Thai Share holders

[mikebell]

A couple of years back I had a messy break-up with my Thai wife.  I 'owned' my house via the company route. She was a 48% shareholder, I was the other at 49% & a 3rd from the Audit office had 3%.  Eventually I was forced to sell to my wife's daughter naturally at a knockdown price.  Yesterday I received a police summons for not auditing my company even tho' I have not lived in my house for 3 years.  The house is rented out to a farang.  None of my post has ever been forwarded so I was unaware that the company still existed & would need an annual audit until it is sold/wound up.

The shareholders were changed 2 years ago without my knowledge or consent so my ex-wife was 50% & I was 49.  Now the Audit company want two years' worth of audit 20K + late penalties 20K + 25K to wind up the company.

My question of wise ones is am I responsible for the whole sum or do the other shareholders have some responsibility - does my ex-wife owe 50% of the above totals?

[Mavideol]

never trust a ex wife..... you may be at fault and will have to cover the charges, always foreigners fault, better lawyer up and good luck

[Susco]

 

34 minutes ago, mikebell said:

None of my post has ever been forwarded so I was unaware that the company still existed & would need an annual audit until it is sold/wound up.

 

Since the letter was sent to you, mean that you were the director of the company, and you should know if it was still active or not.

 

The company has to pay all the costs, and since you are the director, that is you.

 

How they could change shareholders without your signature as director?

 

Edited December 14, 2020 by Susco

[mark5335]

The responsibility for the annual audit and statutory filings rest with the Directors, not shareholders. I think you should simply ignore the summons. (Since the shareholders were changed 2 years ago without your knowledge or consent it would seem that your ex may have forged your signature on the share transfer?)

[mikebell]

A couple of points not made clear in my 1st post.

'Since the letter was sent to you'  I received the summons by hand from a 3rd party. 

'Your ex may have forged your signature on the share transfer?' Every year at audit time I sign about 46 pages of writing all in Thai.  One year I must have signed 47 agreeing to the new shareholding. Trust is an unfortunate flaw.

My question is, if I am now a minority shareholder (49%) am I responsible for 100% of costs?

[Delight]

 A Thai company is set up to facilitate a foreigner having control of the house.

As part of the arrangement the foreigner will be the M.D and control 100% of the voting rights.

With that arrangement in place it is legally impossible for the share allocation to be changed without your permission.

 

 

The incentive for carrying out an audit is to have a 'clean' company when it's time to sell.

 

Clearly something has occurred  of an illegal nature.

Taking your wife to court will be a road to nowhere.

How did the Audit company get involved.Typically they only respond to a request for their services.

 

Why are the police involved? Police  do not deal with Civil Law.

 

I think that this is a set up.

 

That said if you sell a house formerly in a Thai company to a Thai person-the company still exists and needs to be closed down. This still has to be done .

The 25 K to close the company is quite cheap-very cheap.

Suspect that 2 audits have never been carried out.

I would just try to have the company closed down for 25K.

That will end the matter.

 

 

Edited December 17, 2020 by Delight
added detail

[mikebell]

10 hours ago, Delight said:

 A Thai company is set up to facilitate a foreigner having control of the house.

As part of the arrangement the foreigner will be the M.D and control 100% of the voting rights.

With that arrangement in place it is legally impossible for the share allocation to be changed without your permission.

 

 

The incentive for carrying out an audit is to have a 'clean' company when it's time to sell.

 

Clearly something has occurred  of an illegal nature.

Taking your wife to court will be a road to nowhere.

How did the Audit company get involved.Typically they only respond to a request for their services.

 

Why are the police involved? Police  do not deal with Civil Law.

 

I think that this is a set up.

 

That said if you sell a house formerly in a Thai company to a Thai person-the company still exists and needs to be closed down. This still has to be done .

The 25 K to close the company is quite cheap-very cheap.

Suspect that 2 audits have never been carried out.

I would just try to have the company closed down for 25K.

That will end the matter.

 

 

Thanks for your response. I am 100% sure something illegal occurred; at audit time, I go in & sign 46 pages (all in Thai).  One year I signed 47 which changed the shareholders - my wife went to 50 + an unknown (to me) woman in the audit office became  1%.  I did go to court (costing a lot of money!) & you are right it didn't do me any good & I was forced to sell my house to my wife at 25% of its worth.

I was so relieved to finally be free of this emotional burden that I didn't close the company.  I received a police summons as they wished to interview me regarding non-payment of various taxes from the previous year.

'How did the Audit company get involved. Typically they only respond to a request for their services.' They send tax returns annually & mine showed non-payment.  I am attempting to close the company with the crooked Audit company which might explain the cheap price?

[Delight]

1 hour ago, mikebell said:

Thanks for your response. I am 100% sure something illegal occurred; at audit time, I go in & sign 46 pages (all in Thai).  One year I signed 47 which changed the shareholders - my wife went to 50 + an unknown (to me) woman in the audit office became  1%.  I did go to court (costing a lot of money!) & you are right it didn't do me any good & I was forced to sell my house to my wife at 25% of its worth.

