YaDongImproved

The more you invest, the more legal protection you need.make a sap ing sith with other documents. Better than a lease or usufruct. We already registered 3 in the last 2 months. Sebastien.

The problem of buying a company reside in the hidden liabilities. You never fully know what they did with the company. So it is sometimes (always I think) better to set up a new company with preferred shares so the foreigners have minority shares but majority votes. Sebastien,

The profitability of buying a condo for the purpose of renting it out on Airbnb or similar short-term rental platforms depends on various factors, including: Location: Proximity to tourist attractions, public transportation, and amenities can significantly impact rental demand and pricing. Property Quality: The condition, facilities, and overall appeal of the condo will affect your ability to attract guests and charge higher rates. Market Conditions: The local real estate and rental market, including competition and seasonal fluctuations, will influence occupancy rates and profitability. Regulatory Environment: Ensure that short-term rentals are allowed by the condominium's juristic person and that you are in compliance with Thai law. Some areas have restrictions on short-term rentals that could affect your ability to operate legally. Operational Costs: Consider the costs of furnishing, maintenance, utilities, property management, cleaning, taxes, and condo fees when calculating profitability. Marketing and Management: Your ability to effectively market the property and manage guest relations can also impact success. It's important to conduct thorough research and comprehensive financial analysis considering these factors. Learn about all the regulation of the hotel act, as it must be declared as a non-hotel and there are tax implications too. I wrote an article on that. They recently modified the Hotel Act. Hotel Act Compliance: In Thailand, short-term rentals might fall under the Hotel Act. Ensure you comply with local laws which may require a hotel license. Even if you are not a hotel, you must register as a non-hotel. You must inform the Thai ministry of interior that the unit is not rented out as a hotel. The current law, modified in August 2023, mentions “in the case where the residential premises contain a number of not exceeding eight rooms on all floors in total, whether in single or several buildings and with a total service capacity of not more than 30 guests with the purpose to operate as a temporary accommodation for travelers or the other person, this would not be considered as a hotel.” This certification could take up to 40 days. You will need to provide: (1) Identification cards of the notifier and the room owner. (2) Power of attorney if the notifier does not go in person. (3) Lease agreement. (4) Title deed. (5) Condo location map. (6) Main income documents.

The process and cost of subdividing land in Thailand, often referred to as parceling or land separation, can vary based on several factors including the size and location of the land, as well as local regulations. Generally, the process involves surveying, applying for subdivision with the Land Department, and possibly obtaining approvals from local administrative organizations. The fees for land subdivision consist of official fees for the cadastre survey, application fees, and other miscellaneous costs that can be ascertained from the Land Department. Delays in the process can also vary; they depend on the efficiency of the local Land Office, the complexity of the subdivision, and whether the land is covered by a title deed (Chanote) or another form of land document. Normally 3K to 5K and expect 2-4 months. You must go to the land department. Obviously, it is not the land department if you have a Sor Por Kor or a Por Bor Tor. Sebastien

They clarified the rule about incomes earned abroad BEFORE 2024. It does not apply. Franklegaltax is a reputable law firm. Fabian Doppler is director I think, 50% of their clients are German. They do a lot of corporate law. https://franklegaltax.com/important-updates-on-new-tax-regulations-for-foreign-income-in-thailand/

No, but I was not lazy. A few years ago, I had a client who sold 3D software internationally. His revenue was below the 1.8 million baht threshold required for VAT registration by law. Moreover, since he was selling overseas, he could be exempt from charging VAT. For reasons unknown, the accountant registered for VAT and failed to report a '0' VAT each month. Eventually, the client closed his company and moved abroad with his Thai wife. Six months later, the Revenue Department sent a letter to his wife's family, demanding 400,000 baht in backdated VAT. He asked me to handle the situation. I printed information from the Revenue Department's website, highlighting that businesses with annual earnings under 1.8 million baht are exempt from VAT. I also printed proof that VAT isn't applicable for clients outside Thailand. Despite this, they insisted on the validity of the VAT registration. I pointed out that the client was now abroad and the company was closed. I gave them my office address and requested a detailed written explanation as to why he should pay these taxes when their website indicated otherwise. They never replied. Welcome to Thailand. Ask a little bit of work and craziness, and they will forget not to lose the face. That was more than 10 years ago.

