Pattaya Enhances Safety Measures with Realistic Fire Drill on School Buses

[Scottbiker76]

Ok all,

I went to a lawyer last week to look for answers on my questions regarding the setup of a Thai co.ltd to hold a Bed&Breakfast in the near future.

I know that it is possible to owning the land and building if i do business...

The problem is that the Thai shareholders have to show the money to the thai officials with a copy of a bankbook or other sources.

But what if I don't have Thai shareholders that don't have that money in my company ? But i need them to form the company...

I cannot imagine just to give it to them, that would be crazy, wouldn't it ?

What solutions or available in this case ?

It seems Thailand is not investor friendly for setting up companies here anymore...

Best regards,

Scottbiker

[InterestedObserver]

A real Thai company requires real Thai shareholders with real Thai money invested. That's the law. Any other scheme is technically illegal and asking for trouble. Nominee shareholders are illegal, PERIOD.

[simon43]

Scottbiker, what nationality are you?

Simon

[Scottbiker76]

Scottbiker, what nationality are you?

Simon

European

Regards,

Scottbiker

[Scottbiker76]

A real Thai company requires real Thai shareholders with real Thai money invested. That's the law. Any other scheme is technically illegal and asking for trouble. Nominee shareholders are illegal, PERIOD.

So actually you are saying that when I don't have Thai investors I cannot do business in Thailand ? Is that correct ?

Regards,

Scottbiker

[Naam]

Scottbiker, what nationality are you? Simon

i think he is Irish

[InterestedObserver]

A real Thai company requires real Thai shareholders with real Thai money invested. That's the law. Any other scheme is technically illegal and asking for trouble. Nominee shareholders are illegal, PERIOD.

So actually you are saying that when I don't have Thai investors I cannot do business in Thailand ? Is that correct ?

Regards,

Scottbiker

Correct, the laws of Thailand say that you can own a maximum of 49% of the business, your Thai shareholders (investors) own the remaining 51%.

[simon43]

I just asked in case he was a US citizen and could perhaps go down the Amity company route with some other US shareholders.

Simon

[mortenaa]

A real Thai company requires real Thai shareholders with real Thai money invested. That's the law. Any other scheme is technically illegal and asking for trouble. Nominee shareholders are illegal, PERIOD.

So actually you are saying that when I don't have Thai investors I cannot do business in Thailand ? Is that correct ?

Regards,

Scottbiker

Correct, the laws of Thailand say that you can own a maximum of 49% of the business, your Thai shareholders (investors) own the remaining 51%.

Depends on the company. If your doing business in tourist, consulting etc, foreigners may own up to 100% of your shares. But then your company is considered foreign, and you might run into some difficulties compared to a Thai company. You can also get approval from BOI Thailand to own land and build a Bed & Breakfast. In these difficult times that should be possible, but I think they normally consider bigger investments. I don't know how big you current investment is.

Another possibility is to setup a Thai company under your Thai friends names. Buy the land, and then later buy the shares back from them. I think in most cases land registration with a foreigner owning 49% of a Thai company is not ok.

Good luck!

[InterestedObserver]

I don't think a small Bed & Breakfast is going to interest the BOI all that much. Hotels with at least 100 rooms are listed by the BOI as eligible for their support. Is the OP ready to invest that kind of money? Since the OP will be trying to operate a services business, as in List 3 of the FBA, I don't think 100% foreign ownership will get approval.

[Scottbiker76]

A real Thai company requires real Thai shareholders with real Thai money invested. That's the law. Any other scheme is technically illegal and asking for trouble. Nominee shareholders are illegal, PERIOD.

So actually you are saying that when I don't have Thai investors I cannot do business in Thailand ? Is that correct ?

Regards,

Scottbiker

Correct, the laws of Thailand say that you can own a maximum of 49% of the business, your Thai shareholders (investors) own the remaining 51%.

Depends on the company. If your doing business in tourist, consulting etc, foreigners may own up to 100% of your shares. But then your company is considered foreign, and you might run into some difficulties compared to a Thai company. You can also get approval from BOI Thailand to own land and build a Bed & Breakfast. In these difficult times that should be possible, but I think they normally consider bigger investments. I don't know how big you current investment is.

Another possibility is to setup a Thai company under your Thai friends names. Buy the land, and then later buy the shares back from them. I think in most cases land registration with a foreigner owning 49% of a Thai company is not ok.

Good luck!

1.Can someone tell me how big companies do this who don't have an american treaty, because I really don't believe they have all REAL Thai investors in Thailand, it just doesn't make sence...

2. If one setup a completely co.ltd with 3 thai shareholders holding land and after a few months they sell their shares for let's say 40% to foreigner, will they still check the company as a new completely ltd ?

Regards,

Scottbiker

[Scottbiker76]

A real Thai company requires real Thai shareholders with real Thai money invested. That's the law. Any other scheme is technically illegal and asking for trouble. Nominee shareholders are illegal, PERIOD.

So actually you are saying that when I don't have Thai investors I cannot do business in Thailand ? Is that correct ?

Regards,

Scottbiker

Correct, the laws of Thailand say that you can own a maximum of 49% of the business, your Thai shareholders (investors) own the remaining 51%.

