What are the penalties for starting a Thai company purely for property ownership?

[Tapster]

As the title says: your comments please.

[Salerno]

Potential to get done for fraud and saying goodbye to your money/property.

[uncleP]

You should work on the principal  of don't spend more than you can walk away from.

[thedemon]

1 hour ago, Salerno said:

Potential to get done for fraud and saying goodbye to your money/property.

 

Can you quote a single case where this has happened?

[Salerno]

35 minutes ago, thedemon said:

Can you quote a single case where this has happened?

 

What part of the title of the thread and my reply are you having trouble comprehending?

[Tapster]

Thank you for the comments so far.

 

I'm looking for a bit more detail:

 

Do they impound the house and your belongings?

Do they give you some time to sell up, or do you lose the house?

 

Do you go to jail?!!!

Does anyone have any experience of someone to whom any of these things have happened?

[Salerno]

2 minutes ago, Tapster said:

Does anyone have any experience of someone to whom any of these things have happened?

 

Don't know anybody personally nor can I remember reading anything about it happening. Every now and then there's reports the government is going to crack down on it ... but there's reports of them "going to do" a lot of things that quietly sink back into whatever brain fart it escaped from.

[xylophone]

8 minutes ago, Salerno said:

 

Don't know anybody personally nor can I remember reading anything about it happening. Every now and then there's reports the government is going to crack down on it ... but there's reports of them "going to do" a lot of things that quietly sink back into whatever brain fart it escaped from.

There were several threads on this a few years back and I don't know if they would be retrievable now, but some good info and some not so good info.

 

For a start you would have to be a 49% owner of the company only, so you don't actually own anything on your own right, with the other 51% being owned by a Thai person.

 

Thai law does specifically state that "nominee companies" and the like are illegal and I do have some documents on it somewhere and there have been cases of property being seized, in fact a friend of mine lost his villa here for exactly that reason.

 

I don't want to get into an argument with those folks who have managed to buy property by this circumventing route, because they believe they are right in what they have done, and the law says they aren't, and who am I to argue?

[Tapster]

@xylophone

Thank for the info!!!

 

????

 

I did a search before I asked this question, and could find nothing relevant. 

 

Property seized you say? That doesn't sound good. Are you able to pm me with anonymous details of the circumstances. That would be very helpful.

 

All the best

[Salerno]

7 minutes ago, xylophone said:

Thai law does specifically state that "nominee companies" and the like are illegal and I do have some documents on it somewhere and there have been cases of property being seized, in fact a friend of mine lost his villa here for exactly that reason.

 

That sucks. Figured there will have been some people falling foul of the law, just no personal experience. Not having money to burn not something I'd be willing to do given how easy it would be for someone <deleted> off for even a trivial reason to drop a dime on you.

[alianware]

Nothing is illegal. You set company so that you are able to rent it out to others and you pay tax for that. 

Foreigners who bought condo in his name are not allow to rent it out. Many farangs do it illegally. And don't pay tax for that. So if caught, you will be charged as tax invasion. So, in order to legally do that withouth no problem, you must set up a company. And pay yearly tax for that.

[Salerno]

Don't think we're talking about condos given owning a condo is perfectly legal (within the foreign owned quota). I believe we're talking about a house.

[soi3eddie]

A German "friend" of mine bought two houses and a truck in "his" company name at a resort town here. He's a 49% shareholder and is stuck outside LOS due to Covid and now his "ex" who is a 45% shareholder in the company is living in one property with her new boyfriend. She knows that she cannot be evicted even if the German came back to Thailand. The other property is empty. The other 6% shareholding is held by a lawyer/nominee. Even if buyer/s could be found for the propreties (totalling over 12 million Baht on purchase) the only way the German guy is going to get anything back is by taking a massive haircut to get himself out of the mess. Even though the ex signed resignation documents on formation of the company, she is holding the German to ransom unless she gets to keep property or gets a significant payoff. Be warned about going company route.

[Salerno]

  

7 minutes ago, Tapster said:

I did a search before I asked this question, and could find nothing relevant. 

 

If you want to kill some time there's a bunch of threads on TV.

 

You might also find this external article interesting.

 

[Grumpy one]

It looks like no one can give a clear answer so go ahead and invest your money

Then get back to us and tell how the police and the courts treat you  

[Tapster]

@Salerno

Thanks very much. Good Googling technique! I didn't know how to do that!!

I have already read the article you linked, but thanks for that as well.

 

????

[xylophone]

26 minutes ago, Tapster said:

@xylophone

Thank for the info!!!

 

????

 

I did a search before I asked this question, and could find nothing relevant. 

 

Property seized you say? That doesn't sound good. Are you able to pm me with anonymous details of the circumstances. That would be very helpful.

 

All the best

Yes, I will PM you with some details, as I have just gone to my other computer and on the files there I have government edicts with regards to foreigners owning land and property and setting up businesses to do so.

 

As I said, I don't want to post it here as it becomes an exasperating task, because so many people seem to have gotten away with certain things, they think it's legal, and as you will see from the government laws, it is a very tricky subject.

[Dagfinnur Traustason]

Quite easy! They will fix so that you do not have your property left, which means you will lose your money.

 

After that you will get a great deportation to pay for. Good idea!

[Tapster]

@Salerno

 

29 minutes ago, Salerno said:

 

That sucks. Figured there will have been some people falling foul of the law, just no personal experience. Not having money to burn not something I'd be willing to do given how easy it would be for someone <deleted> off for even a trivial reason to drop a dime on you.