I was so relieved to finally be free of this emotional burden that I didn't close the company.  I received a police summons as they wished to interview me regarding non-payment of various taxes from the previous year.

'How did the Audit company get involved. Typically they only respond to a request for their services.' They send tax returns annually & mine showed non-payment.  I am attempting to close the company with the crooked Audit company which might explain the cheap price?

 One problem here -it seems to me -is that you are been dragged into action. You are not driving the action.

I assume that you still have all the voting rights. This means that you (in theory) have all the power and all the responsibility.You are still MD. Given this your ex -wife having 50% of the shares provides no power for her. Voting rights count.

One further thought was why did the audit company  carry out the 2nd audit -when they had not been paid for the 1st-it makes no sense.

Anyway -good luck for the future . The hope is to rid yourself of this terrible episode in your life.

 

[timendres]

12 hours ago, Delight said:

Why are the police involved? Police  do not deal with Civil Law.

 

In Thailand, regardless of the court action, the police are the ones who will deliver the summons or the warrant. Even for a civil matter.

[mikebell]

20 hours ago, Delight said:

Anyway -good luck for the future . The hope is to rid yourself of this terrible episode in your life.

Thank you Delight. I have had a lovely trouble-free couple of years without house/wife then this bombshell explodes in my face.  I am a UK pensioner (78) so my state pension is £360 a month (frozen for 13 years!)  I reckon this mess will cost me over £2000 to finally extricate myself.  I am forced to rent now which is further whittling down my savings.  It is a salutary lesson to people thinking forming a company is the way to go.  The lawyers who set up the company admitted at the end of the day it is a scam & all shareholders face jail/fines if taken to its conclusion.

Thailand hails ex-pats as heroes yet will not let them own their own homes.

[Delight]

4 hours ago, mikebell said:

Thank you Delight. I have had a lovely trouble-free couple of years without house/wife then this bombshell explodes in my face.  I am a UK pensioner (78) so my state pension is £360 a month (frozen for 13 years!)  I reckon this mess will cost me over £2000 to finally extricate myself.  I am forced to rent now which is further whittling down my savings.  It is a salutary lesson to people thinking forming a company is the way to go.  The lawyers who set up the company admitted at the end of the day it is a scam & all shareholders face jail/fines if taken to its conclusion.

Thailand hails ex-pats as heroes yet will not let them own their own homes.

 In all fairness -I think that the root cause of your problems were:

1 The failure of your marriage.

2 Your lack of understanding pertaining to all aspects of the company route for house purchase.

Suspect that you are not alone with ref. No.2

 

I am not aware of any foreigner who is serving jail time -with respect to this issue.

Would I personally buy a property if it was not in my name-NO!

I am simply not brave enough.

[xylophone]

4 hours ago, mikebell said:

Thank you Delight. I have had a lovely trouble-free couple of years without house/wife then this bombshell explodes in my face.  I am a UK pensioner (78) so my state pension is £360 a month (frozen for 13 years!)  I reckon this mess will cost me over £2000 to finally extricate myself.  I am forced to rent now which is further whittling down my savings.  It is a salutary lesson to people thinking forming a company is the way to go.  The lawyers who set up the company admitted at the end of the day it is a scam & all shareholders face jail/fines if taken to its conclusion.

Thailand hails ex-pats as heroes yet will not let them own their own homes.

So sorry to hear about your problems Mike, and I had a friend here who has had similar problems (although not to do with the winding up of the company) and have heard of a few others.

 

And I have commented before on a few threads about farangs setting up a company through which to buy a house (and obviously the land upon which it stands) and how it is illegal and the Thai law clearly states this, however there are lawyers/accountants who will find a supposed loophole in the law and will gladly take fees to set it up.

 

The last part of your post..."It is a salutary lesson to people thinking forming a company is the way to go.  The lawyers who set up the company admitted at the end of the day it is a scam & all shareholders face jail/fines if taken to its conclusion", should be read by all folks wanting to go down this route, however you will still find posters on TV who will say that they have bought "legally" and nothing, not even posting the relevant section of the Thai law about it, will persuade them otherwise.

 

I hope you manage to come out of this episode, financially and personally trouble-free

[Delight]

1 hour ago, xylophone said:

 

 

The last part of your post..."It is a salutary lesson to people thinking forming a company is the way to go.  The lawyers who set up the company admitted at the end of the day it is a scam & all shareholders face jail/fines if taken to its conclusion", should be read by all folks wanting to go down this route, however you will still find posters on TV who will say that they have bought "legally" and nothing, not even posting the relevant section of the Thai law about it, will persuade them otherwise.

 Just a Q. (somewhat off topic.) Is the setting up of a company to control a house somehow different from setting up a company to control a condo. I refer to the legality of the process.

 

[xylophone]

11 minutes ago, Delight said:

 Just a Q. (somewhat off topic.) Is the setting up of a company to control a house somehow different from setting up a company to control a condo. I refer to the legality of the process.