Depends on the company. If your doing business in tourist, consulting etc, foreigners may own up to 100% of your shares. But then your company is considered foreign, and you might run into some difficulties compared to a Thai company. You can also get approval from BOI Thailand to own land and build a Bed & Breakfast. In these difficult times that should be possible, but I think they normally consider bigger investments. I don't know how big you current investment is.

Another possibility is to setup a Thai company under your Thai friends names. Buy the land, and then later buy the shares back from them. I think in most cases land registration with a foreigner owning 49% of a Thai company is not ok.

Good luck!

What guarentees are their when they setup the company that you get your money back ? I cannot imagine you trust them without anything on paper ???

Regards,

Scottbiker

[quiksilva]

I don't think a small Bed & Breakfast is going to interest the BOI all that much. Hotels with at least 100 rooms are listed by the BOI as eligible for their support. Is the OP ready to invest that kind of money? Since the OP will be trying to operate a services business, as in List 3 of the FBA, I don't think 100% foreign ownership will get approval.

I agree, BOI would not be interested in a B&B. Although a hotel management business can be 100% foreign owned, however it looks as if he will be looking to enter the hotel business as an owner, which is prohibited.

Even if the OP finds a reliable Thai partner there are still some problems with the concept. In order to get a hotel licence, the property needs to comply with current building regulations, which could prove to be a major obstacle, unless the property was purpose built. I'd expect to see shortfalls in parking provisions and safety systems in most small commercial buildings , for conversion to hotel use.

[InterestedObserver]

Scottbiker, you obviously need to go talk to your lawyer again. The questions you are asking are basic to setting up a business in Thailand and should have already been answered by your lawyer. You and your lawyer are not communicating very well as evidenced by the type of questions being asked.

[Scottbiker76]

Scottbiker, you obviously need to go talk to your lawyer again. The questions you are asking are basic to setting up a business in Thailand and should have already been answered by your lawyer. You and your lawyer are not communicating very well as evidenced by the type of questions being asked.

If i knew it i wouldn't have to ask it here...

I just want to know how save is my money putting it into thai hands as thai law requires thai shareholders to show proof of income or source of funding. My lawyer says everything is build on trust...i can hardly believe that

Regards,

Scottbiker76

[RAZZELL]

I just want to know how save is my money putting it into thai hands as thai law requires thai shareholders to show proof of income or source of funding. My lawyer says everything is build on trust...i can hardly believe that

Regards,

Scottbiker76

RAZZ

[Emeritus]

Scottbiker76, you started off by telling us what information you received from your lawyer, and you asked us if that information was correct.

Other members replied, saying that your lawyer's information was correct. You need Thai shareholders who are willing to invest their own money.

Your answer to this was that you cannot believe it.

This should really be the end of this thread, shouldn't it? You asked a question, you got an answer, and you did not like the answer.

The ball is now in your court. Ask your government to make a treaty with Thailand that will enable nationals of your country to own a hotel business 100% in Thailand. Tell your government that it is unfair that a Thai is allowed to own a hotel business 100% in your country but you do not have the same right in Thailand. Write to your member of parliament and to every other government person in your country for whom you have the right to vote that you will not give them your vote during the next election if they do not do something about this injustice. Once this treaty is signed and implemented, talk to your lawyer again.

It's as simple as this.

Edited April 7, 2009 by Emeritus

[Scottbiker76]

Scottbiker76, you started off by telling us what information you received from your lawyer, and you asked us if that information was correct.

Other members replied, saying that your lawyer's information was correct. You need Thai shareholders who are willing to invest their own money.

Your answer to this was that you cannot believe it.

This should really be the end of this thread, shouldn't it? You asked a question, you got an answer, and you did not like the answer.

The ball is now in your court. Ask your government to make a treaty with Thailand that will enable nationals of your country to own a hotel business 100% in Thailand. Tell your government that it is unfair that a Thai is allowed to own a hotel business 100% in your country but you do not have the same right in Thailand. Write to your member of parliament and to every other government person in your country for whom you have the right to vote that you will not give them your vote during the next election if they do not do something about this injustice. Once this treaty is signed and implemented, talk to your lawyer again.

It's as simple as this.

Emeritus,

I am not talking about 100% ownership, read my questions, I know i cannot own 100%, only 49% and i can live with that, also with the fact that even then i can control it.

2. If one setup a completely co.ltd with 3 thai shareholders holding land and after a few months they sell their shares for let's say 40% to foreigner, will they still check the company as a new completely ltd and the source of funding ?

Regards,

Scottbiker76

[torrenova]

The problem with these dummy companies is that in order for Thais to have 51%, they need or could be required to prove where they got the money to invest the 51%. The government want to make sure that money has been taxed.

You can go around this a number of ways but I'll detail two.

Firstly you can have a multiple share class structure. Thais could have 90% of Class A shares but no Class B shares. You can play around with that idea about PIBS, non voting, etc.

Secondly is a simple share structure where the shares are issued but they are held as security for loans of similar amounts. This needs to be tarted up a bit but you can see the idea.

[Kf6vci]

Well, how about using a 1st DoT (mortgage) demanding a full repayment in X months at a price exceeding the FMV of the property? That way, it may fallinto your hands.

O'm seconding that there is way too much red tape!

FYI, you can run into serious trouble with partners. It happened to me in California. A general contractor posing as county building inspector... ending in serial bankruptcies and properties being "sold" by managing partners to entities owned by them. Bottom line, you better run a credit check on anyone beforeeven considering a partnership!

Good luck.