thaiwanderer

A 30 year lease is to be preferred over rolling one year leases as they may stop rolling!

However IF your ownership of the land is complete and legal then there is no reason why any lease is necessary.

However I suspect your companies are not as watertight and legal as you assume (i may of course be wrong).

Minor exceptions aside the general rule of thumb is that the extent to which you have beneficial use and effective control matches the extent to which you offend the general prohibition on foreigners (assumption here) owning land or others being owners in place of foreigners.

I suspect your structure is such that it is less likely to come to the attention of the authorities but that of itself doesn't make it a legal structure.

It is one thing to know the weaknesses in your structure and be happy with the risk quite another to mistake the structure as therefore safe in itself.

If just between you and your wife can it not therefore be cancelled within a year of (if) marriage ending - like any agreement concluded between husband and wife?

Anyone know what the next court case will entail and what the likely outcome will be?

A box of cakes ensuring success?

I would imagine (though i do not know) that you won't get 100k back, rather you can deduct 100k from the amount that is liable to tax?

Even if you can read the title deed its only as good as when it was issued.

Only the land office can confirm the current details (including encumbrances) for a title.

Beyond that you may also wish to satisfy yourself as to what land the title precisely relates to.

Also you may wish to investigate what restrictions on use there may be on that plot which may not apply to even its very next neighbour.

Etc., etc., etc.

The scale of what dilligence you feel is 'due' is entirely up to you.

However sub divisions into 10 or more plots sometimes require more hoops to be jumped through which may apply even where the other split to 9 was in the past so this may be an additional issue.

If you are satisfied with the company ownership of the land will not result in your interest in and use of the land being lost (whether on personal trust or other means) and are happy to break the law in that control (which may or may not be the case) then there is no need for any lease to secure your interest.

If on the other hand you feel a lease to you personally is necessary then the 30 year lease should be preferred because (obviously) it's longer and more importantly it's registrable at the land office.

In such circumstances tax savings are a non-issue in deciding which to go for.

A friend of mine is just embarking on a court case after finding out his Thai builder will be holding him to 30 years only.

Previously he was fed the line about being able to extend +30 years. Unfortunately the relationship has soured hence the he has been told 30 years only.

I would go the usufruct route which can be setup for a lifetimes use. Easy to do at the local Amphur although you may wish to employ the services of a legal adviser to make sure it's watertight.

Who exactly 'fed him the line' and why did he swallow it?

Even a cursory glance at his lease and a vague passing interest in his investment would have told him that the extra time is an option to renew that is contractual only and he could then have assessed the weight he gave it accordingly.

Builder is a farang. Holder of the lease is the farangs Thai wife.

I did tell him to be careful but he did believe the wifes story about no problem extending the lease.

Since then several instances of inflating service charges and utility fees have soured the relationship.

When the dispute escalated the builders wife let slip about not extending the lease.

He has engaged the services of a Thai lawyer for now to see what can be done.

I for one think he has few grounds for appeal and was a little naive to believe what the builder and wife promised and told him.

Exactly and anyway he has no grounds until the breach, which if it occurs will be at around the end of the first 30 years so there's nothing he can do at the moment anyway.

When the breach occurs he may have a contractual right against the original lessor (builder's Thai wife?) who may not still own the land and or may have no assets.

If he genuinely relied on oral assurances and or didn't consider possibilities (even non-malicious ones like lessor dying) then 'naive' is a little kind imho.

A friend of mine is just embarking on a court case after finding out his Thai builder will be holding him to 30 years only.

Previously he was fed the line about being able to extend +30 years. Unfortunately the relationship has soured hence the he has been told 30 years only.

I would go the usufruct route which can be setup for a lifetimes use. Easy to do at the local Amphur although you may wish to employ the services of a legal adviser to make sure it's watertight.

Who exactly 'fed him the line' and why did he swallow it?

