Buying a house that is registered to a company. What?

[ThomasThBKK]

1 hour ago, khunPer said:

Do you have any examples of people on Samui loosing their property because of this "structure"..?

Yeah they actually raided a whole "law office" because of dodgy nominee structures there:

 

Wasn't the first time tho: https://www.samuiforsale.com/real-estate/samui-nominee-shareholder-investigations.html

 

 

There are many many of these cases, most don't make it into the news.

When they caught that german running a hotel a  few weeks ago they also complained about his nominee structure: https://thethaiger.com/news/samui/raid-on-18-foreign-owned-koh-samui-hotels-owners-arrested

 

 

samui and pha ngan are extremely hot on this, my lawyer always has nice stories about those 2 special islands ????

 

 

Simple rule... Your shareholders should be well known to you, either friends, family or business partners and should have an actual interest in the company.

Also pay your taxes and do something, companies just holding land without doing anything are a nogo.

 

Not sure what happens if they investigate you and find misdoings, guess there's a chance to fix it either restructuring or selling the property. For sure going to get expensive tho...

[khunPer]

4 hours ago, ThomasThBKK said:

Yeah they actually raided a whole "law office" because of dodgy nominee structures there:

 

Wasn't the first time tho: https://www.samuiforsale.com/real-estate/samui-nominee-shareholder-investigations.html

 

 

There are many many of these cases, most don't make it into the news.

When they caught that german running a hotel a  few weeks ago they also complained about his nominee structure: https://thethaiger.com/news/samui/raid-on-18-foreign-owned-koh-samui-hotels-owners-arrested

 

 

samui and pha ngan are extremely hot on this, my lawyer always has nice stories about those 2 special islands ????

 

 

Simple rule... Your shareholders should be well known to you, either friends, family or business partners and should have an actual interest in the company.

Also pay your taxes and do something, companies just holding land without doing anything are a nogo.

 

Not sure what happens if they investigate you and find misdoings, guess there's a chance to fix it either restructuring or selling the property. For sure going to get expensive tho...

Yes, the authorities checked a Samui branch of DFDL, but we never heard about anybody in problems on the island because of using a Thai company limited as owner for a private home. So far the checks have been for larger projects using nominee shareholders, not for single homes, and that's what I ask examples for, because that is what this thread is about.

 

Nominee shareholders in small companies – for example names of employees in a law firm placed as shareholders, which were common practice until about a decade ago when setting up a company limited for property ownership – have been illegal for long time. If someone use nominee shareholders, or haven't changed their nominee shareholders in a old company, they could face problems. However, they don't loose property, but are given a time frame to bring things in order. Its typically the older company limiteds with seven shareholders, when the law changed to minimum three shareholders only, they began to check proof of funds for the Thai shareholders upon registration to eliminate nominees. 

 

The story with the German man – Kiran is his name, and he is well known to many of us on the island – has nothing to do with deed and owners, all his documents showed to be legal, and in good order, but he had no hotel-permission for renting out for shorter terms than one month, that was his problem. It has nothing to do with a company limited. Kiran thought that he had the hotel-permission cleared it by paying some money, the mentioned 800k baht, but the story is not crystal clear. The hotel permission problems is not only for him, but also for others, caused by local hotel, or resort, owners that feel they loose business to the growing popularity of villa rentals. Miskavan is another, and much bigger case.

 

Knowing the shareholders in a company limited has already been mentioned for OP...

–and OP replied here...

 

[ThomasThBKK]

8 hours ago, khunPer said:

Yes, the authorities checked a Samui branch of DFDL, but we never heard about anybody in problems on the island because of using a Thai company limited as owner for a private home. So far the checks have been for larger projects using nominee shareholders, not for single homes, and that's what I ask examples for, because that is what this thread is about.

 

Yes i am aware of cases, my lawyer mentioned them to me. I have no details tho, i can ask him if it's of interest to you tho?

 

 

Fact is, if they want to screw you for this, they easily can and that's all that matters. It all works until you piss off the wrong thai guy ????

And as it's all doable in a legit way there's no excuse not to do it legitimately.

There are such things as holding companies and preffered shares for a reason and it's dumb not to use these tools, and yes the holding co needs to pay taxes or it's a nogo.

There are loans possible if thai shareholders don't have the money for their part of the company...and yes you need evidence for these loans.

These investigations happened before and will happen regularly even tho there's not much to find about it publicly: https://www.mazars.co.th/Home/Doing-Business-in-Thailand/Legal/Investigation-of-Nominee-Shareholders

 

 

We are on the same page anyway, unlike the guy above who just selling random companies to other farrangs -.-

It's imo important to point this out as many are buying here carelessly and invest substantial sums, also having everything in order is important for a later sale as most professional buyers aren't dumb and do their due diligence nowadays

 

8 hours ago, khunPer said:

Knowing the shareholders in a company limited has already been mentioned for OP...