 

The setting up of sham companies, that is, companies that don't do anything other than "look after" the property is illegal, although many lawyers will set them up for an unwitting farang, and there are many such structures already out there.

 

So the sham structure in itself is illegal, and if it is used not only to "control" a house, but also the land upon which the house stands, then you fall foul of the law on two fronts, one being the setting up of a sham company and the other being the supposedly "owner" of Thai land, which is illegal for a foreigner.

 

The heading of this thread talks about "Thai shareholders" and the government also issued an edict that it will be clamping down on the sham structure/nominee structure which includes supposed Thai shareholders (shareholders in name only, usually nominated by the lawyer or similar, who do absolutely nothing at all with regards to the running of the company) and delving into financial history to see how much money was invested by these so-called shareholders, which will often be nothing at all, and if that is the case, the government is able to take action against the company/shareholders/owners (including the farangs) which could entail losing the property.

 

You would normally not need to set up a company to control a condo, because condos can be purchased by farangs, provided they are in the percentage allocated to farang ownership, by the condominium structure.

 

I will post a couple of links/articles for you to peruse.......see below:-

 

"Virtually every farang I know who owns property here in Phuket took that route of opening a company to buy land and have a house built and using Thai nominee's if the powers that be investigated that area alone, the property market would come crashing down, if it isn't bad enough now".

I was a property lawyer here (not Xylophone) before and that setup was just standard. But using nominees to  buy land is even more in contravention of Thai law than the nominee situation for running a business. Not only is it illegal to use nominees to run a Thai company for business purposes, it is also illegal for aliens (yes thats what we are) to own land ...whatever the scheme whether by way of company with nominees or possibly also buying in a Thai nationals name or 30 plus plus leases all of which are designed to circumvent the spirit of the law and therefore a court could make any such scheme null and void.  

Articles on foreign ownership in Thailand………..

A). This from the Land Department Minister (office of)...........
 
"If it is appears that the company is having foreigner as shareholder or Director or if there is a reason to believe that it is nominating the Thais to hold shares for the foreigners, the officer is to investigate income of every Thai shareholders in the legal entity by looking into their work history of what kind of work they have done and what monthly salary they earned, all of these proved by evidence.
 
If the purchased is funded by loan, then loan evidence must be provided. If after the investigation, it is led to believe that the application for land ownership is circumventing the law or any individual is purchasing land to the benefit of foreigners under the Land Act 74, paragraph 2, the officer is to investigate the case in detail and report to the Land Bureau to be waiting for further advise from the Minister".
 
Some more info... http://www.thailaws....business_42.htm  

 

B). Link to an article in the Telegraph....
 
"Expats who own land illegally in Thailand could be deported under tough new laws being drafted by the government.

Thai ombudsman Siracha Charoenpanij said earlier this month that he was drawing up "carrot-and-stick" legislation to protect the country from illegal foreign nominee ownership.

 

Under Thai laws, foreign nationals are not allowed to own residential land. They can, however, buy apartments so long as no more than 49 per cent of a development is owned by foreigners. They can also purchase detached villas, but while they can own the house, they cannot own the land the house is on and are only able to lease it for 30 years at a time.

 

To get around these restrictions, some have entered into complicated structures whereby a company is set up to purchase the land. A Thai national holds the majority of shares in that company, but in reality may have no financial interest in the company and may own it on behalf of the foreign buyer.

 

It is these such "nominee ownership" arrangements that the government now wants to crack down on, and Charoenpanij has also proposed a reward – of 20 per cent of the land’s value when sold – for those providing information about illegal ownership. His plans also include penalties for lawyers or consultants who advise foreign buyers on nominee structures".

 

C). 1). Unquestionably it is illegal to buy a house via a company. 
 
 The Thailand Alien Business act is quite specific, and there is a blanket offence of circumventing land ownership laws that means anything that appears to allow foreigners to own houses is actually illegal.
 
2). Be careful here because it is illegal for a company to be formed with the sole purpose of owning a property. If the company is a trading/working entity employing Thai workers, paying taxes etc then a house can be purchased, but then again the company has to also have a majority Thai ownership and these majority Thai shareholders must be able to show how much they have invested in this company and from whence the funds came.

 

This is to prevent the “Thai nominee company” illegal workaround and nominee companies are illegal..

.

http://www.thailand-lawyer.com/land_purchase.html 

http://www.telegraph.co.uk/finance/personalfinance/expat-money/9413075/Expats-warned-of-illegal-home-crackdown-in-Thailand.html 

http://www.thailandlawonline.com/66-real-estate-legal-issues/14-can-a-thai-company-be-my-nominee-for-land-acquisition 

http://www.thailandlawonline.com/article-older-archive/foreign-business-nominee-company-shareholder 

 

[Delight]

22 minutes ago, xylophone said:

The setting up of sham companies, that is, companies that don't do anything other than "look after" the property is illegal, although many lawyers will set them up for an unwitting farang, and there are many such structures already out there.

 

So the sham structure in itself is illegal, and if it is used not only to "control" a house, but also the land upon which the house stands, then you fall foul of the law on two fronts, one being the setting up of a sham company and the other being the supposedly "owner" of Thai land, which is illegal for a foreigner.

