House Bought Under A Company Name,

[Rainmaker]

I have bought my house under a company name, I am a 49% share holder and the rest of the shares are split between thai people that I have never met. With the new rules of thai companies how will this effect me? advice would be much appreciated.

[Lite Beer]

I have bought my house under a company name, I am a 49% share holder and the rest of the shares are split between thai people that I have never met. With the new rules of thai companies how will this effect me? advice would be much appreciated.

Buying land and property this way has always been a dodgy method. Technically illegal , but using a loophole to get round the law. The government have been looking into these companies for a number of months.

Have a look through the real estate forum.

[bkkandrew]

I have bought my house under a company name, I am a 49% share holder and the rest of the shares are split between thai people that I have never met. With the new rules of thai companies how will this effect me? advice would be much appreciated.

Well, as I understand it, you control the company through preferential shares. This is now to be seen as that, rather than technically being a "Thai" company, your holding company will be classed as "Alien". This means that you will be given 90-days to report and 1-year to correct, unless you can apply for an exclusion under the "Exclusion List (3)". Failure to gain an exclusion (unlikely, given that the land forms part of the National resources of Thailand) would require compliance - namely giving up 51% of the control of your property (perhaps you could let them use half the rooms ). Failure to comply voluntarily would lead to prosecution, with the remedial action inevitably involving forced removal of control, fines and jailtime...

[trajan]

Well, as I understand it, you control the company through preferential shares. This is now to be seen as that, rather than technically being a "Thai" company, your holding company will be classed as "Alien". This means that you will be given 90-days to report and 1-year to correct, unless you can apply for an exclusion under the "Exclusion List (3)". Failure to gain an exclusion (unlikely, given that the land forms part of the National resources of Thailand) would require compliance - namely giving up 51% of the control of your property (perhaps you could let them use half the rooms ). Failure to comply voluntarily would lead to prosecution, with the remedial action inevitably involving forced removal of control, fines and jailtime...

sorry, but you are mixing-up the proposed changes to the Alien Business Law of 1999 (ABL) with the completely separate Land Law.

current proposed changes to the ABL

Under the current proposed changes to the ABL, a Thai company (which has 51% Thai shareholders and 49% foreign shareholders) which is controlled by foreigners (because of greater shareholder voting power), will be reclassified as an "alien" company and therefore will not be allowed to engage in any List 1,2 or 3 business activities (going forward)...

the one bright spot is that if you are suddenly transformed into an "alien" company and are currently engaged in List 3 business activities, you will be allowed to continue on with such business activities (under a grand-fathering exception) as long as you send in a notice and obtain a certificate....

BUT if you are currently engaged in List 1 or 2 business activities and are suddenly reclassified as an "alien" you can only continue on with such activities for 2 years (if you send in a notice and get a certificate)... before the 2 years are up, you will need to restructure the company (which will likely involve a fire-sale to Thai shareholders)...

separate Land Law

on a completely separate note, the Land Law has not been amended (yet)....therefore a Thai company (which has 51% Thai shareholders, but 49% foreign shareholders) which is controlled by foreign shareholders through greater shareholder voting rights, would still be able to own land as a Thai company.....

BUT it would not surprise me if the current military-installed government later moved to ALSO amend the Land Law and re-jig the definition of "alien" companies that hold land....and then require forced fire-sale divestment of such land by all newly defined "alien companies" in 1 or 2 years...this would really hit your average "joe" foreigner....not only Chambers of Commerce would complain...your average farang would also be hit very close to home...

let's just hope that the Constitution is drafted soon and elections are held so that some business rationality returns.....

[Rainmaker]

Well, as I understand it, you control the company through preferential shares. This is now to be seen as that, rather than technically being a "Thai" company, your holding company will be classed as "Alien". This means that you will be given 90-days to report and 1-year to correct, unless you can apply for an exclusion under the "Exclusion List (3)". Failure to gain an exclusion (unlikely, given that the land forms part of the National resources of Thailand) would require compliance - namely giving up 51% of the control of your property (perhaps you could let them use half the rooms ). Failure to comply voluntarily would lead to prosecution, with the remedial action inevitably involving forced removal of control, fines and jailtime...

sorry, but you are mixing-up the proposed changes to the Alien Business Law of 1999 (ABL) with the completely separate Land Law.

current proposed changes to the ABL

Under the current proposed changes to the ABL, a Thai company (which has 51% Thai shareholders and 49% foreign shareholders) which is controlled by foreigners (because of greater shareholder voting power), will be reclassified as an "alien" company and therefore will not be allowed to engage in any List 1,2 or 3 business activities (going forward)...

the one bright spot is that if you are suddenly transformed into an "alien" company and are currently engaged in List 3 business activities, you will be allowed to continue on with such business activities (under a grand-fathering exception) as long as you send in a notice and obtain a certificate....

BUT if you are currently engaged in List 1 or 2 business activities and are suddenly reclassified as an "alien" you can only continue on with such activities for 2 years (if you send in a notice and get a certificate)... before the 2 years are up, you will need to restructure the company (which will likely involve a fire-sale to Thai shareholders)...

separate Land Law

on a completely separate note, the Land Law has not been amended (yet)....therefore a Thai company (which has 51% Thai shareholders, but 49% foreign shareholders) which is controlled by foreign shareholders through greater shareholder voting rights, would still be able to own land as a Thai company.....

BUT it would not surprise me if the current military-installed government later moved to ALSO amend the Land Law and re-jig the definition of "alien" companies that hold land....and then require forced fire-sale divestment of such land by all newly defined "alien companies" in 1 or 2 years...this would really hit your average "joe" foreigner....not only Chambers of Commerce would complain...your average farang would also be hit very close to home...

let's just hope that the Constitution is drafted soon and elections are held so that some business rationality returns.....

Thanks Trajan, Ive been concern but your message has put me at ease.

Phew but understand under the current climate things can change.

Regards