Even a cursory glance at his lease and a vague passing interest in his investment would have told him that the extra time is an option to renew that is contractual only and he could then have assessed the weight he gave it accordingly.

I don't know enough about them but:

if a usufruct can indeed be registered in favour of a (foreign) company

and

the land office co-operate and register such a usufruct

and

it will not later easily be interpreted as offending the general prohibition on foreigners 'owning' land

then

using a foreign company would appear (on the basis of the above assumptions) to enable a foreign individual to have the use, beneficial ownership and effective control of the land for their own life and by their descendants forever (as the company need never die) and also allow future sales ad infinitum of the land to another with no need for future active co-operation of the Thai authorities or liability to Thai tax.

(large assumptions aside of course)

Other than the potential adverse affect on visitor numbers (which is far from self evident given the wealth of 'bad' things Thailand does to discourage tourism) why shouldn't tourists get ripped off?

Not really.....go off island north, or east about 50 kilometres.

I've been to lots of "paradises". Frankly, after a couple of days, they're boring as h3ll.

A pity you didn't take a picture of Bang Tao back then. I believe it resembled a moonscape because of the water-cannons due to tin mining.

Tin mining in Phuket since 1500's AD - paradise? Though would have been worse if Tantalum industry had been allowed.

you'll find the best beaches in Phuket by dating/ marrying a local lady who was brought up there.( Short of that..pm me if you wish and i'll tell you one of them if you don't spread it all around) signed: kill 2 birds with one stone

I would imagine for the majority of TV posters finding the 'best beach' would be infinitely easier than dating / marrying a local woman.

AFAIK

essentially, a condominium = registered as a condominium

The appearance of a building/s is not indicative either way.

You can have a block of individual units with shared facilities etc but they might not be a condominium

or a row of town houses or even seperate villas (with no adjoining walls or structures) that are condominium.

Similarly just because a particular physical layout has been allowed to be registered as a condominium doesn't mean the same structure somewhere else and or at another time will also be allowed (as with anything requiring 'approval').

Assuming the official is on side all you would need to show (structure wise) is separate parts to be individually owned together with collective ownership of the land by all the individual owners together (there are other hoops re environmental impact etc but they don't necessarily affect the type of physical structure per se).

Even a cursory consideration of most nominee structures would show they offend the letter of the law as well as the spirit.

That the practice of using nominee companies is widespread is not because the laws themselves are ineffecitive / easily circumvented its more to do with the lack of enforcement.

That points to much wider issues.

The other point to add here is that big business has no problems with the Bank of Investment rules whereby investing Baht 40 mill for ten years allows the farang to OWN one rai of land in his/her own name.

Hi chiang mai - This is not my area but I do scan the threads - This has to be cleared by someone in goverment? - I don't think this has happened in many, many, years - I Think Naam may have tried this and commented on it in the past.

I THINK the answer is YES but is actually NO.

Has and does happen but is nothing more than bragging rights since tbh the restrictions are such that its less attractive than even using a nominee company or whatever is the current flavour of farang 'ownership' according to real estate alchemists.

Hi thaiwanderer - Can you point to a specific example? I can't. I am not being rude, I am just seeking information. I don't think anyone has been able to do this in some time, but I am happy to stand corrected if proved wrong

Know of several in the last year but with respect they are not public knowledge for obvious reasons.

By their very nature they are small fry sweetners for far bigger deals and the 'ownership' only last for as long as the investment.

The other point to add here is that big business has no problems with the Bank of Investment rules whereby investing Baht 40 mill for ten years allows the farang to OWN one rai of land in his/her own name.

Hi chiang mai - This is not my area but I do scan the threads - This has to be cleared by someone in goverment? - I don't think this has happened in many, many, years - I Think Naam may have tried this and commented on it in the past.

I THINK the answer is YES but is actually NO.

Has and does happen but is nothing more than bragging rights since tbh the restrictions are such that its less attractive than even using a nominee company or whatever is the current flavour of farang 'ownership' according to real estate alchemists.