 

The heading of this thread talks about "Thai shareholders" and the government also issued an edict that it will be clamping down on the sham structure/nominee structure which includes supposed Thai shareholders (shareholders in name only, usually nominated by the lawyer or similar, who do absolutely nothing at all with regards to the running of the company) and delving into financial history to see how much money was invested by these so-called shareholders, which will often be nothing at all, and if that is the case, the government is able to take action against the company/shareholders/owners (including the farangs) which could entail losing the property.

 

You would normally not need to set up a company to control a condo, because condos can be purchased by farangs, provided they are in the percentage allocated to farang ownership, by the condominium structure.

 

I will post a couple of links/articles for you to peruse.......see below:-

 

"Virtually every farang I know who owns property here in Phuket took that route of opening a company to buy land and have a house built and using Thai nominee's if the powers that be investigated that area alone, the property market would come crashing down, if it isn't bad enough now".

I was a property lawyer here (not Xylophone) before and that setup was just standard. But using nominees to  buy land is even more in contravention of Thai law than the nominee situation for running a business. Not only is it illegal to use nominees to run a Thai company for business purposes, it is also illegal for aliens (yes thats what we are) to own land ...whatever the scheme whether by way of company with nominees or possibly also buying in a Thai nationals name or 30 plus plus leases all of which are designed to circumvent the spirit of the law and therefore a court could make any such scheme null and void.  

Articles on foreign ownership in Thailand………..

A). This from the Land Department Minister (office of)...........
 
"If it is appears that the company is having foreigner as shareholder or Director or if there is a reason to believe that it is nominating the Thais to hold shares for the foreigners, the officer is to investigate income of every Thai shareholders in the legal entity by looking into their work history of what kind of work they have done and what monthly salary they earned, all of these proved by evidence.
 
If the purchased is funded by loan, then loan evidence must be provided. If after the investigation, it is led to believe that the application for land ownership is circumventing the law or any individual is purchasing land to the benefit of foreigners under the Land Act 74, paragraph 2, the officer is to investigate the case in detail and report to the Land Bureau to be waiting for further advise from the Minister".
 
Some more info... http://www.thailaws....business_42.htm  

 

B). Link to an article in the Telegraph....
 
"Expats who own land illegally in Thailand could be deported under tough new laws being drafted by the government.

Thai ombudsman Siracha Charoenpanij said earlier this month that he was drawing up "carrot-and-stick" legislation to protect the country from illegal foreign nominee ownership.

 

Under Thai laws, foreign nationals are not allowed to own residential land. They can, however, buy apartments so long as no more than 49 per cent of a development is owned by foreigners. They can also purchase detached villas, but while they can own the house, they cannot own the land the house is on and are only able to lease it for 30 years at a time.

 

To get around these restrictions, some have entered into complicated structures whereby a company is set up to purchase the land. A Thai national holds the majority of shares in that company, but in reality may have no financial interest in the company and may own it on behalf of the foreign buyer.

 

It is these such "nominee ownership" arrangements that the government now wants to crack down on, and Charoenpanij has also proposed a reward – of 20 per cent of the land’s value when sold – for those providing information about illegal ownership. His plans also include penalties for lawyers or consultants who advise foreign buyers on nominee structures".

 

C). 1). Unquestionably it is illegal to buy a house via a company. 
 
 The Thailand Alien Business act is quite specific, and there is a blanket offence of circumventing land ownership laws that means anything that appears to allow foreigners to own houses is actually illegal.
 
2). Be careful here because it is illegal for a company to be formed with the sole purpose of owning a property. If the company is a trading/working entity employing Thai workers, paying taxes etc then a house can be purchased, but then again the company has to also have a majority Thai ownership and these majority Thai shareholders must be able to show how much they have invested in this company and from whence the funds came.

 

This is to prevent the “Thai nominee company” illegal workaround and nominee companies are illegal..

.

http://www.thailand-lawyer.com/land_purchase.html 

http://www.telegraph.co.uk/finance/personalfinance/expat-money/9413075/Expats-warned-of-illegal-home-crackdown-in-Thailand.html 

http://www.thailandlawonline.com/66-real-estate-legal-issues/14-can-a-thai-company-be-my-nominee-for-land-acquisition 

http://www.thailandlawonline.com/article-older-archive/foreign-business-nominee-company-shareholder 

 

 A long winded answer -which failed to answer my Q.

If the use of a company is illegal for both house purchases and condo purchases and the Thai authorities decide to pursue this illegality with determination-then the  building of new condos will die .

 

That they will never allow.

 

What they actually do is huff and puff -then do nothing.

To my  certain knowledge this action by Thai authorities has been going since 2006 -post the 2006 coup.

So what has effectively happened /changed during the past 14 years, Nothing. It will be the same for the next 14 years and for the 14 years after that.

The huffing and puffing does please Thai people-however.

The surprising thing is in spite of all this illegality -the land office accept the existence of these companies -companies that allow foreigners to control property.