 

You are quite right. This has happened to people. There are a lot of desperate and sad mofo's in Thailand.

[Oldie]

3 hours ago, Salerno said:

Don't think we're talking about condos given owning a condo is perfectly legal (within the foreign owned quota). I believe we're talking about a house.

Some Farangs use a company to buy condos that are in Thai name because often they are cheaper and easier to get. Then they rent them out. 

[thedemon]

6 hours ago, Salerno said:

 

What part of the title of the thread and my reply are you having trouble comprehending?

 

In other words, you can't.

[alianware]

10 hours ago, soi3eddie said:

A German "friend" of mine bought two houses and a truck in "his" company name at a resort town here. He's a 49% shareholder and is stuck outside LOS due to Covid and now his "ex" who is a 45% shareholder in the company is living in one property with her new boyfriend. She knows that she cannot be evicted even if the German came back to Thailand. The other property is empty. The other 6% shareholding is held by a lawyer/nominee. Even if buyer/s could be found for the propreties (totalling over 12 million Baht on purchase) the only way the German guy is going to get anything back is by taking a massive haircut to get himself out of the mess. Even though the ex signed resignation documents on formation of the company, she is holding the German to ransom unless she gets to keep property or gets a significant payoff. Be warned about going company route.

That could happen if you prepared your paper wrong since the first time.  Your partner or whoever have to signed the sell share holder document since first time before you even take her/his name to company. 

If you do it later, than that is your fault. 

[Susco]

11 hours ago, thedemon said:

13 hours ago, Salerno said:

Potential to get done for fraud and saying goodbye to your money/property.

 

Can you quote a single case where this has happened?

 

I recall there were cases on Samui, and they were covered in the news forrum

[jak2002003]

Op...don't buy a house here! There is no need. Just rent one. 

[LukKrueng]

17 hours ago, alianware said:

Nothing is illegal. You set company so that you are able to rent it out to others and you pay tax for that. 

Foreigners who bought condo in his name are not allow to rent it out. Many farangs do it illegally. And don't pay tax for that. So if caught, you will be charged as tax invasion. So, in order to legally do that withouth no problem, you must set up a company. And pay yearly tax for that.

That's not true. Anybody can rent out their property, just not on a daily/ weekly basis. Must be for a minimum of a month, or else you need a hotel permit. Paying/ not paying income tax on rentals is a deferent issue

[LukKrueng]

13 hours ago, Oldie said:

Some Farangs use a company to buy condos that are in Thai name because often they are cheaper and easier to get. Then they rent them out. 

Misconception of the foreigners quota. There is nothing in the condo units papers indicating "foreign" or "local" quota. A foreign owned unit can be sold to Thai and a Thai owned unit can be sold to foreigner.  There is no price deference just because it is owned by Thai or foreigner. 

Every time a foreigner buys a condo unit, the juristic person must calculate % of ownership to verify that at this point in time at least 51% of the building is Thai owned. The document stating this fact must be shown at the land office at time of transferring ownership to a non Thai buyer

[crazykopite]

There are 1,000s of farangs who have gone down this route. I would imagine most of those who make negative comment don’t even own a property . In 15 years of living in the Kingdom I have yet to hear of anyone losing there home by way of company ownership 

[scorecard]

18 hours ago, alianware said:

Nothing is illegal. You set company so that you are able to rent it out to others and you pay tax for that. 

Foreigners who bought condo in his name are not allow to rent it out. Many farangs do it illegally. And don't pay tax for that. So if caught, you will be charged as tax invasion. So, in order to legally do that withouth no problem, you must set up a company. And pay yearly tax for that.

 

Further point; I recall my lawyer talking on this 30+ years back.

 

He mentioned that there's one 'box' on the company registration form titled something like 'activity/purpose of the company'?

 

Lawyer continued 'the best answer is 'trading' because it's to some extent vague'.

 

He continued 'never answer this box with 'to buy a house' or 'manufacturing & marketing':

 

- To buy a house - a NO NO because obviously this could/would stir investigation because it's already known that this is illegal.

 

- Manufacturing & marketing - a NO NO because it could/would stir obvious specific questions 'manufacture exactly what', and 'where is the factory'? and ' exactly where are these products being sold'?

 

 

[nobodysfriend]

19 hours ago, Tapster said:

Thank you for the comments so far.

 

I'm looking for a bit more detail:

 

Do they impound the house and your belongings?

Do they give you some time to sell up, or do you lose the house?

 

Do you go to jail?!!!

Does anyone have any experience of someone to whom any of these things have happened?

 I do not know anybody to whom that happened .. but I know that setting up a Thai company with the sole intention of buying property in Thailand , is nothing more than a ' tolerated loophole ' .

It is not 100% legal , and , if they are not confiscating the company owned property  , ( I doubt that ) , they will still be able to impose fines or create other kinds of problems in the future .

As another poster said , If you do not have the right to legally own property in your name here , why not just rent ?

There are a lot of places up for rent , and it is becoming more and more ...

If you just want to enjoy your life without having to worry constantly about future developments , do not buy .

If you like and already found a nice place to live somewhere , you buy it by a Thai company , invest a lot of money , and then , later ,  you get new neighbors who make that you do not enjoy your  life anymore , it will be difficult to sell that property .

If you rent only , you can just move out and go on ... more freedom .

[Henryford]

Unless you can just walk away from your "investment" why would anyone willingly commit an illegal act in a foreign country where they have absolutely no rights. Just rent.