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Owning Property Through A Company


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Got my chanote today, or perhaps I should say my illegitimate 39% falang company was issued its chanote. :o

Congratulations Johnnyk.

We all know that there are some risks involved but you are probably aware of these. Any problems registering the land in the company? Were you a shareholder/ director when they transferred to the comp, or do you just have good Thai shareholders. Any business purpose for the company?

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Hope people don't think I'm being cheeky, just a way of saying that chanotes are still being issued to "ïllegitimate companies". The chanote is the title deed to my land that is owned by my company next step is go in and pay the various fees and sign a bunch of stuff.

BL4u,

I'm a shareholder/director holding 39% but my shares are ordinary shares, ie. each share has 10 votes while the other shares have only 1 vote each. Common and still legal structure, done all the time in the west enabling people like Conrad Black to loot companies while owning relatively few shares. I am the only director with authority to make binding decisions, standard stuff. One million baht company so looting it is only a dream!

My other shareholders are legit people with proper incomes - accountants, lawyers etc. No shares owned by the noodle cart lady outside the front door!

Purpose of my company is to rent my house to vacationers. I file monthly statements and tax returns plus an audited statement at year-end showing biz activity, so its not a dormant shell. I''m happy to pay a bit of tax; Rule One for me is always keep the tax man happy.

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I own some farmland in mid Thailand on my company which I own 49%, my fellow Thai Directors have signed the regualtory transfer notes for their shares. I tried to buy some adjacent land in my company land but the authorities objected (at the time they were worried about the Japanese setting up communities).

Since then I have studied some Thai law books and found a small law that virtually allows a Farang to own his own land or at least be the only person who can sell it.

Cheers

Pete

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no work permit, no need as marketing etc are done outside Thailand . Accountant does all management inside LoS.

No offence but that sounds like a real strech to me. You are directing the accountant, Signing and stamping take returns and company documents, Paying repairs utilties and repairs plus I assume contracting for repairs ect. To say you are not doing business in thailand when the business is located here does not seem logical IMO, good luck though

The company is doing business in Thailand, I am physically present only part of the time.

Accountant does the books without direction, he is a shareholder.

Edited by johnnyk
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Only for work being done when present in Thailand a workpermit is needed.

If however you sign one document, be it a rental contract, an insurance claim, whatever, and a dispute comes out of it and it can be proven by immigration records that you actually were in Thailand at the date of signing, your signature will be declared void by any court.

Insurance companies are very well aware of this fact and will use this to try to avoid paying out any claim you make, a claim you are not allowed to make on behalf of your company while in Thailand!

Stupid example as a friend of mine found out, his car is registered on the same company on which his house his registered.

Has accident in Thailand and claims damages on behalf of the company (owner of the car). No payout has been done as they found out he took out the insurance on behalf of the company while in Thailand and not holding a WP!!!

Simply a copy of his WP (if he had had one) had been needed and the insurer would have had to pay...

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Only for work being done when present in Thailand a workpermit is needed.

If however you sign one document, be it a rental contract, an insurance claim, whatever, and a dispute comes out of it and it can be proven by immigration records that you actually were in Thailand at the date of signing, your signature will be declared void by any court.

Insurance companies are very well aware of this fact and will use this to try to avoid paying out any claim you make, a claim you are not allowed to make on behalf of your company while in Thailand!

Stupid example as a friend of mine found out, his car is registered on the same company on which his house his registered.

Has accident in Thailand and claims damages on behalf of the company (owner of the car). No payout has been done as they found out he took out the insurance on behalf of the company while in Thailand and not holding a WP!!!

Simply a copy of his WP (if he had had one) had been needed and the insurer would have had to pay...

A good example of the importance of a work permit.

I see what the insurance company is doing, however, I would not say it is void what your friend did (the insurance). Section 150 Civil and Commercial Code: 'An act is void if its object is expressly prohibited by law or is impossible, or is contrary to public order or good morals'. Not the case.

