Buying a new house with Thai girlfriend

[GalaxyMan]

We are buying a house on Koh Samui in a new development that is about half complete. The house and land are one price, 2.8m. My girlfriend wants to make sure that I have some legal rights with respect to everything. What can or do I need to do? I've seen a bit about usufruct and superficies, but really have no idea what they are all about. Sorry for the ignorance. And this is NOT a topic about trust between me and my girlfriend, I'm looking for technical information about ownership options, especially in light of the latest crackdown on dummy companies to hide ownership. Thanks.

Edited December 15, 2018 by GalaxyMan
mistake

[ezzra]

Word to the wise, unless you have formed a company that own the house where's your name appear as a major share holder you stand a chance to claim part ownership on the house when things will turn sour, ( like they do most of the times) otherwise, once the house is on the wife/GF name this is it, you have no rights what so ever...

[GalaxyMan]

4 minutes ago, ezzra said:

Word to the wise, unless you have formed a company that own the house where's your name appear as a major share holder you stand a chance to claim part ownership on the house when things will turn sour, ( like they do most of the times) otherwise, once the house is on the wife/GF name this is it, you have no rights what so ever...

This is the kind of information I'm looking for. I had thought of this, but was looking for some confirmation, maybe some details about how the process works. Thanks.

[ezzra]

27 minutes ago, GalaxyMan said:

This is the kind of information I'm looking for. I had thought of this, but was looking for some confirmation, maybe some details about how the process works. Thanks.

Do as many foreigners are doing when it comes to buying a house/land, set up a company where by you have equal shares and said company owns the property, you'll a lawyer to help you with all the formalities, if you're in Pattaya i can recommend you such person...

[GalaxyMan]

2 minutes ago, ezzra said:

Do as many foreigners are doing when it comes to buying a house/land, set up a company where by you have equal shares and said company owns the property, you'll a lawyer to help you with all the formalities, if you're in Pattaya i can recommend you such person...

I was under the impression that there needs to be a Thai partner who has to have a majority of the shares; more than 50%, in other words.

Edited December 15, 2018 by GalaxyMan

[Rimmer]

A troll post from the usual suspect has been removed

[lopburi3]

39 minutes ago, ezzra said:

Do as many foreigners are doing when it comes to buying a house/land, set up a company where by you have equal shares and said company owns the property, you'll a lawyer to help you with all the formalities, if you're in Pattaya i can recommend you such person...

IMHO one wave of the pen could make all such agreements null and void however - as any attempt to circumvent foreign ownership prohibition is illegal by law - setting up such a company for stated reason obviously is.  My advice would be it is probably better to just use the normal long lease methods (but do not claim to be any expert).  

Edited December 15, 2018 by lopburi3

[Langsuan Man]

1 hour ago, GalaxyMan said:

I was under the impression that there needs to be a Thai partner who has to have a majority of the shares; more than 50%, in other words.

Your impression is wrong.  It is called diluting shares so you insure that NO ONE PERSON has 50%.  The normal dilution would be four shareholders with 3 having 17% and you having 49%, thus insuring that you have a majority of voting shares and are made Chairman 

 

  

[NanLaew]

Used to be dead easy with the lawyer cobbling together a 'company' of disparate Thai people who would make up the Thai-held majority 51% while the largest single dilution would be the law-bending, loop-hole enlarging, farang 49%er. More recently, these sort of proxy foreign land ownerships have come under increasing scrutiny. I also hear that the Thai diluters also need to have evidence of paying their taxes which rules out the usual maid, lawyer's gardner and favorite noodle seller's brother-in-law being the shareholders.

 

IMHO, the usufruct is the much more acceptable way to go (for now). Since the OP isn't married, he can do this with his girlfriend as I understand one cannot set up a legal usufruct with your spouse.

[KittenKong]

1 hour ago, Langsuan Man said:

Your impression is wrong.  It is called diluting shares so you insure that NO ONE PERSON has 50%.  The normal dilution would be four shareholders with 3 having 17% and you having 49%, thus insuring that you have a majority of voting shares and are made Chairman

Last I heard 49% is not a majority, though maybe you are using a Thai lawyer's calculator. If those 3 Thai 17% shareholders vote against you, you may find yourself in a deep dark hole.

 

As far as I'm concerned the only answer to Thai companies, and indeed Thai businesses and partnerships generally, is to never get involved with them under any circumstances. I certainly cannot imagine any situation in which I would even consider it: nothing but downsides and unexpected costs.

[Mavideol]

3 hours ago, GalaxyMan said:

This is the kind of information I'm looking for. I had thought of this, but was looking for some confirmation, maybe some details about how the process works. Thanks.

you have to be company's share holder, appears you are foreigner, no more than 49% ownership in your name the rest belongs to Thai person but there are options.... should seek legal counsel and they should be able to explain all details to you, some time ago here in the forum there was mention of government hunting down such practices

[Mavideol]

1 hour ago, Langsuan Man said:

Your impression is wrong.  It is called diluting shares so you insure that NO ONE PERSON has 50%.  The normal dilution would be four shareholders with 3 having 17% and you having 49%, thus insuring that you have a majority of voting shares and are made Chairman 

 

  

what about if the 3 @ 17% are friends/colleagues/relatives/neighbors and so forth.... they still have 51% majority, it happen not long ago to one of my acquaintances....tuff luck hein???