Yes. There were quite a few postings on TV about this along with the attempted rape of a female jogger in the same area. There was speculation about it being the same guy but never heard if anyone got arrested & charged. I also think this issue was clouded by a police pursuit & arrest in Kata not long after with speculation about him being the Nai Harn rapist.

Living in a gated estate, being friendly with neighbours, simple security precautions such as window bars & good door locks, can all help lessen the odds of being burgled or attacked in your home. If we ever have to resort to razor wire on the walls & armed guards then we truly have a major problem.

Resorting to gated communites is already a bad sign and breeds mistrust and lack of security in one's own mind imho.

From my part in Khanom I haven't seen any slowdown in the land sales .... most land I sell is freehold with the foreign buying the land in his wife's or his Thai Limited Company's name....only a few foreigners have bought leasehold.....

In the Sattehip land office there were refusals to register land in a nominee company and I have heard from a local lawyer that it has started in the Pattaya land office also to investigate nominee Thai companies. So there is an issue here.

I am not sure why you haven't experienced it in your jurisdiction yet. Has anyone else experienced similar refusals any where else?

Honestly, it is not possible to recommend a client to register a land in a nominee company until we find out more about a clear policy regarding this issue.

It is always POSSIBLE to recommend anything but it would take a change of the land code for a legitimate business to RECOMMEND a nominee structure.

There will never be a policy that can be relied on that the land code will be ignored.

A client can make up their own mind on the basis of good advice of the relative risks of the different options which includes historical non-enforcement and tolerance of illegal structures but to make the leap from that to 'things will always be thus' is a step too far imho that too many other 'professional advisors' make.

Typically those advisors make their own mind up about what is likely and then present their conclusion only as representing the status quo with little or no indication it's only an *opinion* or how that opinion was formed.

(* = and unfortunately all too often an opinion from an advisor with little or no qualifications, real experience or professional indemnity)

Thai politics is it about nominee shareholders or nominee land owners. For nominee shareholders the land department does not care as they say that's the responsibility of the Ministry of Commerce to check. Other than the registration rules which are crap, as it only checks in the moment of registration, the land department does not care if shares are transferred after registration in a company that owns land as long as it does not exceed 49%. The Ministry of Commerce does not really care either as they must forward any case in which the expect nominees to the police, but the police does nothing because the government does not want to do anything. So nothing goes to court and here is no nominee problem other than in theory. Likely, and this is the only option, if the government wants they change the foreigner definition, maybe, as this would affect control in the company and directors must be re-elected every year, so foreigners wont be eligible for re-election.

For the time being there is nothing to worry It's only speculation what a nominee is and when it would become illegal, but when it all changes I'm sure it won't be as bad as many think'

It's not at all speculation what a nominee is, though selective enforcement or otherwise is an issue any prudent investor will consider.

I however personally dislike any so called professionals of which there are many dressing up opinions of which way the wind will blow as anything over than a coin toss.

From my part in Khanom I haven't seen any slowdown in the land sales .... most land I sell is freehold with the foreign buying the land in his wife's or his Thai Limited Company's name....only a few foreigners have bought leasehold.....

In the Sattehip land office there were refusals to register land in a nominee company and I have heard from a local lawyer that it has started in the Pattaya land office also to investigate nominee Thai companies. So there is an issue here.

I am not sure why you haven't experienced it in your jurisdiction yet. Has anyone else experienced similar refusals any where else?

Honestly, it is not possible to recommend a client to register a land in a nominee company until we find out more about a clear policy regarding this issue.

It is always POSSIBLE to recommend anything but it would take a change of the land code for a legitimate business to RECOMMEND a nominee structure.

There will never be a policy that can be relied on that the land code will be ignored.

A client can make up their own mind on the basis of good advice of the relative risks of the different options which includes historical non-enforcement and tolerance of illegal structures but to make the leap from that to 'things will always be thus' is a step too far imho that too many other 'professional advisors' make.