I would say it was more a section 153 problem: 'An act which does not comply with the requirements concerning the capacity of persons is voidable'. Maybe if he could show a (backdated) minutes of meeting from the company empowering him to enter into this insuarance on behalf of the company the insure would have to pay... Still, any signed document could be rejected by any governmental agency involved till a work permit has been issued. I do not know if johnnyk is correct that if he has signed abroad it is not necessary to have a work permit. He signs abroad but the act completes when it arrives here in Thailand.

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Hope people don't think I'm being cheeky, just a way of saying that chanotes are still being issued to "ïllegitimate companies". The chanote is the title deed to my land that is owned by my company next step is go in and pay the various fees and sign a bunch of stuff.

can't you read?! you don't have to pay, i.e. you are not allowed to pay because you don't have a work permit. enjoy the free ride!

:o

Edited by Naam
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based on all judicial beancounting in this thread i conclude that the signatures of my wife are null and void when she signs a credit card slip in Friendship to pay for groceries or me signing a cheque to pay a contractor who has carried out a job in or on my property.

:o

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based on all judicial beancounting in this thread i conclude that the signatures of my wife are null and void when she signs a credit card slip in Friendship to pay for groceries or me signing a cheque to pay a contractor who has carried out a job in or on my property.

:o

Spending your own money is not illegal :D

Spending money on behalf of a company (means 51% of the money is not yours, but owned by other people for who you work for or have a responsibility towards!) is I think a clear difference....

If the car is in your own personal name, the insurance company would have no other choice then to pay out (however much they loathe to do that :D )

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based on all judicial beancounting in this thread i conclude that the signatures of my wife are null and void when she signs a credit card slip in Friendship to pay for groceries or me signing a cheque to pay a contractor who has carried out a job in or on my property.

:o

Yes Naam, maybe you are right: Section 1473. Each spouse is manager of his or her Sin Suan Tua (personal property).

In managing the Sin Somros (community property) in the following cases, the husband and wife have to be joint manager, or one spouse has to obtain consent from the other:

(1) Selling, exchanging, sale with the right of redemption, letting out property on hire-purchase, mortgaging, releasing mortgage to mortgagor or transferring the right of mortgage on immovable property or on mortgageable movable property.

(2) Creating or distinguishing the whole or a part of the servitude, right of inhabitation, right of superficies, usufruct or charge on immovable property.

(3) Letting immovable property for more than three years.

(4) Lending money

(5) Making a gift unless it is a gift for charitable, social or moral purposes and is auitable to the family condition.

(6) Making a compromise.

(7) Submitting a dispute to arbitration.

(8) Putting up the property as guarantee or security with a competent official or the Court.

The management of the Sin Somros in any case other than those provided in paragraph one can be made only by one spouse without having to obtain consent from the other.

Was just a quick look at the law :D

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'An act is void if its object is expressly prohibited by law or is impossible, or is contrary to public order or good morals'

I would say that it is expressly prohibited to take any actions such as the undertaking of an insurance on behalf of a company without holding a work permit. This you can only do because you are appointed a director in that company, a function you can only perform when physically in Thailand if you hold a WP.

Engaging in the function of director of a company is expressly prohibited when not holder of a workpermit. In my work permit that function is clearly stated as part of my job description!

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Engaging in the function of director of a company is expressly prohibited when not holder of a workpermit.

interesting! what if the company is one of the thousands of "sleeping" companies who don't do business and are established only to hold land or immobile property on the land? my additional question is why could (and still can) these companies be officially formed with expatriat directors and no authority asks for a work permit?

my wife and me are directors in a company that possesses the land on which our home was built. does one of us need a work permit to sign the annual tax return and of course make the payment?

fortunately we have appointed a friend as a director who lives abroad and who will act as trustee in case of both our demise. would it be prudent to send once a year the documents abroad and let him sign them? or is this just overkill?

an alternative would be that my wife signs these documents as she travels abroad quite frequently.