If the Thai authorities were serious they would stop it at the land office-so easy.

The  lack of action speaks volumes about their motives.

[xylophone]

3 minutes ago, Delight said:

 A long winded answer -which failed to answer my Q.

If the use of a company is illegal for both house purchases and condo purchases and the Thai authorities decide to pursue this illegality with determination-then the  building of new condos will die .

 

That they will never allow.

 

What they actually do is huff and puff -then do nothing.

To my  certain knowledge this action by Thai authorities has been going since 2006 -post the 2006 coup.

So what has effectively happened /changed during the past 14 years, Nothing. It will be the same for the next 14 years and for the 14 years after that.

The huffing and puffing does please Thai people-however.

The surprising thing is in spite of all this illegality -the land office accept the existence of these companies -companies that allow foreigners to control property.

If the Thai authorities were serious they would stop it at the land office-so easy.

The  lack of action speaks volumes about their motives.

Your question was:- Just a Q. (somewhat off topic.) Is the setting up of a company to control a house somehow different from setting up a company to control a condo. I refer to the legality of the process.

 

Your question was answered, in as much as the setting up of a sham company (a company with Thai nominees which doesn't do anything) is illegal.

 

And you don't need to set up a company to own a condo.

 

The rest of my post contained quotes from the Thai government and Thai lawyers, i.e. Thai law.

 

So what did you do, you ignored all that and decided to go off on your own tangent and take your own view.

 

Do what you want, but as I have quoted from the Thai government itself, certain things are illegal and if you wish to circumvent them, then you face the consequences.....and for the record, they do happen, as happened to a good friend of mine here. 

 

Why ask when you get the answer you don't want to hear, then disregard it?

 

 

 

[Delight]

36 minutes ago, xylophone said:

Your question was:- Just a Q. (somewhat off topic.) Is the setting up of a company to control a house somehow different from setting up a company to control a condo. I refer to the legality of the process.

 

Your question was answered, in as much as the setting up of a sham company (a company with Thai nominees which doesn't do anything) is illegal.

 

And you don't need to set up a company to own a condo.

 

The rest of my post contained quotes from the Thai government and Thai lawyers, i.e. Thai law.

 

So what did you do, you ignored all that and decided to go off on your own tangent and take your own view.

 

Do what you want, but as I have quoted from the Thai government itself, certain things are illegal and if you wish to circumvent them, then you face the consequences.....and for the record, they do happen, as happened to a good friend of mine here. 

 

Why ask when you get the answer you don't want to hear, then disregard it?

 

 

 

My question was simple. Is there a difference between companies set up for houses and companies set up for condos?

A simple YES or NO would do. 

Instead you post diatribe about a question that I did not ask.

Strange what you say about condos. 51 % of the condos in my building (as a % of  total living area) are in Thai companies.Companies controlled by foreigners. 49% are foreign owned . 

I don't sense any panic from these owners.

Suspect that they do not listen to merchants of doom -like you

[xylophone]

1 hour ago, Delight said:

Suspect that they do not listen to merchants of doom -like you

Just quoting Thai law........up to you/them how you interpret it, and being ignorant of the law is no excuse, but some folks like you seem to enjoy it!!

 

Perhaps you should read your question again, as you did ask, "I refer to the legality of the process" so now you know.

 

Maybe another real estate spruiker, so bye bye..........now on ignore, so I won't have to read your ramblings any more.

 

Edited December 19, 2020 by xylophone

[Delight]

56 minutes ago, xylophone said:

Just quoting Thai law........up to you/them how you interpret it, and being ignorant of the law is no excuse, but some folks like you seem to enjoy it!!

 

 

 I am a person who is intellectually curious.

Accepting what you say about the Thai Law-then why do the Thai Authorities    not clamp  down ?

It is being blatantly flouted. This is certainly the case.

That part stimulates my curiosity.

 

 

[Susco]

8 minutes ago, Delight said:

Accepting what you say about the Thai Law-then why do the Thai Authorities    not clamp  down ?

Probably for similar reasons that they don't clamp down on massive corruption schemes, traffic light offenders, prostitution in Thailand etc.

[Susco]

3 hours ago, Delight said:

My question was simple. Is there a difference between companies set up for houses and companies set up for condos?

A simple YES or NO would do. 

Instead you post diatribe about a question that I did not ask.

Strange what you say about condos. 51 % of the condos in my building (as a % of  total living area) are in Thai companies.Companies controlled by foreigners. 49% are foreign owned . 

I don't sense any panic from these owners.

 

No there is no difference between those companies, both are used to surpass the laws, which say that a company can own a real estate property if they do real business.

 

Of course the foreign owners don't panic, because they were told it is all above board.

 

The foreigner caught in Samui recently, and several others that have been taken down in recent years, didn't panic either, until the day that knock on the door happened.

[Delight]

2 hours ago, Susco said:

 

No there is no difference between those companies, both are used to surpass the laws, which say that a company can own a real estate property if they do real business.

 

Of course the foreign owners don't panic, because they were told it is all above board.