Yes it has but no he should not just change the shareholders in the old company, he should bite into the sour apple and transfer everything to a new and correct setup.

It's unlikely that the original sharecapital has been paid upon at the begining of the current land holding company - and these birthdefects cannot be easily fixed, they are a redflag in there and just changing the names won't get rid of it afaik.

 

The special business taxes etc should be paid by the current owner as he's the one selling the land, transfer fees etc can be shared and it's prolly not even a huge amount of money to get rid of this issue.

 

 

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However, they don't loose property, but are given a time frame to bring things in order.

 

 

I was personally threatened that my company gets shut down and our land confiscated as the chap in landoffice didn't want to believe that i am not married to the girl who's a shareholder. They literally just made that shit up. (Our shares would count together and be divided by 2 and then i would have had over 49%).

 

By law they can FORCE SHUTDOWN the company and have you selloff the assets - and that would prolly result in a hefty loss financially. There are also hefty fines possible for nominee structure including prison. They don't need to give you time to fix it - they are just beeing nice if they do, but who knows how long they will continue to be nice?

[FritsSikkink]

On ‎6‎/‎3‎/‎2019 at 1:58 PM, TTSIssues said:

he actually just bought the company and thus owned the house as well. Very straightforward 

Not really, he owns the company and the company owns the house. 

He can't sell the house, he can sell the company including the house.

If the company sells the house it will need to pay tax on the profits.

[ThomasThBKK]

4 minutes ago, FritsSikkink said:

Not really, he owns the company and the company owns the house. 

He can't sell the house, he can sell the company including the house.

If the company sells the house it will need to pay tax on the profits.

https://www.cbre.co.th/media/service_sub_lang_file/124/PropertyTax.pdf

 

Good overview

[khunPer]

7 hours ago, ThomasThBKK said:

7 hours ago, FritsSikkink said:

Not really, he owns the company and the company owns the house. 

He can't sell the house, he can sell the company including the house.

If the company sells the house it will need to pay tax on the profits.

https://www.cbre.co.th/media/service_sub_lang_file/124/PropertyTax.pdf

 

Good overview

But...

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The general tax rates (excluding company or individual personal tax which may also apply eventually) are shown below.

 

[Langsuan Man]

In all my years in Thailand and following purchases via the company route the only documented case of the Thai authorities seizing a property in a company name was a few year back in Phuket

 

The Hells Angels Motorcycle club purchased a piece of property in a company name and built a house to used as their clubhouse / headquarters.  The authorities were able to take control of the property because if violated the zoning, not due to company structure and because of other criminal charges against the MC

[khunPer]

7 hours ago, ThomasThBKK said:

Yes i am aware of cases, my lawyer mentioned them to me. I have no details tho, i can ask him if it's of interest to you tho?

Yes, thanks, real cases are of interest, and probably also for numerous other forum-readers than me.

 

There are lots of laws in Thailand for almost everything, many rarely, or seldom, used.

 

What you say is correct, and that's why OP was advised to...

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Land & house owned by a company is in principle illegal, if its a so-called shell-company in cover of foreign ownership, with Thai nominee shareholders. You will need a due diligence for both land title deed, and company, before buying an already established company, which mean you'll need experienced solicitor assistance.

 

I don't know if you still can, but you could bring the old style shell companies into acceptabel condition some years ago, when the law changed, by getting rid of eventually nominee shareholders, and make sure all shareholder's capital was actually paid into the company (other assets as share value might not work).

 

If a seller is selling a company, including the company's assets of land & house, the price might be based on a combination of market price and avoided taxation. Selling the land & house asset only, might trigger more tax than the 3.3 % business tax at the land office, as also the company – or shareholders – will likely show a profit, and need to be closed to let the shareholders legally withdraw their share value. It could be a different sales price without buying the company. Transfer from one company to another might also require a limit of 39 % foreign ownership in some land offices.

 

Many, if not lots, of land & house are sold as companies, and if everything has been done "after the book", it works well.

 

I agree in what you have mentioned of precautions – and there are actually more one can do, if one wish to be on a safer side with one's "investment" – and I know that many of the law firms where I live, don't make shell companies (anymore); clients need them-self to find shareholders with proof of funds.

 

Thanks for constructive comments.

????

[ThomasThBKK]

On 6/9/2019 at 9:12 PM, khunPer said:

I don't know if you still can, but you could bring the old style shell companies into acceptabel condition some years ago, when the law changed, by getting rid of eventually nominee shareholders, and make sure all shareholder's capital was actually paid into the company (other assets as share value might not work).

Yes you can still but its a pain in the ass if it's not your own company as you don't have any idea what has been done before.

That burden should not be on you as the buyer, i would demand a hefty discount if that's the case - but thai logic and farrang in thailand logic might prohibit that from happening.