mrmagyar

Has anyone with an LTR visa (Wealthy Pensioner, Wealthy Citizen or WFT) bothered to get a Thai tax ID? I understand that there are no Thai tax obligations with these visas but wondered if anyone had got the tax ID and filed proactively, or planned to do so?

Thank you @YaDongImproved

Does anyone what the typical capital structure looks like for a Thai company setup for owning land? Obviously we all know that it's against the law to use nominee shareholders or such a structure solely for the means of allowing a foreigner to own land. However, it remains common. In such a structure, if one was to setup a Thai company with a couple of friendly Thai shareholders for this purpose is the usual procedure to put in a minimum amount of share capital and then the foreigner would loan the company money to buy land and build? Obviously it makes a difference what that capital structure looks like in the event that relations soured with the Thai partners and suchlike. Thanks

Understood on that. But anything that reconfirms this, from the horses mouth, post-tax changes, would be welcome.

Could you link to the facebook thread please? Or tell us which page it's on?

Well this is something of a curveball for those of us with a freshly minted LTR Visa: https://www.thaienquirer.com/50744/thai-government-to-tax-all-income-from-abroad-for-tax-residents-starting-2024/ The commentary in the second related article suggests this is designed to be aimed at Thai's, but it seems LTR visa holders would be caught in the net: https://www.thaienquirer.com/50748/new-tax-regulations-raises-questions-and-concerns/

Thanks @khunPer, your posts are always very constructive and informative.

Thanks Nigel. That's a useful and informative post and I'd agree on all 3 obstacles raised. I think these are the same challenges faced by any 'company' model for land ownership. The only real difference i'm trying to factor in here is the loan from a foreigner/foreign entity to the Thai trading company. The thinking being that the loan removes any real 'value' from the company itself, and therefore any incentive for malpractice on behalf of lawyers or indeed the Thai shareholders.

Did you read the post?

The company would operate the property as a commercial endeavour, like a guesthouse/hotel.

IV. Foreign Security Interests on Real Property in Thailand While a foreign person or juristic entity may not normally own land in Thailand, it may enjoy security interests on land as a mortgagee-creditor. Section 80 of the Land Code read together with Section 16 of the Financial Institutions Act, B.E. 2551 (2008) allows a foreign person or juristic entity to accept a mortgage without prior approval of the Fiscal Policy Office, Ministry of Finance, on the express condition that the Land Department is satisfied that the mortgage does not fall under the definition of credit foncier and associated business activities according to the Financial Institution Business Act, BE 2551 (2008). Similarly, Section 702 of the CCC and the Land Code does not distinguish between domestic or foreign mortgagees – both having equal rights. Should ownership of real property in Thailand vest with a foreign person or juristic entity, disposal of the property must occur within five years from the date of vesting, which period the Bank of Thailand may extend at its own discretion. https://www.lexology.com/library/detail.aspx?g=3625e95c-61c3-42a0-a2ea-58d57b3aefce

Getting into the weeds of the foreign land ownership conundrum here: Does anyone know if the following structure would be legally workable, and indeed if it's ever used in Thailand? Thai company is formed with the purpose of building and operating residential property for rent (100% Thai) - Company buys land with an interest only mortgage from a foreigner - Company leases land to foreigner (profit generating) - Lease payment covers mortgage interest == no taxable profit I have heard it said before that in this case, the leasee of the land couldn't also be an owner of the company. My thinking is that the mortgage itself prevents any potential issues over claims to the company's assets, as it's effectively indebted to the the foreign mortgagee to the full extent of its assets. (It provides an additional layer of security to the foreigner). In this scenario I would envisage that the company would then operate the property as a rental property (short or long term) and as such, the business is actively trading.

This is very well thought out and put together Chris. I just think it would be misleading in the extreme if the LTR visa holders were expected to pay tax on their earnings here. Given that these questions are simply never asked of the Elite visa holders either, i'm really fairly confident that the intention is that LTR holders are not going to be asked to pay tax. That said, I agree that sufficient ambiguity has been left to make it uncomfortable. But that is the way here. I quote another member recently: "In Thailand there is always engineered uncertainty because that introduces more opportunity for tea money."

I agree that this is the crux of the matter at hand here. The link that @aublumberg refers to directly contradicts your point. And so it would at this stage seem to be an argument between the authority of this Foreign specialist tax advisory, or the Thai tax office. I would also tend to side the Sherrings here. It is both my own understanding and corroborates with conversations i've had directly with the BOI team. I would also expect that the tax office are not completely au fait with the LTR visa legislation and are more likely to be relaying 'safety first' advice. It's good discussion though, and it'd be great to get something conclusive either way.

Yes, you're right there.