Company Shares & Making A Will

[JimmyGreaves]

Anyone know the procedure in allocating farang company shares through a will?

1. Can it be done?

2. Can they passed to a foregn national i.e. my daughter uk national over 21 years

3. Can they be passed to my daughter i.e. Thai national under 3 years

Cheers

Edited February 29, 2008 by jflundy

[ThaiLawOnline]

Anyone know the procedure in allocating farang company shares through a will?

1. Can it be done?

2. Can they passed to a foregn national i.e. my daughter uk national over 21 years

3. Can they be passed to my daughter i.e. Thai national under 3 years

Cheers

Shares of a company are "asset" and all asset can be passed to someone else by a will, foreigners are not. If a person gives LAND to a foreigner in a will, this is more complicated as foreign ownership of land is forbidden by the land code (with some exception). However, there is an exception for inheritance and foreigners have ONE YEAR to sell land if they get it by a will.

1. Yes.

2. Yes.

3. Yes.

[WilliamJarvis]

one thing, if the assets are Thai-based it is [strongly] advisable to have the will governed by, and in accordance with, Thai law.

Also, with 3, if your child is a minor, then you will need to appoint a guardian (in the event of your death). While you can pass the assets to the child, there are provisions for the guardian to sell the assets if it is in the best interests of the child (apart from land, which requires a court order). Never was sure what that really meant.

I'm not sure if it is still the case, but you used to be able to separate the guardianship between a guardian who looks after the financial welfare of the child and one that looks after the day-to-day needs of the child.

[ThaiLawOnline]

A guardian is only when the child doesn't have anyone to exert parental powers... Should the mother survives, she will be the only one deciding about the asset of the child. Not a guardian appointed in a will.

Am I right William? I am not sure about that but this is what I thought...

[WilliamJarvis]

^you can opt to have a financial guardian that is not a relative. Otherwise, if your have a surviving relative - and don't name a guardian in your will - the surviving relative will become the guardian. If you have a named guardian in your will (whether or not they're a relative or spouse), then they will become the guardian. There is, however, a presumption this person will be the surviving spouse.

[WilliamJarvis]

also, thinking about it, I have a problem with 2. If the child is a foreigner - with no Thai connection - they may be subject to the usual rules regarding foreign ownership. Obviously if you are a foreigner, then they are effectively stepping into the shoes of you. However, if doing such breaches said foreign ownership rules, which may not have been in effect when you acquired such assets (for example, you were grandfathered), then there could be a problem.

Certainly worth checking out with a lawyer (where the exact nature of the assets can be disclosed).

[ThaiLawOnline]

In 2, question was if he can transfer shares to a foreigner. Answer is yes, clearly.

Everyone is subject to the rule of foreign ownership. However, limited Thai companies can be owned 100% by foreigners.

In this case, a foreigner (testator) is giving to a foreigner (legatee). It can't be more than the first foreigner was owning and it will be the same. It would be different if the testator was a Thai, with 60% of the shares, giving to a foreigner... We would have to verify if the company can or not continues his business with a majority of foreign ownership, and if they can, what kind of licenses will be required.

[WilliamJarvis]

However, limited Thai companies can be owned 100% by foreigners.

Hmmm, without wishing to sound rude Seb, I know one or two Japanese companies that might disagree with that statement.

[JimmyGreaves]

Ok thanks for your sdvice guys.

Yes, it is a Thai will I'm referring to as I don't think a UK will would hold any weight.

For information the company is holding land. I would have thought the nature of the companies assets should not concern anyone when transfering my shares in a will. However there maybe rules on age of someone becoming a company director which is the position held with the shares etc etc

[ThaiLawOnline]

Don't be rude William!

It can be done.

We setup a 100% Thai limited company with 7 AMERICAN shareholders under the "Treaty of Amity" lately. 100% foreign ownership...

And this is from the BOI's website:

"A minimum of seven shareholders is required at all times. A private limited company may be wholly owned by aliens. However, in those activities reserved for Thai nationals, aliens’ participation is generally allowed up to a maximum of 49 percent".

We normally register foreign entities with the BOI and never did a new Thai limited company 100% foreign ownership yet. Maybe soon....

I wrote "CAN BE OWNED" and didn't make the distinction for spheres of activities.

People still think it's impossible...This is from another law firm:

Criteria for approval of majority foreign ownership To obtain approval for majority foreign ownership of a Schedule 2 or 3 business, a foreign investor will have to demonstrate that the nature of the business contributes to a number of matters, including: national safety and security; economic and social development; natural resources and energy conservation; environmental protection and consumer protection. Other matters that will be taken into account include: the size of the business; the creation of employment, the transfer of technology, and research and development.