Land Investment Company

[securityguard]

I will eventually go to siam business brokers or sunbelt asia to register a company that buys land and houses,but if anyone can help me out with info.

This is my plan,register a company,lets call it "Smith Thai Investment CO"as example,which I will be managing director,and i will have probaly 2 Thais as shareholders,who own say 28 % each and me the remainding 44%.

I have been reading some of this website so the majority is owned by the 2 Thais,but i still own 44 percent and have them sign resignatiuon forms.

The company will buy land and houses and land in country areas as investment for future ,businesses etc

My question is should i have more share than 44%?

Should i have more than 2 directors/shareholdrers?

Is a investment company good idea?

[Sunbelt Asia]

Your concept, sorry to say, that you have described is full of holes and will offer you no protection.

You could acquire the land through a Thai private limited company. This involves the incorporation of a private limited company of which the foreigner holds 39% of the shares. Thai law requires that 51% of the shares be held by Thai juristic persons, however, any company with more than 40% foreign interest that purchases land will be investigated by the Central Land Office in Bangkok (under Section 74 of the Land Code) to ensure that the company has not been organized in an attempt to circumvent the prohibition against foreign ownership of land. Hence the remaining 61% of the shares is held by Thai Nationals who grant an irrevocable and absolute power of attorney over the same. The foreigner retains full control by being the sole director of the company with executive powers. Additional safeguards (if required) include personal loan agreements, the creation of a registered mortgage and / or long lease with pre-paid options to renew, different classes of shares with voting rights. You need 7 promoters/ shareholders to form a limited Co. Only 1 promoter has to be Thai. You can be the sole director.

www.sunbeltasia.com

[securityguard]

i didnt know you only had to have one thai as a director?

but must i have 7 directors?

The thai private ltd company can i still call it any name?

thanx sunbelt

[Sumitr Man]

i didnt know you only had to have one thai as a director?

You don't. Strictly speaking, under the rotation rule, you should have 3 directors - but in practice you can have 1 and the MoC will accept this. This 1 can be you.

[Proviso: this is not a US-Thai treaty company]

but must i have 7 directors?

No - there must be a minimum of 7 shareholders at all times. Failing which, you no longer have limited liability.

The thai private ltd company can i still call it any name?

No - some names are not allowed. For example

"Smith Thai Investment CO"

It is unlikely that name will be accepted. However,

"Smith (Thai) Investment Co." may be allowed.

It also depends on whether or not the company name has previously been reserved. In practice, you have to select 3 names that you would like to call your company. You'll then be told which, or all, of those 3 names are permitted for use.

But, Sunbelt is correct - your current theory has more holes than a championship golf course. Without wishing to sound rude, you need to sit down with a reputable legal adviser (either Sunbelt or Indo) and talk through what you want to do. You are entering an area with plenty a minefield.

In any event, best of luck.

SM

[securityguard]

Your right i will have to sit down and get legal advice on this.

I think maybe 6 thais and myself,registering as a thai company ,having them fill out resignation forms beforehand,and if we are to purchase land then i can only own 39 % .Still i will have control over it.

The thing is i want to buy land cheaply in country areas up north and only have my friends as directors.i want to buy this cheaper land out in the "sticks" and wait for about 10 years for the value to increase etc

[Sunny Valentine]

Isn't there lots of potential dangers involved in companies holding land and not actively participating in a business?

One more question I would rather try to clear beforehand: How much will the yearly costs of this Company be? I.e. lawyers, taxes, tax audition, bookkeeping, government fees, Minimum taxes, yearly documentation for tax and other authorities and all and sundry .....

Sunny

[Sunbelt Asia]

having them fill out resignation forms beforehand

Resign from being a shareholder? You need much more protection as that "selling transfer" would not be registered already at the Registry when they can kick you out.

only have my friends as directors

No offense to your friends but I have heard many very sad stories like this. Then they come back and say “Thais are bad" I feel Thais in fact are more honest and loyal than most nationalities but foreigners do things here, they would NOT dream of doing in their own country.

Why do you insist having your friends as directors? Your friends can be shareholders but with safeguards and not just a sales transfer sitting in your safe either. But to put them as directors where they have power is like inviting them to " Please please take my money" I would still bet on most Thais to resist but why tempt anybody? Remember people die; it’s the relatives of the friends that always concern us.

Sunny:

Isn't there lots of potential dangers involved in companies holding land and not actively participating in a business?

If its more than 39% ownership for the foreigner.

How much will the yearly costs of this Company be?

I.e. lawyers

one time fee to set up. should only be on a "need" basis but nothing to renew.

, taxes,

Mid year estimated tax for the year

Our accountant charges 3,000 Baht foir this filing.

Corporation taxes are for a SME ( under 5 mill registered capital)

Under 1 mil 20%

1 mil to 3 mil 25%

over 3 mil 30%

Corporation taxes are for corporation over 5 mill registered capital. then the corporate income tax rate in Thailand is 30% on net profit.

tax audition,

Our auditor charges 12-18K for this.

Tax rate.. see above.

bookkeeping

see above

government fees

none

, Minimum taxes

none unless you rent it out and get income.

yearly documentation for tax and other authorities and all and sundry

none

There is no separate capital gains tax in Thailand. Capital gains are subject to tax in the same manner as other income.

www.sunbeltasia.com

[Sunny Valentine]

I see. So the total yearly cost for the company in case it is not making profit (and this is very likely the case when a company just owns property) is around 15000 to 20000 Baht a Year.

Sunny