 

The foreigner caught in Samui recently, and several others that have been taken down in recent years, didn't panic either, until the day that knock on the door happened.

This illustrates how the law is used in practice.

If a foreigner misbehaves -they can use the law to get rid of this  foreigner .

 

 

Most foreigners do not -in the main -misbehave.

They just spend money.

 

So the Thai authorities get the GDP benefit whilst maintaining the stick .

They can use this stick when circumstances demand.

Very rarely -I suspect.

Useful law.

[xylophone]

19 hours ago, Delight said:

If a foreigner misbehaves -they can use the law to get rid of this  foreigner .

I was going to ignore your responses, however you do make a couple of good points in your posts, as has Susco.

 

As has been said on here, the law is applied selectively as and when it's required, or not as the case may be, and it doesn't necessarily apply when a foreigner misbehaves, although that does give the "powers that be" an opportunity to be able to do a bit of a money/property grab.

 

This was the case with my friend who lost his Villa here after he worked in Singapore, and used it as a holiday home/retreat whilst he was working, only to find that his crooked lawyer, who had set the deal up in the first place using a limited company, had sold it from under him.

 

No problem my friend thought because it's a clear case of fraud so it went to court. The court found that my friend was in the wrong in the first place for having circumvented the law in buying the place through a sham company, so everything else after that was null and void, and he lost everything.

 

I have no idea what happened to the crooked lawyer, but I haven't seen my friend in a few years now, this especially after he was really down after losing his retirement villa, using up all of his retirement funds to do so.

 

So one doesn't necessarily have to misbehave to fall foul of "the law".

 

And as Susco has pointed out, there are many things here which are illegal yet nothing is done about them – – a few examples would be not wearing a crash helmet on the motorbike, ghost riding the wrong way on a road, speeding, drunk driving........I'm sure you get the picture.

 

PS. Something else that just popped into my mind after I had written this, is the old ruse of a 30+30+30 year lease, which was quite commonly bandied around by real estate spruikers to potential buyers a few years ago, especially when a 30 year lease was the allowed lease.

 

So the unwitting buyer thought they had their condo/apartment for life, when in fact that in itself was illegal and was just recently ruled upon, whereby the court ruled that if a foreigner bought an apartment/condo on a 30+30+30 lease, then rather than trying to initiate the second 30 years, which was the case, the whole agreement was deemed null and void and the purchaser lost out.
 

Edited December 20, 2020 by xylophone

[Delight]

3 hours ago, xylophone said:

I was going to ignore your responses, however you do make a couple of good points in your posts, as has Susco.

 

As has been said on here, the law is applied selectively as and when it's required, or not as the case may be, and it doesn't necessarily apply when a foreigner misbehaves, although that does give the "powers that be" an opportunity to be able to do a bit of a money/property grab.

 

This was the case with my friend who lost his Villa here after he worked in Singapore, and used it as a holiday home/retreat whilst he was working, only to find that his crooked lawyer, who had set the deal up in the first place using a limited company, had sold it from under him.

 

No problem my friend thought because it's a clear case of fraud so it went to court. The court found that my friend was in the wrong in the first place for having circumvented the law in buying the place through a sham company, so everything else after that was null and void, and he lost everything.

 

I have no idea what happened to the crooked lawyer, but I haven't seen my friend in a few years now, this especially after he was really down after losing his retirement villa, using up all of his retirement funds to do so.

 

So one doesn't necessarily have to misbehave to fall foul of "the law".

 

And as Susco has pointed out, there are many things here which are illegal yet nothing is done about them – – a few examples would be not wearing a crash helmet on the motorbike, ghost riding the wrong way on a road, speeding, drunk driving........I'm sure you get the picture.

 

PS. Something else that just popped into my mind after I had written this, is the old ruse of a 30+30+30 year lease, which was quite commonly bandied around by real estate spruikers to potential buyers a few years ago, especially when a 30 year lease was the allowed lease.

 

So the unwitting buyer thought they had their condo/apartment for life, when in fact that in itself was illegal and was just recently ruled upon, whereby the court ruled that if a foreigner bought an apartment/condo on a 30+30+30 lease, then rather than trying to initiate the second 30 years, which was the case, the whole agreement was deemed null and void and the purchaser lost out.
 

 Your friend was simply a victim of fraudsters -as were those who bought into the 30 +30+ 30

 

Both straight forward cases  where 'caveat emptor'  applies.

A Thai court favouring a Thai national  is just standard in this country.

This country has plenty of fraudsters. So has every country on the planet.

However if a foreigner does not  mis behave  or be defrauded -then buying a property via a company  is highly unlikely to be a problem.

 That said -I would not do it!

 

[xylophone]

12 hours ago, Delight said:

 Your friend was simply a victim of fraudsters -as were those who bought into the 30 +30+ 30

 

Both straight forward cases  where 'caveat emptor'  applies.

A Thai court favouring a Thai national  is just standard in this country.

This country has plenty of fraudsters. So has every country on the planet.