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In managing the Sin Somros (community property) in the following cases, the husband and wife have to be joint manager, or one spouse has to obtain consent from the other:

(6) Making a compromise.

my wife forces quite often compromises on me without my consent :o can i sue her? do i need a work permit to sue her?

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Engaging in the function of director of a company is expressly prohibited when not holder of a workpermit.

interesting! what if the company is one of the thousands of "sleeping" companies who don't do business and are established only to hold land or immobile property on the land? my additional question is why could (and still can) these companies be officially formed with expatriat directors and no authority asks for a work permit?

my wife and me are directors in a company that possesses the land on which our home was built. does one of us need a work permit to sign the annual tax return and of course make the payment?

fortunately we have appointed a friend as a director who lives abroad and who will act as trustee in case of both our demise. would it be prudent to send once a year the documents abroad and let him sign them? or is this just overkill?

an alternative would be that my wife signs these documents as she travels abroad quite frequently.

Naam, is your wife an alien (ie Farang?)

If she is Thai she obviously does not need a work permit to make decisions or to sign papers.

One of the main problems in Thailand is that all the relevant departments simply do not talk to each other. So land and house department does not know that you, as a director, need a work permit to sign for the company. Nor do they care. Of course until something goes wrong. Then suddenly everybody remembers these little laws.

How do the local lawyers get away with setting up illegal companies in the first place? Your lawyer is supposedly the person you trust! Have you ever seen a lawyer charged with setting up a illegal company with nominee shareholders?

Basically you do as you please over here, but if something goes wrong and the i's are not dotted or the t's not crossed, you are in a heap of problems...

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Well, looks like a discussion is underway here. That's a good thing.

I wonder if Sunbelt has anything to add to this question of a falang director signing a tax return or actually paying land transfer fees?

Edited by johnnyk
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Just did a search and came up with this recent exchange between another poster and Sunbelt:

QUOTE

Sometime back Sun Belt Asia stated that the managing director of a company does not have to have a work permit. I looked for the posts for several hours and now am giving up on the search so I am starting a new thread.

Of course he has to have a work permit if he is working in Thailand, even if he signs any paperwork in Thailand. In that post, it was stated the Md was OUTSIDE Thailand and we stated he does not have to have a work permit as long as he does not work or signs the company paperwork( audits,contracts etc) inside Thailand. He better be able to back that up, that his passport was stamped he was not in Thailand.

QUOTE

So here is my question.

1) What exactly can a managing director do without a work permit ?

Inside Thailand...nothing without a work permit.

QUOTE

Can he only sit in an office at the company? Can he tell the workers what to do ? Will he be in trouble if he is on the computer in the office? Can he sign documents? All of these things have been listed on other threads as needing a work permit.

He cannot sit at his desk. He cannot tell employees want to do inside Thailand without a wp. He will be in trouble if hes on the computer and in a office without a wp. He cannot sign docs inside Thailand unless he has a wp.

We always have strongly advocated for anyone that is working inside Thailand( if they are a MD or not a MD) to get a work permit

Outside Thailand... different story.

Pretty clear then. Luckily my last year's audit and tax return was sent to me and signed when I was outside Thailand which I can prove through my passport. So I will do the same this year.

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Got my chanote today, or perhaps I should say my illegitimate 39% falang company was issued its chanote. :o

I have to say that it's better you than me. It is a slippery slope indeed with no resolution in sight. I enjoy sleeping at night and NOT having to worry about what a government whose right hand has no idea what the left hand is going to do next. The only thing certain is the uncertainty.

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Got my chanote today, or perhaps I should say my illegitimate 39% falang company was issued its chanote. :o

I have to say that it's better you than me. It is a slippery slope indeed with no resolution in sight. I enjoy sleeping at night and NOT having to worry about what a government whose right hand has no idea what the left hand is going to do next. The only thing certain is the uncertainty.