[Sheryl]

Usufruct will ensure your access to and use of it and protect against sale to others

[Spidey]

6 minutes ago, Sheryl said:

Usufruct will ensure your access to and use of it and protect against sale to others

Can you explain what a usufruct is in a little more detail please?

[Odysseus123]

2 hours ago, Langsuan Man said:

Your impression is wrong.  It is called diluting shares so you insure that NO ONE PERSON has 50%.  The normal dilution would be four shareholders with 3 having 17% and you having 49%, thus insuring that you have a majority of voting shares and are made Chairman 

 

  

Would you buy a used car under such a provision?

 

Being appointed the chairman of your own jalopy would be such fun...

[baansgr]

You say "we are buying, " is she paying half? I would assume she is just as worried about her half

The true honest answer is as a Foreigner you have no rights to any property other than a freehold Condo in Foreign  quota. Any exotic, weird or unusual way to try and own property will involve Thais that have the upper hand always. Even if a court decides you are entitled  to half,  if the property  is sold or mortgaged to the hilt you stand no chance of getting  a penny back. Sorry to spoil your dream but that's the stark reality.

[NanLaew]

4 minutes ago, baansgr said:

The true honest answer is as a Foreigner you have no rights to any property other than a freehold Condo in Foreign  quota. ...

Absolutely 100% correct.

 

5 minutes ago, baansgr said:

Any exotic, weird or unusual way to try and own property will involve Thais that have the upper hand always.

Usufructs do have an exotic-sounding name but properly set up, they are robust, legal protections that do not give the Thai partner 'the upper hand' in any way at all. The old-school way of forming a company isn't exotic weird or unusual considering this is Thailand but their robustness under legal scrutiny is very questionable.

[watcharacters]

2 hours ago, Langsuan Man said:

Your impression is wrong.  It is called diluting shares so you insure that NO ONE PERSON has 50%.  The normal dilution would be four shareholders with 3 having 17% and you having 49%, thus insuring that you have a majority of voting shares and are made Chairman 

 

  

 

I don't see your post saying those three individual  shareholders must be Thai.

 

I wonder how successful the average falang is at having three Thai's as unquestingly loyal business partners?     Would in-laws show loyalty to the falang or the falang's partner?  Their  niece, daughter or ?

[dotpoom]

4 hours ago, ezzra said:

Word to the wise, unless you have formed a company that own the house where's your name appear as a major share holder you stand a chance to claim part ownership on the house when things will turn sour, ( like they do most of the times) otherwise, once the house is on the wife/GF name this is it, you have no rights what so ever...

Not quite right. I bought a condo in a Thai lady's name...then had myself added on to the Chanote as a 20 year Tennant. (I'm 69..so I reckon that is long enough 555). This means the condo cannot be sold without our two signatures (within the 20 yr. period).

  Reason for doing it this way?..I have bought and sold many properties during my 18 yrs. in Thailand but have finished with all that since the market slumped. This is my last purchase ..so to avoid complications with a "Will"...I decided to go this way. We are seperated now ..but I have no regrets ..we had 10 happy yrs. together and it's a nice feeling to be able to help somebody after ones death especially as she came from a very poor background and would never have accumulated enough to have property of her own. Now she has something to pass on to her children...which means so much to them.

  Good KARMA has looked after me...(she's worth more than me now 555).

Edited December 15, 2018 by dotpoom

[crazykopite]

There are some nice condos on Samui why not consider one of them and have it in your own name. Replay is one of them by Fisherman’s village . Just a thought

[CanuckThai]

Find your perfect place to lease/rent, with a contract duration and clauses that suits your needs.  You will never actually own it in Thailand anyways.  Move or abandon if neccessary...  Do the baht vs ego math...

[scorecard]

4 hours ago, GalaxyMan said:

This is the kind of information I'm looking for. I had thought of this, but was looking for some confirmation, maybe some details about how the process works. Thanks.

 

Here's another possibility to try for something a bit nearer to balance of ownership /interests / rights etc., but not a perfect answer.

 

It's legal and it is is done in Thailand, for the land to be in one name and the house in another name.

 

Example, the land sold to your wife and recorded on the land title document (the chanut) in your wife's name alone (cannot be directly in a foreigners name). 

 

And a separate contract for the building of the house in your name alone, and you recorded (alone) as the house owner, at the land titles office. 

 

You mentioned in your first post a combined price however maybe all of the above could be covered in 1 contract. And if needed personally I would push the developer to adjust their standard contract to accommodate the above if you wanted this arrangement, even if it meant bringing in another lawyer to just write the adjusted contact document. Shouldn't be to difficult. 