However if a foreigner does not  mis behave  or be defrauded -then buying a property via a company  is highly unlikely to be a problem.

 That said -I would not do it!

 

Sure my friend was a victim of fraud by the lawyer, but the main point is that because he bought the Villa through the Thai company route, he lost it because that was deemed an illegal purchase in the first place, he didn't lose it because of the fraud.

I take your point about "caveat emptor" however there are thousands of farangs in the country who have been told by lawyers that buying a house/land through the Thai company route is a normal procedure, and newly arrived farangs have little idea about how they could be possibly ripped off by lawyers.

The 30+30+30 lease arrangement was initiated by real estate sellers and some legal firms actually wrote out contracts for this (I know I have a friend nearby who swears that his 30+30+30 lease is valid/legal, and is now trying to sell his apartment, with no luck obviously).

Again, I would stress that a foreigner does not need to misbehave or be defrauded for something like this to happen, as it can simply be a case of a marriage breakup, girlfriend walking out, infidelity or anything of that ilk that sparks investigation into the legality of the "purchase" as others have said in this thread.

Pleased to hear that you would not do it as it can present more trouble than it's worth.
 

[Delight]

On 12/21/2020 at 11:02 AM, xylophone said:

Sure my friend was a victim of fraud by the lawyer, but the main point is that because he bought the Villa through the Thai company route, he lost it because that was deemed an illegal purchase in the first place, he didn't lose it because of the fraud.

I take your point about "caveat emptor" however there are thousands of farangs in the country who have been told by lawyers that buying a house/land through the Thai company route is a normal procedure, and newly arrived farangs have little idea about how they could be possibly ripped off by lawyers.

The 30+30+30 lease arrangement was initiated by real estate sellers and some legal firms actually wrote out contracts for this (I know I have a friend nearby who swears that his 30+30+30 lease is valid/legal, and is now trying to sell his apartment, with no luck obviously).

Again, I would stress that a foreigner does not need to misbehave or be defrauded for something like this to happen, as it can simply be a case of a marriage breakup, girlfriend walking out, infidelity or anything of that ilk that sparks investigation into the legality of the "purchase" as others have said in this thread.

Pleased to hear that you would not do it as it can present more trouble than it's worth.
 

Your friend, I suspect, bought a 100% legal Thai company. However the control was with the lawyer - not your friend. That was the deception. 

As far as 30etc.  lease deals - they are legal. However the landowner has to sign to validate the 2nd and 3rd terms. Why would he do this? Better to take back the land with the house set on top. 

Just another scam

[Lacessit]

It really doesn't matter where you are in the world, getting tangled up with the legal system or government bureaucracy rarely turns out well. Even more so in Thailand.

I rent here, always will. The only contact I have had with the legal system here is to make a Thai will.

[xylophone]

12 minutes ago, Delight said:

Your friend, I suspect, bought a 100% legal Thai company. However the control was with the lawyer - not your friend. That was the deception. 

As far as 30etc.  lease deals - they are legal. However the landowner has to sign to validate the 2nd and 3rd terms. Why would he do this? Better to take back the land with the house set on top. 

Just another scam

You are wrong on both counts....

 

My friend lost his Villa because he purchased it through the nominee company route, and the court ruled that as it was purchased this way in the first instance, which is illegal in Thailand, then the whole transaction was deemed null and void by virtue of this illegal purchase, so because he broke the law of the land, he lost his Villa.

 

As for the 30+30+30 lease deals, well these lease deals are not recognised under Thai law and are legally questionable, because irrespective of what is written in the initial contract, any contract which states a lease period of longer than 30 years has no legal standing, irrespective if it is signed by the leaseholder/landholder or whomsoever.

 

I have attached the relevant laws and rulings regarding this and hopefully it will be the end of the matter, because I do not want to continue repeating what I have already stated and what Thai law also states, so on to ignore you go.

 

"The 90 year lease does not exist in the Civil and Commercial Code nor Supreme Court judgments but is merely a creation of the property development sector in Thailand suggesting a longer term, but in fact these are all 30 year leases with a very weak and legally unprotected promise to renew the lease when it runs out after 30 years".

 

"There are a few other theories behind a 90 year lease however these are not based on hire of property laws. These alternative contract structures have as the main agreement a 30-year lease agreement but aim to give additional rights in the wording of the agreement and in supplemental agreements not registered with the Land Department. These structures are not recognized under Thai law and legally questionable (or void) because foreigners cannot own land and lease cannot exceed 30 years.

 

AND.

 

A renewal term of a 30 year lease is allowed, but only at the end of the first term. If the lease would say the lease has a term of 90 years (by a 30 year lease with 2 renewals in it) then the term would by law be reduced to 30 years. Any renewal option is not a guaranteed lease right, actually it is not even a lease right protected by section 569 (supreme court ruling), but a personal promise of the original lessor and party to the contract! A promise by the current owner to give you a new lease when your registered 30 year lease runs out. The renewal option will not (automatically) follow the lease when ownership is transferred during the term, in fact it does not even make a difference if this promise is written in the lease registered with the land department or in a separate contract or addendum to the lease (not registered with the land department).

