JMRhoa123 Posted April 16, 2008 Share Posted April 16, 2008 Is it still possible to start a company in thailand for the purpose of putting a house in the company's name? I have gotten conflicting answers. Link to comment Share on other sites More sharing options...
worldfun Posted April 16, 2008 Share Posted April 16, 2008 sure - but best if you can generate some income with the company also - else it may become dormant after a while... Link to comment Share on other sites More sharing options...
JMRhoa123 Posted April 16, 2008 Author Share Posted April 16, 2008 Who is the best company / law firm to talk to about getting the company set up? Link to comment Share on other sites More sharing options...
joskydive Posted April 16, 2008 Share Posted April 16, 2008 You can go to any Lawyer as long as they know what you want. Have been here 10 years. Got my Company 4 years ago, along with my house, had 3 visits already from the government to ensure my company is cosha!!!!!!!!!!!!!!! Luckily, I have 15 dogs and they declined when I invited them in to see my office, which is cosha, and just said that I must pay my tax for my staff every month. When I told them I have an accountant who does that they were satisfied and left. Should you wish for any more information, please contact through the private mail. Link to comment Share on other sites More sharing options...
johnnyk Posted April 17, 2008 Share Posted April 17, 2008 make sure the company is active and file tax returns. if you have to, pay a bit of tax it keeps the taxman happy and he's someone you want to be happy! Link to comment Share on other sites More sharing options...
gusgorman Posted April 17, 2008 Share Posted April 17, 2008 All/some of the above really. I am in Real Estate and as the last reply says, really the law states it is illegal to set up a company for solely owning land, IE a dummy corp. So it is best if it is a legal trading company where you can show VAT and or Tax returns every year. If you simpyl set up a company to own the land, it can end up in court and trouble. Link to comment Share on other sites More sharing options...
backflip Posted April 17, 2008 Share Posted April 17, 2008 Sunbelt Asia can do this for you, and set it up to prevent the Thai co-owners (required by law) from taking control of the company. Link to comment Share on other sites More sharing options...
ThaiLawOnline Posted April 17, 2008 Share Posted April 17, 2008 Not only is it illegal to have a Thai company to "own land" but it could be expensive too. (I have to add that illegal if the company uses nominees to own land at the place of the foreigner). Some law firms might forget to tell you about the accounting to do every year, the price to shut down a company, etc. There are other ways that you should look at: usufruct, superficies or lease agreements for example. It all depends on your needs, your personal situation and what you want to do in the future. Link to comment Share on other sites More sharing options...
WilliamJarvis Posted April 18, 2008 Share Posted April 18, 2008 It is also highly recommended that the company capitalisation is not the same as the purchase price of the property - as this indicates a sham. Also, if you plan to be a director of the company, and most people do, then it is essential you talk with a good tax lawyer about the implications of transfer pricing - IssanLawyers: do you happen to know if the transfer pricing rules between a company and its directors when the director rents a/the company property are still an issue? I seem to recall that if a company rents property to a director below market rate, the Revenue Office will pull the company up under the transfer pricing rules. Link to comment Share on other sites More sharing options...
worldfun Posted April 18, 2008 Share Posted April 18, 2008 why would it perhaps be that the director (owner) want to charge himself for living in the house he already paid for??? is property/asset valuations usually checked (to be within reg. capital) in such or any companies? Link to comment Share on other sites More sharing options...
nothingleftbutfaith Posted April 18, 2008 Share Posted April 18, 2008 Don't do it, unless you can afford to loose the money you are ready to invest in Thailand. It is illegal. You and I know that this is pretty meaningless for a ( rich) Thai, but for a farang it can be a different story. Don't do it. Link to comment Share on other sites More sharing options...
Naam Posted April 18, 2008 Share Posted April 18, 2008 Not only is it illegal to have a Thai company to "own land" = factual rubbish of course a thai company can own land and of course even a thai company with a certain percentage of foreign shareholders can own land. there is nothing illegal about it ***inflammatory comment removed*** Link to comment Share on other sites More sharing options...