 

 

[mariohh1]

4 hours ago, GalaxyMan said:

I was under the impression that there needs to be a Thai partner who has to have a majority of the shares; more than 50%, in other words.

usufruct for life or 30 years is best but probably they dont do it in samui at least on phangan they dont. i have 5 usufructs in chiang mai no problem. in phangan i did it with 2 companies each company owns 50% of the other, since a LTD is seen as person and i own 49 % of each company and a thai owns 1% of each so nobody can screw you over and its legal but expensive.

[LomSak27]

5 hours ago, GalaxyMan said:

What can or do I need to do?

No!! Rent if you Must, but do not BUY!

 

Edited December 15, 2018 by LomSak27

[Spidey]

7 minutes ago, mariohh1 said:

usufruct for life or 30 years is best but probably they dont do it in samui at least on phangan they dont. i have 5 usufructs in chiang mai no problem.

I bought a house in Pattaya a few months ago. Had to complete in a real hurry. The previous owner had a 30 year usufruct but my lawyer (tosser) told me that they had ceased the practice 12 months earlier. I suspect that he said this to push me down the company route but I refused. Wondering if I can backfit the usufruct?

[mariohh1]

2 minutes ago, Spidey said:

I bought a house in Pattaya a few months ago. Had to complete in a real hurry. The previous owner had a 30 year usufruct but my lawyer (tosser) told me that they had ceased the practice 12 months earlier. I suspect that he said this to push me down the company route but I refused. Wondering if I can backfit the usufruct?

yes you can do the usufruct after if the thai agrees

 

 

[mariohh1]

Just now, mariohh1 said:

yes you can do the usufruct after if the thai agrees

 

 

or a normal 30 year lease its safe as well but with usufruct you can do for life thats why i like it better and i sold houses with it easy too. i do sell and own for 10 years without being married or having a thai GF.

[xylophone]

6 hours ago, GalaxyMan said:

I'm looking for technical information about ownership options, especially in light of the latest crackdown on dummy companies to hide ownership.

Well you have been given some good advice apart from the chicanery around company shareholdings, but this is Thai law, "forming a company whose sole purpose is to own property/land is illegal" no matter how you try to work around it.

 

A good point was made inasmuch as your Thai partner can buy/own the land whilst you can own the house, but the funds to buy that land should come from her.

 

I am not au fait with usufructs/superficies etc and folks on here who have knowledge and experience with these may be able to help, but not sure how many Thai lawyers will have the requisite knowledge either, so hunt around and please don't be pushed into the "company route" esp if the "company" has no other purpose than property/land ownership..........losing everything or the potential to do so is not a burden to be carried lightly.

[bubba45]

2 hours ago, Spidey said:

Can you explain what a usufruct is in a little more detail please?

 

What Is Usufructs?

A usufruct, in Thai language, called "Sidhi-kep-kin", provides temporary ownership rights for use and enjoyment of the property along with an advantage of being able to reap the profits from property belonging to another as long as the property is not damaged or altered in any way.

 

https://www.siam-legal.com/realestate/Usufructs.php

[scorecard]

6 hours ago, GalaxyMan said:

This is the kind of information I'm looking for. I had thought of this, but was looking for some confirmation, maybe some details about how the process works. Thanks.

 

You get a lawyer or an accountant to prepare some basic easy documents and take them to the Thai companies office (can actually be done on line) to register a Thai company.

 

NOTE: Some Thai and foreign lawyers will try to tell you it's required by Thai law to have a lawyer set it up. That's totally not true. Also lawyers will try to charge totally outrageous beyond belief fees for what's quite easy to do and doesn't need all that much time.

 

Many accountants and other business agencies do this set up, they are well capable and mostly at reasonable fees.

 

The basic scenario is:

 

- A group of Thai nationals (about 4 or 5 but that can change a bit) are recorded as together owning 51% or more of the shares in the company.

- The foreigner or a group of foreigners are recorded as owning 49% of the shares (the foreigner(s) cannot own more than 49 % of the shares).

 

Upon registration it is recorded in the company official records (this is called the articles of association of the company) that:

 

- The company only has one director

- The director is the only person who can sign any document / transact any business whatever for the company.

- It's also recorded at the same time that

- You are appointed as the director, or

- In some cases that's not possible at registration but it can be changed to you 1 year later or similar.

 

All of the above means that you don't have a controlling ownership picture but you do have control of the company finances, activities etc.

 

There are also requirements about capital at the start of the business, other TV members are more up to date on this point.

 

Once the above is all set up the land and house, or land only or house only can be recorded at the lands title office as being owned by the company.

 

The company must submit an annual company report to the Thai companies office and must also submit audited accounting records annually.

 

And yes several times in the last 10 years there has been mention of the government cracking down on these 'shell' companies, having then disbanded, stopping their initial set up etc., but it's a very floppy picture. 

 

Edited December 15, 2018 by scorecard