.

4. Finding right designer for business to invest

• Sometimes a local architect is more vital to the design of the building and selecting materials to use in the project because of the climate and weather conditions by the sea affect deterioration of materials at faster rate that usual while at the same time heat, rainfall and strong seasonal winds. On these factors only a local architect with experience is able to come up with a design of maximum efficiency.
• Soil test and load bearing capacity of soil on which the building is to be constructed.
• Preparation of Contour Map or Topographical Chart.

5. Application for various permissions
After we have acquired a plot of land and obtained project details as well project design we come to the point where all the numerous permissions have to be applied for. These can be briefly presented as follow:

1. EIA - any building with more than 80 rooms required the report on environmental impact that may need 3-4 months to prepare, and a further 3 months for the Commission to process. The total time needed for this phase is about 6-7 months. If less than 80 rooms still to required the report IEE on environmental impact at Provincial Office (EIA only in Bangkok) and may need for this phase is about 3-4 months.
2. BOI - this is an application for investment promotion and the basic criterion is whether the location is in the zone for which this is applicable. This phase is needed to acquire 100% ownership for foreigners.
3. Construction permit must be obtained from the Local Administrative Body.
4. Application must be made for utilization of the building after construction is completed.
5. Application must be made to obtain license/permit to operate a hotel (in case of rooms for guests).
6. Application for permit to operate a tourism enterprise from the Tourism Authority of Thailand.
7. Applications for other permits/licenses required for the respective activities.

6. Finding suitable construction contractor

• This depends on the size of the project, but in most cases contractor from Bangkok sub-contract the works to local contractor. The main issue in this contract is to check the contractor to employ on his history, past performance, and the warranty given for his result of works, etc.
• Many projects suffered from construction delay because the contractor abandoned the works and failed to comply with the quality standard specified in the plans and drawings. Therefore it is a must to require performance guarantee from contractor and make deduction for every payment for each phase of work to contractor as guarantee for the result of his works.

7. Using the suitable party for landscape and landscape design

• Landscaping is vital for overall appeal of a project. Using the right contractor and designer with thorough knowledge on climatic condition and floras in the locality will be better than using contractor from other locality without adequate skill or knowledge on soil that may lead to damage in the long future.

8. Creating a positive image and good relation with local people

• A project sole objective is not just to make profit, conservation of the environment and giving assistance to local people are also vital. Having good relation with the local people, participating in religious activities or offering scholarship to the local people to create image are necessary. We can offer our expertise to you on these matters.

In some occasions it is necessary for the investors to seek assistance from consultant or provider like us who deeply realizes, native and will stay here forever. We are not similar to the foreigner owned companies who establish the businesses in Thailand and left or returned to their own countries after disaster.

Should you have any further query or interested in our service please contact:
Krabi property

Phuket Real Estate Agent and Consultant Co., Ltd.,

 

Phuket Office: 96/20 Moo1, Chalermprakiat R.9 Rd., T.Kathu, A.Kathu, Phuket 83120 Thailand
Krabi Office: 140 Moo 4, Huaiyoong, Nurklong District, Krabi 81130 Thailand
Phang Nga Office: 17/1 Moo 7, Baan Bangsak, Bangmuang, Takua Pa, Phang Nga 82190 Thailand
Bangkok Office : 20/168 BaanSuanRachada Condo, Rachadapisek 36, Rachadapisek Rd., Jantakasem, Jatujak, Bangkok 10900 Thailand.

Telephone: +66 76 304100, +66 76 304063, +66 76 304064
Fax: +66 76 223237
E-mail: president@phuketrealestate.org ceo@krabi-realestate.org
Websites: http://www.krabi-realestate.org http://www.phuketrealestate.org