Must be the spouse, ascendant or descendant. I believe legitimate child and not adopted. Check the links I posted above. It is a well known technique of estate planning to make gifts instead of giving everything at death, to lower taxes.

https://thailand.acclime.com/guides/gift-tax/ https://sherrings.com/gift-tax-law-in-thailand.html#:~:text=an adopted child)-,On the amount of the gift received in excess of,transfer of the immovable property.&text=or a spouse-,On the amount of the gift received in excess of,a personal income tax return. https://taxsummaries.pwc.com/thailand/individual/income-determination Do you want more?

1) I have permanent residency and declare incomes in 2 countries. I am not worried. 2) do not be worried for state pension. They will never touch that in Thailand. They never did, and will never do. They are not that stupid.

Exactly but who checks bank accounts of individuals in Thailand? How can they know if it is a salary or a gift? Now, they put a mechanism to make it mandatory to declare the foreign incomes if you are a tax resident in Thailand. They want to cut loopholes, not for foreigners, for Thai people. They know most foreigners pay taxes.

It is a law called the “Gift Tax” and applying since 1 February 2016.

That’s my interpretation. However, nobody knows who will do it. For example, will it be at the revenue department? Will immigration request foreigners to give their annual tax income from Thailand. Will your Thai bank give the information to the revenue department? All of this sounds very messy and maybe impossible to really apply. Someone sent me this useful reply finding my text interesting but I am not sure I agree with his second point: Clearly the details of how this will work in practice still need to be worked out by the Thai RD. In addition to the points you make in your summary I understand the following: 1. Under the rules of CRS Thai banks must report to the RD any foreign transactions paid into a Thai bank. So if an individual remits funds to Thailand via bank transfer then the RD will know about it. 2. The burden of proof of the type of funds (ie. Taxable/non-taxable) remitted to Thailand is on the Tax Payer. Therefore it’s important to keep records that prove the source of the funds so (if required) you can provide as evidence when submitting a Thai PIT return. 3. Application of Double Taxation rules is not done by default (ie. You need to apply for it). In the case of UK if an individual wishes to pay PIT in Thailand they need to apply to HMRC for tax relief at source by submitting a completed DT-Individual form to HMRC. 4. If an individual wishes to pay tax in their ‘home’ country (eg. UK) and not pay PIT on the funds they remit to Thailand then they will need to apply for a tax credit in Thailand. The process for this is unclear (to me at least) and would likely involve translation and certification of any supporting documentation (not to mention the stress of trying to submit this at your local Amphur RD office).

These are explains one by one in the double taxation treaties. It depends on your country. This is just in general.

Yes. But you might have to declared them if you live 180 days per year in Thailand or more.

I told the clients to change district and not do the company route. I think it is an obvious choice to do. I like Sap Ing Sith.