WilliamJarvis Posted April 19, 2008 Share Posted April 19, 2008 why would it perhaps be that the director (owner) want to charge himself for living in the house he already paid for???is property/asset valuations usually checked (to be within reg. capital) in such or any companies? A director is not the "owner" of the company, the shareholders are. The director needs to ensure he acts in the best interests of the company, which means maximising profit/revenue. Therefore, if the company rents to a director at below market rate, the Revenue Department may (and used) to declare this practice as a means of trying to avoid paying tax on profit. I believe this is how the so-called "transfer pricing rule" worked, but I'm not a tax expert by any means and could very well be wrong. Link to comment Share on other sites More sharing options...
WilliamJarvis Posted April 19, 2008 Share Posted April 19, 2008 (edited) Not only is it illegal to have a Thai company to "own land" = factual rubbish of course a thai company can own land and of course even a thai company with a certain percentage of foreign shareholders can own land. there is nothing illegal about it . True. Indeed, even a foreign company in Thailand can own land if it has BoI or IEAT approval to do such and it complies with those rules/requirements. I know of at least one major international company that was allowed to purchase property in Thailand under BoI privilege with the requirement that only its staff could live in the property and that it must sell the property as soon as it was no longer BoI sanctioned. Edited April 20, 2008 by sbk Link to comment Share on other sites More sharing options...
ThaiLawOnline Posted April 20, 2008 Share Posted April 20, 2008 The way JMR started his question was clear... If a foreigner setup a company IN THE PURPOSE to buy land, which the land code prohibits for foreigners, using Thai nominees, sorry to say, but that's illegal. Clearly and it's not rubbish. Yes, there are exceptions for even foreign entities or foreigners to own land (Boi approval, 40 million investment, etc.). But these are rare exceptions. If you setup a Thai limited company, which REAL shareholders, where the Thais are not nominees, that's different. Now, why do you setup a company in purpose the put the house in their name? (initial question) To save taxes? Actually, a house could be under a foreigner's name. But foreigners use companies to own land on their name because they can't. That's the reality. Link to comment Share on other sites More sharing options...
Naam Posted April 20, 2008 Share Posted April 20, 2008 If a foreigner setup a company IN THE PURPOSE to buy land, which the land code prohibits for foreigners, using Thai nominees, sorry to say, but that's illegal. please cite the thai law which specifies this alleged illegality. thai law prohibits that foreigners own land = correct. but thai law allows that foreigners hold a minority share and minority voting rights in companies which buy/own land and thai law permits that foreigners build and OWN homes IN THEIR NAMES on this land. that's the present legal situation AND accepted legal procedure since many years. anything else (or future interpretation of the prevailing law) is nothing but speculation. Link to comment Share on other sites More sharing options...
BL4u Posted April 20, 2008 Share Posted April 20, 2008 Thai law allows that foreigners hold a minority share and minority voting rights in companies which buy/own land and thai law permits that foreigners build and OWN homes IN THEIR NAMES on this land. that's the present legal situation AND accepted legal procedure since many years. anything else (or future interpretation of the prevailing law) is nothing but speculation. The present procedure is that all partly foreign owned companies are required to demonstrate the source of their capital before being allowed to buy land. This to prevent the use of nominees or shell companies by foreigners. Foreigners using shell companies for land purchase or to circumvent the FBA is based on selective law enforcment and it is an ignored illegal practice - not an accepted legal procedure. Link to comment Share on other sites More sharing options...
BL4u Posted April 20, 2008 Share Posted April 20, 2008 In addition: If I had to choose between buying land in a Thai girlfriend's name with a usufruct for free from that girlfriend (as suggested by Isaan Lawyers/ Properties) I would choose the company route knowing the risks and responsibilities. Not invest too much of your money in Thailand. Link to comment Share on other sites More sharing options...
ThaiLawOnline Posted April 21, 2008 Share Posted April 21, 2008 Naam: BL4U has answered you. There are several dispositions like 96 of the Land Code... BL4U: I understand what you mean, but completely disagree. If someone doesn't need to sell a property and is perfectly happy with his wife/girlfriend, there is NO NEED to setup a company. Even if you know the responsabilities and risks, there are fees and work associate with it. A usufruct is a strong contract, it is registered and perfectly legal. Fees are low and it even protects you if your girlfriend/wife predeceased you. Now, everyone has a different situation. In Isaan, most foreigners here have a Thai girlfriend/wife and are here for a long time. Usufructs exist for many years in several jurisdictions... I believe many people have a lot to lose and prefer using other ways that are more lucrative for their business...that's just my opinion. Link to comment Share on other sites More sharing options...
