Home And Land Ownership Through A Company

[LennyW]

Twisting laws, truths etc to fit your requirements. Sounds like a lawyer or real estate agent in Thailand.

The biggest nonsense i have ever seen written down.

Because nobody on Thai Visa (what percentage does own via a company, 1%, 5%?) has been caught, therefore it is save to own via a company.

Nobody is saying it is "safe" Kuhn Jean, but buy the same token, nobody is coming forward to say they have had property taken away from them via the company route. People have been asking the question for years, and no examples have been given, or can be found as Naam stated.

Thai Visa member or not - can you give us an Actual and Factual confirmed, "non hearsay" example of anyone actually falling foul of the "law" on this one????

Edited January 31, 2009 by LennyW

[JimmyGreaves]

My major dislike of the company route for ownership was the nominess being my wife and the Thais working at the Lawyers Office. The Thais at the lawyers office were nominess for dozens (hundreds???) of similar companies in the Pattaya area.

I looked into the Usufruct/30 year lease thing and was working with Sunbelt to set up the Usufruct.

The process of doing this involved me having to remove all the shareholders and putting new shareholders in place so the Usufruct could be set up. Something to do with the Usufruct not being allowed in the name of a current shareholder - ie my wife.

To cut a long story short, I realsied I could remove the Thai nominees in the office as now only 3 people are needed for the company setup.

Sorted - so now the company is just me, my wife and her mother.

So the problem as far as I am concerned is solved or at least manageable. It was always unsettling to me that I would need to try to argue the case for nominees that were nominees in many other companies!

I know this will be 'knocked down' as still illegal etc... still it is alot better than it was - and the Usufruct thing just did not feel right. I dont like the idea I would be living here the rest of my life without the authority to sell if I wanted to.

Good idea. Was this any easy process and what was the cost to register the resignation documents and appoint the new 3rd shareholder?

Does this still give you control though?

[dsfbrit]

My major dislike of the company route for ownership was the nominess being my wife and the Thais working at the Lawyers Office. The Thais at the lawyers office were nominess for dozens (hundreds???) of similar companies in the Pattaya area.

I looked into the Usufruct/30 year lease thing and was working with Sunbelt to set up the Usufruct.

The process of doing this involved me having to remove all the shareholders and putting new shareholders in place so the Usufruct could be set up. Something to do with the Usufruct not being allowed in the name of a current shareholder - ie my wife.

To cut a long story short, I realsied I could remove the Thai nominees in the office as now only 3 people are needed for the company setup.

Sorted - so now the company is just me, my wife and her mother.

So the problem as far as I am concerned is solved or at least manageable. It was always unsettling to me that I would need to try to argue the case for nominees that were nominees in many other companies!

I know this will be 'knocked down' as still illegal etc... still it is alot better than it was - and the Usufruct thing just did not feel right. I dont like the idea I would be living here the rest of my life without the authority to sell if I wanted to.

Good idea. Was this any easy process and what was the cost to register the resignation documents and appoint the new 3rd shareholder?

Does this still give you control though?

I have not yet signed the paperwork. This should have been completed by now, but my wifes mother could not come here last week as she was ill. So she is coming next weekend and we meet with the lawyer on Monday 9th.

I will then do the annual accounts with them as well.

The cost of the transfer and all paperwork in my case is 4000 Baht. However, as I am using my usual lawyer and they are the 'dodgy' shareholders, this may be a cheap deal as they may be glad to be getting rid of the company as well??

My wife and mother will take up the percentage held by the other shareholders and my shareholding will remain the same I would suspect. Thats what I asked for and my lawyer just said OK.

The transfer letter was the only reason my wife's mother needed to come to Pattaya at all. In fact I could have sent the letter to her and got her to sign it and have it witnessed and sent back. However, I thought it 'safer' if she came here and did it all in the lawyer's office and get it all done at them same time. She can also spend a weekend with us and I can then take her out for a nice meal out etc... to say thanks... make a family weekend of it

I will let you know exactly what happened after the 9th February.

[hhgz]

"Was this any easy process and what was the cost to register the resignation documents and appoint the new 3rd shareholder?"

You can check with Sunbelt Asia or a private attorney for the answers.

[Gary A]

For those who own homes via a Thai company, better them than me. Waiting for some Thai politician to develop a hate for farangs is not my idea of security. When it happens, hopefully the government will give you a way out.

[dsfbrit]

For those who own homes via a Thai company, better them than me. Waiting for some Thai politician to develop a hate for farangs is not my idea of security. When it happens, hopefully the government will give you a way out.

Gary A, mate, you are waiting for a Thai politican to hate us - your wait is over and has been for a long time.

[Khun Jean]

Luckily they still offer a way out. Very friendly bunch i must say. Do the same in your own country and you will know the difference.