I had a fascinating conversation with a client this afternoon that I believe warrants broader sharing. Please note that I am neither a tax nor financial advisor. Thus, the information provided here is purely for your information and entertainment. As someone well-versed in navigating various government authorities in Thailand, having my personal accountant for 17 years, successfully sued the Thai government twice, and managed both corporate and personal taxes for years, I've acquired a certain knack for this. I've also coached accountants to approach their work with a bit more ingenuity. Significant changes to the Thai Revenue Code concerning income earned abroad have been initiated as of January 1, 2024, sparking considerable debate among Thai and foreign residents alike. Let's delve into the details: What’s Changing? In the past, Thailand taxed foreign-sourced income only if it was remitted to the country within the same tax year it was earned. However, the recent Departmental Instruction No. Paw 161/2566 (2023) revises Section 41 of the Revenue Code. Now, any income earned abroad by a Thai tax resident will be subject to personal income tax upon remittance to Thailand, regardless of when it was earned, excluding income earned before 2024. Who is Affected? The amendment primarily impacts Thai tax residents, defined as individuals who spend 180 days or more in Thailand within a tax year. This group includes Thai citizens and foreign nationals who meet the residency requirement. For example, a client I spoke to was transferring money to his wife from his overseas company monthly. Such practices of earning foreign income and failing to declare it are precisely what the current government aims to curb, including closing loopholes involving cryptocurrencies in foreign countries, among others. Notably, this does not concern pensioners in Thailand. Potential Impacts: Increased Tax Burden: Thai residents with significant foreign income may face a heftier tax bill, especially if they have not previously declared or paid taxes on such income. For instance, the client I spoke with today was using an overseas company to pay his wife a salary – a clear instance of undeclared foreign income that must now be reported. Compliance Challenges: Navigating and adhering to the new rules could be complex, particularly for those not acquainted with Thai tax laws. Professional consultation with a tax accountant or lawyer is advisable. In Thailand, the tax period starts on January 1 and concludes on December 31. Tax declarations for individuals are due by March 31 of the subsequent year, while companies have until May 31. Influence on Business Decisions: This new regulation may affect decisions regarding investment or business conducted abroad, as individuals may need to consider the potential tax implications. For example, those with substantial incomes might opt to establish companies in locations like Dubai or the Isle of Man or to draw their salaries as dividends, typically taxed at a lower rate. Exemptions and Considerations: • Double Taxation Agreements: Thailand has entered into double taxation agreements with numerous countries, providing potential relief from double taxation on foreign income. Most pensioners and retirees in Thailand need not worry excessively; they are required to declare their foreign incomes but should not be subject to additional taxation. Given the complexities of Thai bureaucracy, there is a personal concern regarding the potential confusion this may cause with foreign incomes, as well as how the revenue department and immigration authorities will manage this. For example, immigration authorities have previously requested my personal tax documents from Thailand before granting my visa extensions. I recall they requested my tax returns from 2012 to 2014 when I applied for a marriage-based extension. And because my extension was always around March, I did not always had it done. But I had no choice. Just imagine the mess if immigration request foreign tax documents. But right now, it is too early. Nobody knows how they will deal with it in 2025. • Specific Types of Income: Some foreign income types, such as capital gains from assets located abroad, may be exempt from Thai taxation, provided specific conditions are met. • Thresholds and Deductions: The application of certain thresholds and deductions will vary based on the amount of income and the individual's circumstances. In summary, the recent amendments to the Revenue Code mark a considerable shift for Thai residents with foreign income. The full extent of the impact is yet to be determined; therefore, it is essential for individuals to comprehend their responsibilities and seek professional advice when necessary. This client was paying a salary to his Thai wife through his foreign company. It would clearly be a foreign income for her. So he asked me: "What if it's not a salary but a gift?" This situation alters the scenario significantly. The following gifts are exempt from personal income tax: Income from the transfer of immovable property received by a lawful child, up to THB 20 million within a tax year. Maintenance income or gifts received by ascendants, descendants, or a spouse, not exceeding THB 20 million throughout a tax year. Maintenance income or gifts received by a non-relative on occasions of tradition or custom, up to THB 10 million within a tax year. Income from gifts intended for use in education, religion, or public benefit, in line with the donor's wishes, as specified in the Ministerial Regulations. Income or gifts exceeding the above thresholds will incur personal income tax at a rate of 5%. Thus, an individual could give up to 20 million baht per year without incurring taxes. Another client discussed his situation this week, inquiring whether he should declare sporadic monetary receipts. If these are foreign income, then the answer is yes. However, if it's a loan from a family member, like a brother, it is not considered foreign income. If you're already paying taxes, don't worry. While it requires more paperwork, you won't be taxed twice. It's worth noting that with high incomes, setting up a company in places like Dubai or the Isle of Man is an option. Instead of a salary, you could pay yourself in dividends. There are many legal avenues available. Thailand aims to ensure its citizens pay taxes, as many Thais do not. This is evident everywhere: ask your wife, your local noodle seller or favorite masseuse. They do not pay taxes. Sebastien

Information like this one: https://www.khaosodenglish.com/news/2023/12/20/several-properties-in-chiang-mai-are-confiscated-after-being-linked-to-chinese-nominees/

Anyone has information about that place? I was told that two projects are currently investigated. a long term lease of 30 years was refused and they only accepted 15 years. On another case, a lifetime usufruct was lowered to only 20 years. i never heard stories like that before and i manage a law firm for 18 years. I was told by locals that Chinese bought a lot of properties in the area, mostly under a company and the government is trying to clean it…. Thanks for any info.

