I ask for a reaction from ‘Company Skeptics’

[Delight]

I found this on the net

A foreigner may use a Thailand-registered company to obtain property rights or land interest in Thailand.

To establish a Thai Limited company you will need three promoters, one of these three must be Thai.

A Thai Limited Company must have a Thai national holding 51% of the company in term of share holding, which means that foreigners can hold only 49%. but after 15 August 2006 the Thai government changed the rules for company registration. If the Thai limited company has a foreigner holding shares more than 39% or has a foreigner as director, the government will require additional documents, these include, Thai bank statements of all Thai nominee shareholders to prove that all Thai nominee shareholders have enough money to pay for said shares.

However, We can register your company with a nominee Thai director, in this instance the Thai nominee promoters ( shareholders) do not have to provide further documentation to show they have necessary funding to pay for said shares. Upon company formation the nominee Thai director can then be changed to yourself to allow you full control over your Thai limited company, The same can be done to allow you a holding of 39% shares.

To allow you further protection in the instance of a dispute with shareholders you will be afforded ordinary shares which allow you 1 vote per 1 share, while other share holders will be afforded preferred shares which allow them 10 shares to 1 vote. Which  means that you have voting majority therefore sole decision over your company.

My understanding about how a company was set up involved the foreigner having 49% share allocation. That has all changed it appears

My Q. Does this convince the ‘company skeptics’ that the fore mentioned methodology is legal and good to go.

If they still remain skeptical perhaps they could explain why.

Intellectual responses please –not emotional ones

 

 

[Peterw42]

You own less than half of a non-trading Thai company, and the company owns property. A company is an entity to conduct business, trade, pay tax etc, its not an entity to get around property ownership laws.

Its not legal, it just not illegal. Its a loop hole, using something other than its intended purpose.

 

If it gives you a nice feeling of security and you believe that you legally own Thai property then go ahead. Denile isnt a river in egypt

 

I could argue that a baseball cap is a motorbike helmet, there is no real definition as to what is a helmet in the Thai traffic rules. Doesn't mean its actually a legal helmet.

[KittenKong]

That quote reads like a lawyer promoting his services. As such I think it should be treated with suspicion.

 

I am particularly concerned about the use of the terms preference and ordinary. Preference shares, whilst usually carrying fewer voting rights, do generally benefit from a priority claim on dividends and assets. I dont think I would want some Thai nominee holding preference shares in a company whose only asset was my house.

 

And the idea of setting up a legal Thai company with Thai directors and then bypassing the law by switching directors seems to be barely legal at best. If Thais were any good at formulating laws they would surely have thought of that loophole.

 

But of course I do speak as a heavily biased person who would never want anyone in Thailand (regardless of nationality) to have any say in, or control of, any of my assets. I simply dont trust people here enough for that.

[CharlieH]

"I could argue that a baseball cap is a motorbike helmet, there is no real definition as to what is a helmet in the Thai traffic rules. Doesn't mean its actually a legal helmet."

 

Or will protect you if the preverbial hits the fan !!

[xylophone]

13 minutes ago, KittenKong said:

And the idea of setting up a legal Thai company with Thai directors and then bypassing the law by switching directors seems to be barely legal at best.

 

13 minutes ago, KittenKong said:

That quote reads like a lawyer promoting his services. As such I think it should be treated with suspicion.

Agree with your take on that and I note that at one time this sort of info could be found on some "lawyers" (property agent?) websites, but disappeared when they came to the attention of the Govt...…..then these claims were removed. This esp when new rules were brought in to stop this/these practises.

 

Can foreign individuals own land in Thailand?

 

ANSWER: Foreign land ownership can only be allowed pursuant to a treaty (section 86 of the Land Code Act, no treaty exists) or following section 96 bis of the Land Code Act. Both require permission of the Minister of Interior.

 

Can a Thai national own land on my behalf?

 

Answer No. It is illegal for foreigners to use a Thai person (juristic or natural) for this purpose and illegal for Thai nationals to act as an agent or owner on behalf of a foreigner, (section 96 of the Land Code Act). The Thailand Land Department even issued a warning in English on their website that this structure would be a criminal offence against the Criminal Code (section 267) and the Land Code Act (section 111).

 

Where can I find the law that prohibits foreign land ownership?

 

Answer The Land Code Act contains provisions governing foreign land ownership. Read more: CHAPTER 8 / หมวด ๘ - Limitation of Foreigners Right in Land / การกําหนดสทธิ ิในทดี่ ินของคนตางด  าว..

 

Can foreigners have other rights to land in Thailand?

 

Answer Foreigners can have possession of land or real estate under a with the land department registered lease agreement or obtain a right of usufruct. or have an interest in a Thai company that owns the land, however this last option is currently less popular because in general this structure as a vehicle to own real estate on behalf of a foreigner has some legal defects in its structure and purpose.

 

A company will be regarded as a “Thai” company and may own land in Thailand if no more than 49% of the total issued shares in the company are held by foreigners. However, even if foreigners own less than 49% of the total issued shares, by internal policy of the Land Office, officials may investigate the purchase transaction to make sure it is not an attempt to get around the prohibition against foreign land ownership.

 

Enforcement and punishment measures in land holding as an agent for a foreigner

(originally published by the Thailand Land Department)

If it appears the fact last that there is the threat of land holding as an agent for a foreigner, the measures to the land disposal and the offender punishment shall be enforced as follows (source land department);

1 - Measures on land by enforcement to dispose of the land in accordance with legal procedures.

Under Section 94 and 96 of the Land Code, stipulate the regulation when it appears that person who obtained the land as an agent for a foreigner or foreign entity or foreigner who obtained the land illegitimately, he/she shall dispose of such land in the portion of his/her possession within the period of time specified by the Director-General of the Department of Lands which shall be not less than one hundred eighty days and not more than one year. The Director-General shall have the power to dispose of such land if time limit elapses.

Foreign controlled Thai companies

Up till May 2006 it was common practice for foreigners to form a Thai company and to hold land under a Thai company structure. Since the land office guidelines starting in May 2006 followed by the business registration rules and the proposed amendments to the Foreign Business Act this practice is less common. Recent discussions in the Thai government to further clamp down on this structure through new laws and regulations have led to the conclusion that a Thai company structure is not a viable or secure vehicle to create a long term foreign controlling interest in real estate in Thailand. 

[ukrules]

Quick question, I see many villas (small detached houses) 'for sale' around Hua Hin.

 

One of my staff does some house cleaning work on a couple of these estates every now and again helping her cousin out so I get to hear the occasional story about which places are completely empty, where's busy, etc. This is the worst high season ever they say and that's based on there being entire estates of empty houses which are normally rented out by the month.

 

They appear to be mostly 'owned' by foreigners although there are some Thai landlords.

 

How do you own one of these ?

 

My next door neighbours 'own' their house and come here in the winter, I wonder how they own this place as they're both from Denmark and there's no Thais involved.

 

[baansgr]

Stick a noodle stall at the bottom of the driveway and call your company noodles tonight. Co.Th....job done

[rhodie]

You found it on the internet so it must be true!