[Arkady]

don't hold your breath for getting any answers relating to your question. a couple of years ago i (actually my lawyers) have scoured all kind of sources and could not detect a single case.

No cases seem to be documented, except for the case of the crooked farang developers on Samui who allegedly encroahed on forestry reserve and their corrupt accomplice in the Land Dep who made the issue blow up and I don't remember any court cases resulting from that. and hopefully that means there haven't been any other cases, although as suggested in another post there may have been some cases that were dealt with quietly through tea money. The Land Dept does, however, give some examples in Thai on its website of Thai women (only named as Mrs A and Miss who had broken the law by buying land without declaring that they were married to foreigners, one of whom had not registered her marriage but was cohabiting with a foreigner. It says that they were forced to dispose of the land without mentioning if there were any other penalties. It doesn't say how they were caught. Presumably some one complained, if the cases are true.

On the other hand the Land Dept has clearly blocked a large number of land purchases attempted by companies that had foreign associations, as well as many companies with no foreign association but looked suspicious according to their guidelines: e.g. a newly formed company with no business immediately trying to buy a resort house and the authorized director cannot tell the officer what kind of business the company was formed to do. I think as far as they are concerned the 2006 initiative has been very successful. So far it has only involved the Land Office and let's hope it stays that way. They probably don't have the staff to review past purchases but it could be done more easily with help from other agencies and/or enlisting informants.

Edited March 20, 2009 by Arkady

[hhgz]

"...On the other hand the Land Dept has clearly blocked a large number of land purchases..."

However, forming a company to buy a large tract of land meant for a large housing development is completely different from the guy forming a company to buy a townhouse. Although both involve foreigners, the former attracts undue attention, while the latter does not.

[Livinginexile]

Had mine 10 years already.. Still waiting for the dreaded knock on the door Wouldn't care anyhow.. House doesn't owe me anything. If I had been paying rent for the same place at market value it would have been paid off 3 yrs ago.. So basically apart from the inconvienience it wouldn't be a problem.. That and the fact that if you are discovered to be using a nominee company you are given time to sell or transfer the property... Nothing to worry about.. I sleep much better than the guys who bought into a high end condo that is only 50% full and nobody is interested in paying maintenance. In ten years their condo will look like an unpainted slub.. wonder how much it will be worth.. ?

Yes but....

If the said house was in your name by this timeyou would now own the asset.

PLUS the last 3 years would have been rent free!

PLUS with the depreciation of (I will assume you are British) the pound, your asset would now be worth 30-40% more than what you paid for it.

Plus you have missed out on the capital gain you would have now made on your asset.

....and you say you are winning?

My "high end" condo is rented out at 40k per mth. PLUS I own it.

Who's the loser? go figure

[happyfish88]

With other options available why even bother.

@khun jean

Why don't you begin another thread about the other available options? I'm very interested!

But please consider the specific starting and ending conditions:

Starting conditions: you've got approx. 10m Baht today and want to live in a house with garden of that value today.

Ending conditions: in x years (10, 20 or 30) you should still have the property or have the equivalenet in baht to buy another property of the same standard (we suppose maintenance costs are paid).

I could start a thread but i don't see the point.

First, important information about ownership will NEVER be pinned, and as such are bound to disappear on page 500.

Second, having the same topics over and over again will surely get a higher hit rate with google but is not really helpful for people because most think old topics are obsolete.

Third, everything that has to be said on ownership options has been said and is often ignored because people really, really like to buy a house and land.

fourth, when people are desperate to stay in Thailand they ignore advise even if it saves their bums, because they really, really like to buy a house and land.

Fifth, people will always try to circumvent the VERY clear laws because they really, really like to buy a house and land.

Sixth, people have more faith in lawyers and real estate agents because they really,really like to buy a house and land.

I think you see the pattern.

I like your reply........and i think i see the pattern because they really,really like to buy a house and land.

[Langsuan Man]

For what it is worth.......

I own a lot in a development in the name of a Thai company, set up by a lawyer, and am in the process of building a house

The developer is building another house behind mine and has erected a wall between the two properties. To insure that this wall is not encroaching on my property I went to the Satahip Land Office to request a survey of the property line

They kindly offered to type up the minutes of a meeting that I as the Director of the company held, with myself, at which time "we" agreed to request a survey from the Land Office

The only inconvenience that I had was having to drive all the way back to Pattaya to get my company seal for these minutes

I paid 300 THB for the "minutes" and 2,900 THB for the survey. At no time did anyone mention any problems with the company owning the land and the house, and IMHO, they facilitated the transaction

So if this proverbial knock at the door occurs there are sure going to be an awful lot of people having to explain just how this system is illegal

What everyone forgets to mention is that a Farang owning a company is completely legal in this country, their ownership of the company is just diluted by having other Thais as shareholders

The correct procedure is that a Thai (the lawyer) forms a company and that company legally purchases the land. The lawyer then sells the company (and it's assets (the land)) to the foreigner, who then changes the Directorship and shareholders and then registers the land in the company name, after paying all the appropriate taxes and fees. The land issue is secondary, the main issue is that the foreign ownership of a limited company in Thailand is legal since it's formation and maintenance is regulated by the Department of Business Development, Ministry of Commerce, under the appropriate sections of The Civil and Commercial Code

[thaiwanderer]

For what it is worth.......