1) A usufruct is a real right, which means it is attached to a property. Therefore, it does not matter who owns the property; the usufruct persists even after the owner's death. However, it terminates upon the death of the usufructuary. 2) A foreigner can inherit property, including land, in accordance with Section 93 and subsequent sections of the Land Code. However, this requires approval from the Ministry of Interior, which is delegated to the Land Department. In practice, such approval is rarely granted. According to the law, you have between 180 days to 1 year to transfer the property to a Thai national or sell it. This is why relying solely on a usufruct might not be the best strategy, unless your primary goal is security until your demise. With a usufruct, you cannot sell the property unless the owner agrees. This underscores the importance of skilled property lawyers. For an unmarried couple, I would recommend an addendum to the usufruct, plus a Memorandum of Understanding (MOU) and Last Wills. For a married couple, a similar approach can be taken, but the MOU is less impactful. Demonstrating that the funds for purchasing the property were acquired before marriage can be advantageous, as per Section 1471 of the Civil and Commercial Code. I have handled several cases of property inheritance by foreigners. They are allowed to sell the property and retain the proceeds, which is extremely beneficial. Without a Last Will, consideration must also be given to potential heirs such as children and parents under Section 1629, while the spouse is recognized as an heir under Section 1635. Creating a Last Will simply makes the process more straightforward. The most important is understanding the registration process and how contracts can be an additional security. Or course, it happens all the time: people do not respect contracts. But you put penal clauses, damages, or other mechanisms to grant as much as possible rights to your clients. i have been working 18 years with Thai lawyers. Some are despicable. Most do not have a large knowledge of property laws for foreigners as they serve mostly Thai clients. I was one of the first in 2006 to do usufructs. Now, I am one of the first to do Sap Ing Sith. Just registered one before Christmas in Chiangmai and the land department never did it before. Attached is a blue Garuda from a Sap Ing Sith title deed, Sebastien

There are some crazy replies in this topic. Someone said he wouldn’t trust a piece of paper. Well, what is important is the registration in the title deed. The contracts are additional protections depending how they are written. A marriage is a piece of paper and it give birth to marital property, which is a kind of protection. Khun La wrote : « If not mistaken (usually not), a wife can cancel your lease 1 year after divorce. » You are mistaken. You are not a lawyer, do not understand publicity on a title deed which means inscriptions and you believe wrongly that clause 1469 will apply when it won’t. Anyway, you can normally not do a lease with your wife, most land departments are refusing them for 10 years and more. When the owner of the chanotte dies, a lease or usufruct continues if the contracts are well written. And a foreigner can inherit a property by clause 93 and following of the land code but you need a permission to keep it. They always refuse so you have 6 months to 1 year to transfer it to a Thai or sell it and keep proceeds. Usufruct as a real right, meaning attached to a thing, do not stop whoever become the owner. It stops at the death of the usufructuary. Thai lawyers tend to believe that a registered lease becomes like a real right, I tend to disagree but a clause of inheritance inside the contract will do the trick. And not only that, a declaration of intention to renew from the owner by clause 168 will bind the heirs retroactively and protect you for 60 years. This is why you need lawyers and people that have experience in real estate law in Thailand and not listen to everything you heard on forums or Facebook. I do that for 17 years. I NEVER seen one usufruct that I made or lease cancelled by any client. NEVER. There are ways to formulate contracts and make them stronger. Do not buy a template, contracts must be personalized and have as many rights as you can. Sebastien from ThaiLawOnline.

