Buying Land

[johnstaz]

Wondering if a British ltd company can buy land to build a house in LOS?

[stevehaigh]

i'm not an expert but i'm 99.9% sure the answer is no. the only way you (or your company) can buy land is to start a thai company which can have 49% foreign ownership, your lawyers can find the 51% thai owners. set it up so the thais have 1 vote for 10 shares and you have 1 for 1 share, so you effectively have 100% control.

steve

[johnstaz]

i'm not an expert but i'm 99.9% sure the answer is no. the only way you (or your company) can buy land is to start a thai company which can have 49% foreign ownership, your lawyers can find the 51% thai owners. set it up so the thais have 1 vote for 10 shares and you have 1 for 1 share, so you effectively have 100% control.

steve

<{POST_SNAPBACK}>

Thanks for that,

any idea how easy & reliable that way is?

Also would that give visa benefits?

[stevehaigh]

Thanks for that,

any idea how easy & reliable that way is?

Also would that give visa benefits?

<{POST_SNAPBACK}>

it was real easy for me, i just gave the lawyer 25,000 bhat, signed about 100 forms (all in thai BTW, no idea what they said) and in 4 weeks got a nice book with pictures of my directors, tax id cards, company stamp, etc.

everyone says it's safe and legal but who knows what taksin or whoever will come up with next.

yes, you can get a work visa throught your own company but you must have a least 2M bhat in your co. account i think.

if you are serious, i would talk to steve from sunbelt asia. i think he's the expert on these things.

steve

[lopburi3]

Lets just say it is safe and legal until someone rocks the boat. It is highly likely any land owned in this manner would be ruled illegal if the purpose of the company were found to be to circumvent foreign land ownership laws. But I am not a lawyer so that is a gut feeling rather than a legal one.

Ownership of home will not help your visa (unless done under the condo investment provisions) but if a working company it might give you work permit status and business visa on that basis. As stevehaigh says best to talk with Indo-Siam or Sunbelt as they seem to be honest brokers in a sea of sharks.

[johnstaz]

Thanks for the info guys

[Sumitr Man]

John:

Speak to a good lawyer. I'm not too sure if it still applies, but there used to be an exception where the company brought money into Thailand, built a factory, and employed Thais. Under that exception, an overseas company used to be permitted to purchase 1 rai of land in IEAT designated area - for residential purposes of the management of the company.

This could easily have changed by now. It also only applied to IEAT-like areas (i.e. the Eastern Seabaord), not everywhere.

SM

[Sunbelt Asia]

There are a number of ways that a foreigner may follow to own freehold land:

• Become a Thai resident/citizen

• Be the principal investor in a new export orientated Board of Investment (BOI) approved company [the current maximum size limit of freehold ownership rights is one Rai of land (1600 Sq.m.)

• Make an approved investment of over 40 Million Baht left for a minimum number of years [the current maximum size limit of freehold ownership rights is one Rai of land (1600 Sq.m.)

• 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. The foreigner retains full control by being the sole director of the company with executive powers. Additional safeguards include more voting rights, personal loan agreements, the creation of a registered mortgage and/or long lease with pre-paid options to renew

• Acquire the land in the name of a nominee Thai national who then grants a registered 30 year lease (residential) to the foreigner in the foreigner’s own name with pre-paid option to renew for a further two periods of 30 years each. The foreigner may also be given the option to purchase the land should the law in respect of foreigner’s land ownership rights change.

• Usufruct Interest (Sidhi-kep-kin) - gives you temporary ownership rights to things on or arising from the land. In practice, a usufruct is limited to a 30-year maximum period; like leases, the agreement can be successively renewed. In contrast to a lease, a usufruct interest can be sold or transferred, although it expires upon the death of the holder of the usufruct and therefore cannot be inherited

* Nominee with Mortgage - you can use a Nominee to purchase the house/land and have a mortgage (registered with the appropriate land department office) on the property in your favors. It is important to note that only the owner of the land is entitled to mortgage the land; the lessee of land does not have the same privilege. The property cannot be sold until the mortgage lender signs the title documents declaring the mortgage cleared. This once again give 100% control over the property although not ownership. The buyer may remove the nominee should any problems arise and transfer in a new nominee at any time. One problem is however if the value of the land is greater than the loan, the person who owes the loan, can pay the loan off and buy the land.

Under Thai law, the foreigner can own the structure (for example a house) erected on the land. Additional safeguards (if required) include personal loan agreements and/or the creation of a registered mortgage and an agency agreement. Certainty of possession of land and house is assured by being the owner of the house. If arranged as above then the house will be separate from the land, and will not be a component part under the Civil Law. Ownership of buildings can be confirmed and the lessor cannot seize the house upon expiration of the lease.

In practice, the method favored the most by foreigners is to acquire land through a Thai private limited company, and this is the way we recommend for our clients most frequently. The additional advantages are that it establishes a business presence in Thailand and it may be the employer/sponsor in the foreigner’s application for a non-immigrant visa and/or work permit.

Please contact us for more details.

www.sunbeltasia.com