BL4u Posted April 21, 2008 Share Posted April 21, 2008 (edited) Naam: BL4U has answered you. There are several dispositions like 96 of the Land Code...BL4U: I understand what you mean, but completely disagree. If someone doesn't need to sell a property and is perfectly happy with his wife/girlfriend, there is NO NEED to setup a company. Even if you know the responsabilities and risks, there are fees and work associate with it. A usufruct is a strong contract, it is registered and perfectly legal. Fees are low and it even protects you if your girlfriend/wife predeceased you. Now, everyone has a different situation. In Isaan, most foreigners here have a Thai girlfriend/wife and are here for a long time. Usufructs exist for many years in several jurisdictions... I believe many people have a lot to lose and prefer using other ways that are more lucrative for their business...that's just my opinion. OK Isaan Lawyers and/or Properties: Imo you give misleading info. The info you give on this forum is roughly incorrect and more for your own sales than independent legal information. I do not trust info coming from someone who sells properties and gives legal information, besides, in the past you used at leased 4 different names on this forum. You even responded under different names in 1 thread. As for your info: If a foreigner is buying land in a Thai girlfriends name then this conflicts with the law. For the Thai girlfriend with sections 96 and 113 Land Code Act (as she acquired land as the owner in place of the foreigner) and by supplying false info to the land office official she commits an offence under 137 and 267 Penal Code. This is not allowed. For the foreigner this has a conflict with section 86 and 111 Land Code Act. Why would it be illegal to use a company to buy land on your behalf and legal to use a Thai natural person. Nominees? Since the Temasek investigations we know that there are no nominees in Thailand. Your knowledge is to limited to place everything in perspective imo. How long have you been around? You say about usufructs it can be for free… Is it then a gift from the girl to you? Can she not revoke a gift under certain circumstances? Then you say you can own the building in your own name. What does that mean? It is a sales argument for usufructs and your services. Owning a building upon someone else's land is not smart because when your rights of possession/ use of the land ends you must remove the building – or the building remains unlawfully upon the land. You say with a usufruct you have the rights as the owner? What does that mean? Nothing and it is not true! It is ####. You say, you can rent out the property under a usufruct? Sure, like sub-lease, short term you can rent it out, for up to max 3 years. Not a reason to enter into a lifetime usufruct. Most importantly with a usufruct for life the usufruct ends with your death – it is not transferable. I do not want to be worth more death than alive in Thailand! Why do you call company ownership illegal when the head of the Land Office in Phuket calls it legal, as long as you comply with the latest guidelines. It is a complicated problem from a legal point of view. What are your motives for these articles and posts? To lure newbies on this forum? Or do you hope we all run to you to dissolve our company and change it in for a usufruct from a girlfriend? Edited April 21, 2008 by BL4u Link to comment Share on other sites More sharing options...
backflip Posted April 21, 2008 Share Posted April 21, 2008 "OK Isaan Lawyers and/or Properties: Imo you give misleading info..." Misleading? Thier postings have been absolutely garbage. "Thai companies can't own property" - give me a break! Unfortunately, someone is going to use them for legal advice, and they will get it wrong. Link to comment Share on other sites More sharing options...
ThaiLawOnline Posted April 22, 2008 Share Posted April 22, 2008 It looks like some people are hitting on me, just because I write my name and our company sponsors this forum... Common! Of course, Thai companies can own land if it's not a shell company. If I wrote that it was illegal, it's on the purpose that a foreigner setting up a Thai limited company for HIMSELF, in purpose to own land, like many real estate agencies or law firm are telling people to do, and I strongly believe it is NOT the best option. Just look at the title of this thread: Starting Company to buy Property!!!!! Problem here is that there are many posters with interest in the business... If we draft a lease, a usufruct or setup a Thai limited company, for us, it's the same. How many posts is there on this forum warning people about setting up companies? How many websites? And now, it's total garbage? I received many thanks from serious members with my article about "Everything you wanted to know about usufructs in Thailand". Information was accurate and rarely seen on forums. If people still want to open a company to own land, and know what they are doing, that's their choice and I respect that. Link to comment Share on other sites More sharing options...
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