Interested to Know about this. Does the work permit have to be with one's company? or will any work permit do?

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Basically you do as you please over here, but if something goes wrong and the i's are not dotted or the t's not crossed, you are in a heap of problems...

i get your point Monty and to be on the safe side i will let my wife sign any document in future when she is abroad. it's anyway only once a year when the tax return is due.

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Got my chanote today, or perhaps I should say my illegitimate 39% falang company was issued its chanote. :o

I have to say that it's better you than me. It is a slippery slope indeed with no resolution in sight. I enjoy sleeping at night and NOT having to worry about what a government whose right hand has no idea what the left hand is going to do next. The only thing certain is the uncertainty.

Interested to Know about this. Does the work permit have to be with one's company? or will any work permit do?

Work permit has to be with your own company, since the WP states what your exact function is in the company, and at exactly what address you are allowed to perform that function.

Director for company X has no business signing paperwork for company Y!

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Only for work being done when present in Thailand a workpermit is needed.

If however you sign one document, be it a rental contract, an insurance claim, whatever, and a dispute comes out of it and it can be proven by immigration records that you actually were in Thailand at the date of signing, your signature will be declared void by any court.

Insurance companies are very well aware of this fact and will use this to try to avoid paying out any claim you make, a claim you are not allowed to make on behalf of your company while in Thailand!

Stupid example as a friend of mine found out, his car is registered on the same company on which his house his registered.

Has accident in Thailand and claims damages on behalf of the company (owner of the car). No payout has been done as they found out he took out the insurance on behalf of the company while in Thailand and not holding a WP!!!

Simply a copy of his WP (if he had had one) had been needed and the insurer would have had to pay...

So does this mean that when I come into Thailand on business and sign contracts (for my US employer) with factories without having a work permit, just a business visa, that they would be thrown out by a court?

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A 39% illegitimate company?

I would not be able to sleep thinking about losing my home. :o

"losing home" = rubbish. what one can lose is the land on which one's home is built. and that only if one is dumb enough not having "Plan B" prepared.

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A 39% illegitimate company?

I would not be able to sleep thinking about losing my home. :o

"losing home" = rubbish. what one can lose is the land on which one's home is built. and that only if one is dumb enough not having "Plan B" prepared.

Ahhhhhhhhhhhhh! Thats a lot clearer. So I lose the land but I do not lose my home. Thats crystal clear to me now. Thank you Naam for enlightening me.

Us Brits mostly consider " home " to be land and building.

Edited by stevemiddie
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there seems to be a miss interpertation of the definitions and I would thank anyone with proper legal knowledge to explain.

a company needs to have share holders

a company needs to have directors and a board. (can be share holders)

the company must also have a manager. the carries out the duties of the day to day activities of the company.

reports to tax autorities are signed by the manager.

however the balance sheets and final auditing must be signed by the director of the company after the are aprroved by the board..

My lawyer has advised me that he checked with the labour department and the answer was.

a forigner owner who has shares in a thai company and is not the manager of the company does not need a work permit as he is only an owner (investor)

if a forigner is allso a manager he needs a work permit.

a forigner can sign and approve the companies yearly reports with out having to apply for a work permit. and that all that he can do.

however the forigner must have a valid business visa and a tax id.

tax id are not limited to a work permit.

if you are conductng business in Thailand and as result of this buisness you gain profits then under the thai law you must pay tax in thailand unless under a tax agreement with another country. example you are a share holder in a thai company and you must pay tax for your divedends when they are payed out.

please if any one can shed more light on the above issues.. but please only legal facts not speculations...

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My lawyer has advised me that he checked with the labour department and the answer was.

a forigner can sign and approve the companies yearly reports with out having to apply for a work permit.

I think it may be appropiate to show us the regulation that states this to be correct.

I was under the impression that Sunbelt Asia have stated this is NOT the case. If you are a foreigner signing ANY legal documents relating to a company in Thailand....you need a WP.

Edited by stevemiddie
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