Typically those advisors make their own mind up about what is likely and then present their conclusion only as representing the status quo with little or no indication it's only an *opinion* or how that opinion was formed.

(* = and unfortunately all too often an opinion from an advisor with little or no qualifications, real experience or professional indemnity)

Check the Civil and Comercial Code and or take advice - IIRC it continues on an ad hoc basis for as long as both sides allow it to - therefore there are no effective 'rights' so to speak as either side can end it immediately / or with very sort notice

The government does not take away land.

The law clearly states that if a judge finds the title deed not to be in order (i.e. in a company where the Thai shareholders are unable to prove that they actually invested funds in it), then the judge will order the land to be disposed of, and he will state a time frame in which this has to happen.

This time frame will be set between 180 days and 1 year.

Only after this period, the government can proceed with a forced auction, of which the proceeds (minus costs of course) will still go to the entity owning the land.

I seriously doubt they will vote in a law allowing a judge to order the government to buy the land at 33% of listed value!

Not agreeing with land grab post necessarily but slightly OT 100% of declared value would be deemed maximum compensation required - can't then argue not real value as under-declared it for tax purposes.

Anyway it seems like Eljeque or whatever he/she calls him/herself is "Benchmark".

I have to be careful as i got many warnings in here already concerning "Benchmark".

I do hope the moderaters forgive me!

Loverboy, Eljeque is not me. You violated the forum rules before that's why moderators warned you. After all it's not fair to be pessimistic about all developers in town. We have some reputable developers in this town who deliver what they promise too. As investors one always has a certain risk level in investing in anything logically. We can assist the investors to minimum that risk and help them make a good return for their investment.

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Anyhow, is this thread an advertisment and or an inane discussion and or an inducement to break the law?

Its the same as putting in any Thai's name and leasing - usual problems apply.

In fact probably more derogatory to be giving to Buddha with only one hand.

The partner, a legitimate local firm, would not be acting as a nominee, and would allow the foreigner to hold on to his house, albeit at a price. Ghoulish perhaps and certainly not a one size fits all solution but some may be prepared to look into this...

(BTW not something that I am doing, just throwing it out there)

'Proper' professional nominee individuals and companies (not lawyers staff or guy off street) have been used for many years?

Although there is little or no formal protection by way of shares they generally enjoy real protection as paying an influential individual / company for their service.

Of course usual no guarantees rules apply but on balance it probably offers more practical real protection than apprentice thai law advocates imaginings of a secure structure (all theory, ignoring reality).

A good friend of mine ( farang ) who is a resident in Bangkok for many years wanted to sell his condo. He married a Thai lady. He has many investments under BOI and gets a Thai ID because of his investments in Thailand and also for ease of investments. When he buy the condo he remitted the money from overseas and he buy under Foreign quota for the sales. Two weeks ago , he found a foreigner willing to buy his condo. When he wanted to do the transfer for the sales of the condo , the condo manager says he cannot transfer because he is now a Thai Citizen and he can only sell to a thai citizen or a Thai company. And his ownership now falls under the local Thai ownership rules. Any comments on this ruling.

Why would your friend take the word of the "condo manager" (juristic person manager?) in this? It certainly is not a ruling. If the condo building has not exceeded the foreigner quota, he can sell it to whoever he wants. He should engage a reputable attorney with experience in land ownership issues and go to the Land Dept and ask them.

Personally I think the "condo manager" is saying this because the deal does not get him any commission as one where he found to buyer would.

TH

if as appears its a resale the quota will most likely have been filled long ago

Agreed, and since he bought it within the quota he should be able to sell it to another foreigner.

TH

TH

He may have thought he was buying under the foreign quota - if it was registered as such then of course there is no problem and he is just being told a story which is entirely possible of course.

But as I said earlier it may well be that it was not so registered and the condo manager is not the first place to find that out.