I own a lot in a development in the name of a Thai company, set up by a lawyer, and am in the process of building a house

The developer is building another house behind mine and has erected a wall between the two properties. To insure that this wall is not encroaching on my property I went to the Satahip Land Office to request a survey of the property line

They kindly offered to type up the minutes of a meeting that I as the Director of the company held, with myself, at which time "we" agreed to request a survey from the Land Office

The only inconvenience that I had was having to drive all the way back to Pattaya to get my company seal for these minutes

I paid 300 THB for the "minutes" and 2,900 THB for the survey. At no time did anyone mention any problems with the company owning the land and the house, and IMHO, they facilitated the transaction

So if this proverbial knock at the door occurs there are sure going to be an awful lot of people having to explain just how this system is illegal

What everyone forgets to mention is that a Farang owning a company is completely legal in this country, their ownership of the company is just diluted by having other Thais as shareholders

The correct procedure is that a Thai (the lawyer) forms a company and that company legally purchases the land. The lawyer then sells the company (and it's assets (the land)) to the foreigner, who then changes the Directorship and shareholders and then registers the land in the company name, after paying all the appropriate taxes and fees. The land issue is secondary, the main issue is that the foreign ownership of a limited company in Thailand is legal since it's formation and maintenance is regulated by the Department of Business Development, Ministry of Commerce, under the appropriate sections of The Civil and Commercial Code

They only need to knock on your door for it to be a problem for you, a nationwide crackdown / policy change is never required. All it needs is a jealous / interested near neighbour or a curious official - who needn't 'upset the apple cart' by looking at your legal structure. 'Everyone does it' is no defence and nor is the original 'mistake' of an official since no liability attaches to that.

If the procedure you describe in the last paragraph above was so 'correct' why the transfer after registration? It clears one very small hurdle (and only by putting the transaction in a certain order) but offers little or no protection to even a cursory review.

To the extent that you have beneficial use and control, you are in breach. Various precautions can be taken but they do not legitimise or make the structure immune.

Risk is a very personal matter but let's not confuse appetite for it with any sort of protection.

[Langsuan Man]

They only need to knock on your door for it to be a problem for you, a nationwide crackdown / policy change is never required. All it needs is a jealous / interested near neighbour or a curious official - who needn't 'upset the apple cart' by looking at your legal structure. 'Everyone does it' is no defence and nor is the original 'mistake' of an official since no liability attaches to that.

If the procedure you describe in the last paragraph above was so 'correct' why the transfer after registration? It clears one very small hurdle (and only by putting the transaction in a certain order) but offers little or no protection to even a cursory review.

To the extent that you have beneficial use and control, you are in breach. Various precautions can be taken but they do not legitimise or make the structure immune.

Risk is a very personal matter but let's not confuse appetite for it with any sort of protection.

A perfect example of:

Don't confuse me with the facts, my mind is already made up

[thaiwanderer]

They only need to knock on your door for it to be a problem for you, a nationwide crackdown / policy change is never required. All it needs is a jealous / interested near neighbour or a curious official - who needn't 'upset the apple cart' by looking at your legal structure. 'Everyone does it' is no defence and nor is the original 'mistake' of an official since no liability attaches to that.

If the procedure you describe in the last paragraph above was so 'correct' why the transfer after registration? It clears one very small hurdle (and only by putting the transaction in a certain order) but offers little or no protection to even a cursory review.

To the extent that you have beneficial use and control, you are in breach. Various precautions can be taken but they do not legitimise or make the structure immune.

Risk is a very personal matter but let's not confuse appetite for it with any sort of protection.

A perfect example of:

Don't confuse me with the facts, my mind is already made up

If you bother to re-read it or have read it correctly the first time you'll see that it's not.

Your very limited experience and your mind is already made up - that's fine as its your money.

But let's not extrapolate that to any degree of certainty - accept it for what it is and you'll never get burnt no matter what happens.

[eljeque]

If this was going to happen, we would have already heard about it, after a few decades and tens of thousands of transactions.

We have many people writing about being ripped off in many endeavors, including real estate, but we do not have anyone writing about being ripped off-or knowing of someone being ripped off by owning property through the company route.

