The short answer

Escrow is an arrangement in which a neutral party holds money until agreed conditions are met, then releases it to the seller — or returns it to the buyer if the conditions fail. It protects both sides of an international deal where trust and enforcement are hard. It's worth using for off-plan property, business purchases, high-value private sales and trade. Vita Capital, our FX and escrow partner, holds funds in regulated escrow accounts until release conditions are fulfilled — and can handle the currency exchange in the same place.

How escrow works, step by step

1. Agree the terms. Buyer and seller agree the price and the conditions for release.
2. Appoint the escrow agent and sign an escrow agreement setting out those conditions.
3. The buyer deposits the funds into the secure escrow account.
4. The seller delivers — the goods, the business, the documents or the property transfer.
5. The conditions are confirmed — by both parties, documents or an agreed inspection.
6. The funds are released to the seller, or returned to the buyer if the conditions fail.

The escrow agreement is the heart of it. Everything depends on the release conditions being written clearly enough that there's no argument about whether they've been met.

Escrow terms in plain English

The words you'll see in an escrow agreement, and what they mean.

General definitions. Your escrow agreement sets the exact meaning for your deal.

Who's involved

The parties in a typical international escrow and what each does.

General description. With Vita Capital, escrow and currency exchange can be handled by the same specialist.

Why escrow matters more across borders

• Distance. You can't easily inspect, visit or turn up at the seller's office.
• Different legal systems. Suing someone in another country is slow and expensive.
• Unknown counterparties. A private seller or small business may have no track record you can check.
• Currency. The money may need converting, adding another step where things can go wrong.
• Fraud. International payments are a favourite target, and once sent they're hard to recover.
• Staged deals. Off-plan and business purchases are paid over time, against milestones.

Our recommended way to use escrow

Our number one for escrow on international deals, the Thai account to receive released funds, and a cheap option for small payments.

Escrow, direct payment or a lawyer holding funds?

The three ways a large payment is commonly made, side by side.

ThaiLawOnline (2026) on the Escrow Act B.E. 2551: a developer, seller's lawyer or intermediary holding funds is not escrow under the Act.

When escrow is worth it

Escrow or a letter of credit?

In international trade, the traditional alternative to escrow is a letter of credit: the buyer's bank promises to pay the seller once specified shipping documents are presented. It works well for regular, larger trade between established businesses with banking relationships.

For most expats and small business owners in Thailand, escrow is the simpler and more flexible choice.

Escrow under Thai law

Thailand has had a dedicated escrow law since 2008: the Escrow Act B.E. 2551. Its main points:

• Agents must be licensed by the Ministry of Finance — commercial banks, financial institutions and other approved companies.
• Agents must be independent. A developer's own bank can't act as escrow agent for that developer's sales.
• Escrow money is ring-fenced, so it can't be seized for the agent's own debts.
• Fees are split equally between buyer and seller unless they agree otherwise.

Escrow is voluntary in Thailand: the default is direct payment, and many foreign buyers are never offered it. You can ask for it — and for off-plan purchases, it's worth asking. Since 31 January 2025, off-plan condo reservations must also use a standard "controlled" contract, which works well alongside escrow on staged payments.

Typical release conditions

The conditions are what makes escrow work. Some common examples:

Illustrations. The escrow agreement sets the actual conditions — make them specific and checkable.

A worked example: off-plan payments through escrow

A ฿4,000,000 off-plan condo, with each instalment held in escrow and released only when the developer reaches the next stage. Illustrative schedule at ฿44.38 = £1.

Illustration only; developers set their own schedules. If a stage isn't reached, the escrow agreement decides what happens to the money still held.

Why sellers agree to escrow

Buyers sometimes worry that asking for escrow will put a seller off. In practice, escrow protects the seller too — and a serious seller usually sees that.

• Proof the money is real. Once funds are in escrow, the seller knows the buyer can pay.
• Certainty of payment. When the conditions are met, the money is released — no chasing.
• A faster deal. Trust is built into the process, so less time is spent on reassurance.
• A fair split of cost. In Thailand, the fee is shared equally unless agreed otherwise.

If a seller or developer flatly refuses any form of independent escrow on a large payment, that tells you something worth knowing before you send a single baht.

Escrow and currency together

In an international deal, the money usually has to change currency as well as hands. That raises two questions: when is it converted, and at what rate?

• Convert before escrow and the seller knows exactly what they'll receive; you carry no currency risk while it's held.
• Convert on release and you keep your money in pounds until the deal completes — but the rate may move.
• Fix the rate with a forward if the release date is known, so neither side is surprised.
• For a Thai condo, check with your lawyer how escrow fits the rule that purchase money arrives in foreign currency with an FET form.

Using one specialist for both escrow and currency keeps it simple. Vita Capital offers both, so the conversion, the holding and the release are planned together.

What escrow costs

Escrow fees are usually a small percentage of the transaction — in Thailand typically a fraction of one percent, sometimes with a minimum charge — and are split between buyer and seller unless agreed otherwise. On a ฿3 million off-plan purchase, that's a modest price for knowing your money can't disappear if the building isn't finished.

International escrow specialists quote for each deal, based on its size, complexity and the number of releases. Ask for the fee in writing, who pays it, and whether currency conversion is priced separately. Vita Capital's specialists will set out the fee and who pays it before anything is agreed. Our guide to escrow fees, release conditions and disputes goes into detail.

Questions to ask an escrow provider

• Are you licensed or regulated to provide escrow, and by whom?
• Where exactly is the money held, and is it separate from your own funds?
• Are you independent of the seller or developer?
• What are the release conditions, and who confirms they're met?
• What happens if the conditions aren't met — how and when is my money returned?
• What's the fee, and who pays it?
• How is a dispute handled?
• Can you convert the currency too, and at what rate?

How to spot a fake escrow scam

Fraudsters know buyers trust escrow — so some set up fake escrow websites and insist you use them. The warning signs:

1. The seller insists on a particular escrow service you've never heard of.
2. The website is new, has no verifiable licence or registration, or copies a real company's look.
3. You're asked to pay by unusual means — gift cards, cryptocurrency, or a personal account.
4. There's pressure to act fast, before you can check anything.
5. The contact details don't match the company's registered office or official site.
6. The price is too good to be true. It usually is.

Choose the escrow provider yourself, check its regulation independently, and never pay a "service" introduced by the other party without verifying it.

Staying safe online

• Type the escrow provider's address yourself rather than clicking a link from the seller.
• Confirm account details by phone on a number you've verified independently.
• Use a private, protected connection when logging in from hotels, cafés and airports.
• Use strong, unique passwords and two-factor sign-in on every financial account.

How we researched this guide

We used Vita Capital's own published information on its escrow solutions (October 2026) and ThaiLawOnline's 2026 guide to escrow accounts in Thailand (updated 6 October 2026), which reviewed the Escrow Act B.E. 2551 in Thai. Worked examples use ฿44.38 = £1 (Wise, 12 October 2026). Vita Capital is JLIT's FX and escrow partner; we arrange introductions and may receive a fee, which never changes what you're quoted. Checked 13 October 2026. This guide is general information, not legal advice — always use an independent lawyer for the agreements.