Laws That Foreigners Need To Keep in Mind When Buying Property in Asia
KARACHI: In an increasingly globalized world, people are travelling more than ever. Those who travel often consider buying property abroad, many in Asia. However, those wishing to invest in property in other countries should bear in mind local laws and restrictions on acquiring real estate. Are you interested in purchasing a condo in the Philippines? Perhaps a coastal villa in Galle, Sri Lanka? Or maybe a luxury house in Pakistan? It’s always best to do your research and find out about any regulations or restrictions first.
It’s now possible to purchase your dream home in Pakistan!
Foreigners working and living in Pakistan can buy or rent properties; however, the Government requires them to complete certain legal formalities with the board of investment and the Trade Development Authority of Pakistan. Foreigners intending to rent or buy property also have to submit the following documents to the Home Department.
1) A letter of employment from the company in which they are working at (e.g embassy/consulate/multinational) that mentions the nature of their residency, as well as the period of intended stay, along with the company’s physical address in Pakistan.
2) A complete copy of foreigner’s passport with a valid visa and six recent photographs.
3) The landlord/ property owner and the real estate agent are both required to submit a copy of their CNIC for record keeping.
4) The landlord/property owner is required to provide proof of ownership(e.g, certified copy of registered lease document of the property, a map, drawing and approval site plan) that has been attested by a Notary public.
According to the current law, the property can only be occupied by the person, whose name is on the contract. If the occupant of the property changes, a new contract or deed should be drawn up, and the name of the new contract should be communicated to the respected Home Department within a day.
Beware if procedures are not complied with:
1) Cancellation of visa and prosecution before the deportation of the foreigner.
2) The building’s owner will not be allowed to rent or sell the property for five years.
3) Investigation and prosecution of the real estate agency owner as well as the estate agent.
Foreigners cannot purchase land in the Philippines, but they can purchase condo units
The Philippines proves to be a hot territory for foreign property investors in 2017, with rising tourism and a demand for affordable, yet high-standard housing from its locals. Just like in its neighbors, Vietnam, Thailand and Cambodia, foreigners are prohibited from having free ownership of land in the Philippines. Despite this, there are some exceptions to this rule e.g. If your property was acquired before 1935 and you are a foreign national who either purchased it or inherited it, you can legally own your property. In terms of property sold after 1935, foreigners are not prohibited from owning property in the Philippines altogether.
Thanks to the Condominium Act foreign nationals are permitted to purchase condominium units in the Philippines. However, in a single condominium project, at least 60% of the project must be owned by nationals of the Philippines by law. This regulation prevents one extremely wealthy foreign buyer from purchasing entire blocks and subsequently driving prices up. Unit owners are free to sell their unit and can make reasonable renovations to their unit, as long as these renovations do not affect any areas outside of the boundaries of their unit. Long-term lease is another viable option for foreign investors, looking to acquire land.
2017 promises to be the year of the condotel, which is sold as the foreign investors dream, due to its ‘hassle-free’ nature. A condotel is a set of condos, grouped together like a hotel. One of the main benefits of the condotel is that the maintenance of the property is taken care of by property management, a particularly attractive prospect for those based abroad, unable to keep a close check on their property.
Sri Lanka is relaxing its property laws
Three years ago, in an attempt to curb tax evasion (Reuters), Sri Lanka’s government imposed strict restrictions which prevented international buyers from purchasing land or property on the island. Unfortunately, instead of pulling the country forward, this move ended up holding it back with its goal of competing in a global economy. The exciting news is that during the 2017 budget announcement, which took place at the end of 2016, Sri Lanka’s finance minister announced the relaxation of land ownership laws in the country. The government is set to “remove freehold right restrictions” starting in 2017.
In addition, foreigners entering Sri Lanka (e.g. those with an intention to buy) will be allowed to bring an increased sum of money with them. They will be entitled to bring a maximum of $45,000 into the country, without needing to provide documentation showing where these funds came from. This allowance is significantly higher than the previous allowance of $15, 000. As well as these policy amendments, Sri Lanka is to see the introduction of real estate investment trusts (REITS) in the coming years; yet another positive step towards becoming a main player in a booming Asian real estate market.
Myanmar: A new player with prospects for foreign investors
It is now possible for foreigners to own property in Myanmar, following the Parliament’s decision at the beginning of 2016 to finally approve a foreign ownership law. The Condominium Law, passed on 22nd January 2016, permits overseas buyers to own up to 40 percent of a condo building, a condo constituting of 6+ storeys, on land measuring 20,000sq ft. However, the law also stipulates that said foreigners are not allowed to „manage“ condos, so those looking to rent out units, beware. Current laws also prevent foreigners from owning land, though clarity is lacking as to what this means for foreign condo owners, who, with the purchase of a condo, also receive partial ownership of the land. It is wise to seek legal advice from an experienced legal professional, if you are a foreigner investor looking to buy in Myanmar.
Following the election of the new Government in March 2016 and reports of a slowing economy, Myanmar is expected to revise its corporate law in 2017, which would allow foreign businesses to hold stakes in existing domestic companies, as well as make foreign investment more attractive on the whole, which would signal good news for foreign property investors looking
to buy in Myanmar.
When purchasing property in any country, the best piece of advice is to always get help from a real estate professional. Get them to do as much research as you can, and do your own supplementary research too. Do your due diligence and always question deals that seem too good to be true. Asia is a stunningly beautiful continent, and as the markets open up further and further to international buyers, the demand for property can only rise.