i would disagree. First, the usufruct contract made by the land department is very simple and does not fully protect someone. a good lawyer will make an addendum to usufruct with additional rights like the owner can not borrow, mortgage, transfer or create any encumbrances on the land. You also give possession rights of the chanotte to the usufructuary. You can also provide rights to build or ownership or new buildings on the land and more. Second, you can add a MOU explaining where the money comes from for the purchase of the property. That will be very useful in case of divorce or separation. i write some of the first articles about usufruct and registered more than 100. I am Sebastien from ThaiLawOnline. Today, Sap Ing Sith are a better protection than a lease especially if the land does not have buildings. But of course, you do not read that on forums because people think they are all better than lawyers and do not understand that paying 10,000 or 30,000 baht for contracts made by professionals are one of the best investments you can do on a property that might worth 2,3,5 millions or more.

- registration is 1.1% - name will be registered in back of title deed, right. - your 30 years if safe. No need to get copies of ID and others unless you want to use a nominee, which is illegal. - draft your lease by professional. You need a strong agreement, allowing subleasing, maybe option to purchase in an addendum. You can add declaration of intention to renew and that has a retroactive effect, and more. - at land department, foreigners need their passport (sometimes translated) and Thai need Thai ID and ta bian baan. You also need the chanotte. There are taxes and transfer fees. Taxes to register a lease is 1.1% of total value of the lease. Value of the lease must be at market price. You can not put 1 baht per month for example. - a lease is a lease. If the owner does not want to help with yellow book, nothing to do. Yellow book is not a necessary, it is just a proof of address. You can live in Thailand without a yellow book but personally, I like the pink card as it is small, help for the bank, hospital, many places and avoids the passport. You can get the pink card only after the yellow book. Sebastien from ThaiLawOnline.

It's not about the capital. It's rare for the Land Department to check a company's capital. I've seen instances where suspicion arose if a 1 million baht company purchased a 10 million baht property. However, legally, a company can borrow funds, so this isn't a hindrance. Between 20 baht and 5 million baht capital registered, there aren’t many difference but according to the law, 25% must be paid up (clause 1105 of the commercial and civil code) The Land Department is wary of foreign involvement in companies. They know foreigners setup company to own properties on their behalf. any reputable law firm should warn you and offer your lease, usufruct, sap ing sith, or other ways. But you decide. Often, it's preferable to initially transfer property to a company wholly owned by Thais, and then change the shareholders and directors later. It's important to note that using nominees is illegal, but this is a common practice. You want less scrutiny so you start with Thai people. For foreigners, the company's structure is crucial. Establishing preferred shares is key, allowing a minority of shares to control a majority of votes. It's simpler to set this up at the start than to modify it later, which might involve adjusting the capital to create new shares and can be time-consuming. I can offer through ThaiLawOnline some services to establish a company with preferred shares, translate primary documents, assist with bank accounts, and register VAT. However, we do not provide nominees. We help clients set up companies as per their wishes. I recommend that foreigners hold normal shares and Thais have preferred shares, with the latter requiring 10 shares per vote. Normal shares operate on a one-share, one-vote basis. This arrangement gives foreigners more votes with normal shares and doesn't appear as an attempt to circumvent the system.

No. The old director of the land department was just having a power trip. I heard he asked 800,000 baht to a foreigner for one usufruct. It was Amphur Mueang. The years are approximative could be 2009-2013 but around these years. It was the only place in Isaan very difficult. The rest was depending of offices but Udon Thani Amphur Mueang was a mess. Not any other amphur, just the main one.

It was refused in Udon Thani between 2010 and 2015 more or less. It was refused in one amphur of Ubon Ratchathani when people were not married. It is extremely difficult to do it in Hang Dong district. I registered about 200 usufruct or more since 2006 and you never know. Phuket normally asks tea money. I was one of the first to talk about it in 2008. The problem is not the law, it is the directors of land departments sometimes not liking foreigners to have so much rights. Near Surin, once, they refused a lifetime usufruct and only allowed 30 years. Why? No idea. He just didn't want to look at the law. It was maybe 2010.