 

Section 569. A contract of rent of immovable property is not extinguished by the transfer of ownership of the property hired. The transferee is entitled to the rights and is subjected to the duties of the transferor towards the tenant.

In Thai มาตรา 569 อันสัญญาเช่าอสังหาริมทรัพย์นั้นย่อมไม่ระงับไปเพราะเหตุ โอนกรรมสิทธิ์ทรัพย์สินซึ่งให้เช่า ผู้รับโอนย่อมรับไปทั้งสิทธิและหน้าที่ของผู้โอนซึ่งมีต่อผู้เช่านั้นด้วย

 

It is important to understand that section 569 only applies to or protects what is under Thai rent of property laws considered actual rental rights and obligations. In general, and especially for the content of long term lease contracts aimed at foreigners, not everything that is written in a lease always follows the lease when ownership of the property leased is transferred or is protected by law. This 90 year lease does not exist in the Civil and Commercial Code nor Supreme Court judgments but is merely a creation of the property development sector in Thailand suggesting a longer term, but in fact these are all 30 year leases with a very weak and legally unprotected promise to renew the lease when it runs out after 30 years.

 

[mikebell]

On 12/25/2020 at 4:28 PM, xylophone said:

My friend lost his Villa because he purchased it through the nominee company route, and the court ruled that as it was purchased this way in the first instance, which is illegal in Thailand, then the whole transaction was deemed null and void by virtue of this illegal purchase, so because he broke the law of the land, he lost his Villa.

Your friend was punished for breaking the law; presumably there were 51% Thai shareholders also involved, was any punishment meted out to them?  As you know I am involved in a wrangle with a crooked audit company who change the shareholding without my consent.  Having lost my house for a fraction of its worth, I have been slapped with failure to do 2 audits; late penalties for this offence + a 25K bill to wind up the company. 

I note above that you quoted the law in Thai.  Could you PM me with the Thai version of punishment for shareholders so I can try to negotiate my debts downward?

[xylophone]

20 minutes ago, mikebell said:

Your friend was punished for breaking the law; presumably there were 51% Thai shareholders also involved, was any punishment meted out to them?  As you know I am involved in a wrangle with a crooked audit company who change the shareholding without my consent.  Having lost my house for a fraction of its worth, I have been slapped with failure to do 2 audits; late penalties for this offence + a 25K bill to wind up the company. 

I note above that you quoted the law in Thai.  Could you PM me with the Thai version of punishment for shareholders so I can try to negotiate my debts downward?

Hello again Mikebell,

 

Yes I do remember your situation, however I don't think I can help you, unfortunately, because this was some 5 years ago (perhaps more) and despite hiring another lawyer to fight his case, he lost it and it pretty well devastated him, and he left the country as far as I know, as I haven't seen him since, and never heard a word from him again!

 

He really couldn't believe what he was going through and how he could have been ripped off like this, and what seemed to be a simple case of taking this crooked lawyer to court, turned out to be nothing of the sort.

 

As regards the 51% Thai shareholding, well the lawyer set it up for him the same way that many other farangs have had their "house purchase" set up, by putting himself and three other "Thais" as "shareholders", but in fact they were names only and just people who signed pieces of paper, not bone fide shareholders who had actually put any money into the company, so there was nobody to punish for this, apart from the lawyer himself and I don't know what happened to him, or even if he is still operating.

 

I do remember being horrified that the lawyer was allowed to get away with this, and asked my friend if he was going to take any action in this regard, and he said he had spent enough on what proved to be a fruitless exercise, and was really despairing of ever getting any justice of any sort, especially as the lawyer was well-known in the area, and despite the fact he had employed another lawyer to take the case for him.

 

He was of the opinion it was the legal profession looking after its own, or words to that effect, and that further effort on his behalf would be pointless and even more soul destroying, and after that I never saw him again.

 

So I'm sorry that I can't help you, however just a point for you to consider......you mention a "crooked audit company" and my question would be, "does this audit company have any association with the lawyers who set up your "house purchase" in the first place?

 

And the reason I ask this is because if they have been complicit in breaking the law, then maybe that's a lever for you, however as you have seen in my explanation above, it's a case of Thai law looking after their own, so to speak, and that's how my friend put it as well.

 

And I would also ask if they could change a shareholding without your consent, and that might be the path to follow, because I believe you would have to have been notified if this was the case, especially if the structure of the company was changed accordingly.

 

Sorry I can't be of more help, however I have looked on the Internet and found the following which relates to the changing of a shareholding and you should read it, but in a nutshell it appears that if the company is set up "correctly" with shareholder certificates being issued to the relevant people (which is often not the case for these type of companies) then those names which appear as shareholders on the certificates, have to be notified of any change of shareholder (you for example), however......

 

As for the shares of a limited company, it may be changed or transferred without even taking consent of the company. But, in regards to shares that are entered in a name certificate, such type of rule is subjected to limitations.
https://www.konradlegal.com/blog/must-know-facts-to-change-shareholder-of-thai-company/