Magna Carta Law Firm > FAQ Section > Using Escrow in Thailand: How Does It Work?


Using Escrow in Thailand gives greater protection of both parties’ interests with the assurance of compliance with the contract terms and conditions.

What is Escrow?

Escrow is a financial arrangement whereby an unbiased third party holds an asset or fund until both transacting parties have fulfilled their agreements.


An individual or company uses escrow when they feel uncertain whether one party will be able to complete a transaction. When you enter into an escrow agreement whether as a buyer, seller, or lender, you establish confidence that contract terms will be followed. Hence, it ensures a fair and smooth transaction from start to completion.

Who may act as a Third Party?

Only commercial banks, finance companies or juristic persons, may hold an Escrow License from the Ministry of Finance.


An escrow provider must not have any direct or indirect interest in the transactions of the parties to the agreement.

What types of transaction go through Escrow in Thailand?

Escrow is usually associated to real estate, but it also relates to other financial deals such as online trades, investments, mergers and acquisitions, and many more, where either party needs reassurance that the transaction is secured and can be completed. Having these funds in a neutral account protects both parties, by making sure that the transaction happens.

What are the benefits of using Escrow in Thailand?

  1. First of all, there is a greater protection of both parties’ interests.  There assurance of a faithful compliance with the terms and conditions of their contract.
  2. It reduces the risk of fraud. There is a guarantee that the buyer will receive satisfactory property, goods or services before disbursing the funds. On the other hand, the seller will be confident that the buyer has the agreed funds to transact.
  3. There is a timely and proper exchange of funds, properties and/or documents, upon the occurrence of a certain event or the fulfillment of obligations of the contracting parties.

How does Escrow in Thailand work in Real Estate Transactions?

  1. The buyer of the property transfers funds to an escrow provider.
  2. The escrow provider informs the Land Office of the escrow arrangement for recording purposes. This prohibits the registration of transfer of the property ownership until the land office receives written notice from the escrow provider.
  3. The escrow provider must duly maintain the property and/or any related pertinent documents.
  4. If all the requirements and terms of the transaction are met, then the transfer of funds to the seller of the property shall occur. It is the escrow service provider’s responsibility to oversee that making the payments follow the timetable and conditions in the escrow contract.
  5. Once the transfer of funds to the seller occurs and the escrow agreement comes to an end, the escrow service provider closes the escrow bank account. He then immediately notifies both parties.

What happens in the event of breach of contract such as the seller cannot complete the project?

The escrow service provider will not disburse the funds to the seller and then returns the funds to the buyer.

What happens in the event of any disagreement between the buyer and the seller?

There shall not be any transfer funds or property to either party until both parties settle to an agreement or under a court order.

What if the escrow service provider becomes bankrupt?

The funds in the escrow account and the property under enforcement will be protected against attachment or seizure.