[Langsuan Man]

If this was going to happen, we would have already heard about it, after a few decades and tens of thousands of transactions.

We have many people writing about being ripped off in many endeavors, including real estate, but we do not have anyone writing about being ripped off-or knowing of someone being ripped off by owning property through the company route.

+1

[thaiwanderer]

If this was going to happen, we would have already heard about it, after a few decades and tens of thousands of transactions.

We have many people writing about being ripped off in many endeavors, including real estate, but we do not have anyone writing about being ripped off-or knowing of someone being ripped off by owning property through the company route.

+1

But isn't it an irrelevance to you anyway since you did it the 'correct' way?

Or would discussion of that involve ripping apart your alleged legal structure?

Which is it - legal and immune or illegal but there'll never be a problem anyway?

Edited November 17, 2011 by thaiwanderer

[johnnyk]

Had mine 10 years already.. Still waiting for the dreaded knock on the door Wouldn't care anyhow.. House doesn't owe me anything. If I had been paying rent for the same place at market value it would have been paid off 3 yrs ago.. So basically apart from the inconvienience it wouldn't be a problem.. That and the fact that if you are discovered to be using a nominee company you are given time to sell or transfer the property... Nothing to worry about.. I sleep much better than the guys who bought into a high end condo that is only 50% full and nobody is interested in paying maintenance. In ten years their condo will look like an unpainted slub.. wonder how much it will be worth.. ?

Yes but....

If the said house was in your name by this timeyou would now own the asset.

Isn't that what he said?

PLUS the last 3 years would have been rent free!

Isn't that what he said?

PLUS with the depreciation of (I will assume you are British) the pound, your asset would now be worth 30-40% more than what you paid for it.

Plus you have missed out on the capital gain you would have now made on your asset.

....and you say you are winning?

Didn't he say he owns a house? Capital gain is only on paper until you actually sell.

My "high end" condo is rented out at 40k per mth. PLUS I own it.

If its rented out then you must live somewhere else so your net is not 40K.

Who's the loser? go figure

[Langsuan Man]

But isn't it an irrelevance to you anyway since you did it the 'correct' way?

Or would discussion of that involve ripping apart your alleged legal structure?

Which is it - legal and immune or illegal but there'll never be a problem anyway?

Reminds me of the scene in Shawshank Redemption where Timothy Bottoms tells the warden that he is just being obtuse

It called a loophole and they are all over the place to be taken advantage of

[Naam]

aaaahhhhh.... one of the most interesting topics has been revived but the title of the thread remains the same. it should change to "poor clever chicken little advises well-off stupid Farang not to eat steak and lobster but sticky rice and som tam."

[Hooters]

wow nobody has said it yet so let me say. Do NOT buy what you cant walk away from in Thailand

I have always wondered why this rule is for Thailand only Never heard it when i was in Mexico or Spain, I gues you just cant lose in those places, maybe I will buy there and live here..

[Naam]

wow nobody has said it yet so let me say. Do NOT buy what you cant walk away from in Thailand

I have always wondered why this rule is for Thailand only Never heard it when i was in Mexico or Spain, I gues you just cant lose in those places, maybe I will buy there and live here..

this "rule" is not for Thailand only but applies to any investment/commitment in any country on this planet. the reason why you hear that rule more often in Thailand is that some super intelligent Farangs think they have the right to guide and patronise their utterly stupid fellow Farangs with statements similar to "two plus two equals four."

[thaiwanderer]

But isn't it an irrelevance to you anyway since you did it the 'correct' way?

Or would discussion of that involve ripping apart your alleged legal structure?

Which is it - legal and immune or illegal but there'll never be a problem anyway?

Reminds me of the scene in Shawshank Redemption where Timothy Bottoms tells the warden that he is just being obtuse

It called a loophole and they are all over the place to be taken advantage of

Just looking for some honesty.

I imagine (or rather hope) you aren't so silly as to actually believe your own posts above about it all being above board.

Lack of enforcement is not a loophole.

I have no criticism for such structures of themselves, its only when people pretend they're something they aren't.

[Khun Jean]

I had to laugh at the word 'loophole'!

There is no loophole, only wrong interpretations of a very clear rule and intention.

[thaiwanderer]

I had to laugh at the word 'loophole'!

There is no loophole, only wrong interpretations of a very clear rule and intention.

Me too.

It is a loophole in the same way a thief who hasn't been caught yet has also 'discovered' one (and both have potential jail time ).

I hope he doesn't actually believe that / is merely regurgitating poor legal advice received.

Anyhow confusing a mechanism to just register an interest at the land office with something that moving forward could resist even a half hearted investigation is a mistake.

Assessing the likelihood of ever being scrutinised is an entirely different matter than how a structure might then hold up (or not) to any scrutiny.

Unfortunately the two are often conflated in this forum without some posters realising.