Owning A House

[sadako]

Hi to all !

I am thinking of moving to Thailand , setting up a Thai company ( with 51% Thai ownership ) and purchasing a house and 2 condos . If I purchase the house , I believe I can not own the land . If this is the case , what are the chances of me losing my house , even if I " own " it ?

I mean can the 51% shareholders claim a share ? Has this ever happened ?

Or if the lease runs out , must I sell it within a year ?

Thanks for any replies !

David .

[pautai]

judging by what one hears anything is posible when it comes to parting you from your money . dodgy partners , dodgy lawyers who dream up dodgy paperwork and you dont notice till its too late . Land they build on and is owned by somebody else .there are many ways that you can get shafted .

as in all things Thai when investing in LOS only invest what you can afford to kiss goodbye and then laugh it all off ,,,,hahahahaha

[sadako]

Thats a bit worrying , to say the least ! Hmmmmm , really want to do this though...

Is there no secure way of being legit somehow ? Like with pre-nuptuals for example ! How about British owned and run companies ..........

judging by what one hears anything is posible when it comes to parting you from your money . dodgy partners , dodgy lawyers who dream up dodgy paperwork and you dont notice till its too late . Land they build on and is owned by somebody else .there are many ways that you can get shafted .

as in all things Thai when investing in LOS only invest what you can afford to kiss goodbye and then laugh it all off ,,,,hahahahaha

<{POST_SNAPBACK}>

[Darknight]

Thats a bit worrying , to say the least ! Hmmmmm , really want to do this though...

Is there no secure way of being legit somehow ? Like with pre-nuptuals for example ! How about British owned and run companies ..........

judging by what one hears anything is posible when it comes to parting you from your money . dodgy partners , dodgy lawyers who dream up dodgy paperwork and you dont notice till its too late . Land they build on and is owned by somebody else .there are many ways that you can get shafted .

as in all things Thai when investing in LOS only invest what you can afford to kiss goodbye and then laugh it all off ,,,,hahahahaha

<{POST_SNAPBACK}>

<{POST_SNAPBACK}>

Contact indo siam or sunbelt asia our forum sponsors. They are specialized in these cases and give you free initial advice right here on the board.

[LivinLOS]

While its always possible to loose what you wish to accomplish is relatively normal and done all the time..

Use a good competant lawyer and it should be considered low risk.

[pautai]

Thats a bit worrying , to say the least ! Hmmmmm , really want to do this though...

Is there no secure way of being legit somehow ? Like with pre-nuptuals for example ! How about British owned and run companies ..........

judging by what one hears anything is posible when it comes to parting you from your money . dodgy partners , dodgy lawyers who dream up dodgy paperwork and you dont notice till its too late . Land they build on and is owned by somebody else .there are many ways that you can get shafted .

as in all things Thai when investing in LOS only invest what you can afford to kiss goodbye and then laugh it all off ,,,,hahahahaha

<{POST_SNAPBACK}>

<{POST_SNAPBACK}>

even if you are legit external forces outside your control could get you shafted .

read up on what happened at the time of the asian crash a few years back .

and what happened to property sales and prices .it can and will happen again at some time .

[Digger]

Hi to all !

I am thinking of moving to Thailand , setting up a Thai company ( with 51% Thai ownership ) and purchasing a house and 2 condos . If I purchase the house , I believe I can not own the land . If this is the case , what are the chances of me losing my house , even if I " own " it ?

I mean can the 51% shareholders claim a share ? Has this ever happened ?

Or if the lease runs out , must I sell it within a year ?

Thanks for any replies !

David .

<{POST_SNAPBACK}>

First thing to appreciatte is that you do NOT own the property - the company does. You merely control the company in law. Understand that correctly and you are well on the way to being happy and content. Once that is understood, you then start to appreciatte the legal requirements as a director of the said company and the need to follow the law in terms of audited accounts, correct book keeping etc - all of which is required in a legally trading Thai company. So as you think with a directors hat on, you need to think where is the income for the said company and how does it generate an income for the assetts is owns. So you pay rent to the company for the property that it owns. That rent then forms the company income, from which it pays rental and corporation taxes. Needs not be a lot of money, but you must follow these principles to follow the law. The days of a company owning an assett and not doing anything are long gone and that is where you could come unstuck if you fail to understand the laws of Thailand (or anywhere else for that matter) and submit correctly audited accounts. Thai tax authorities do not like companies that do not make profits - therefore your company needs to make a profit albeit a small one and then pay some tax on those profits. I have done this for many years, been tax investigated and was thanked by the tax authorities for doing things correctly. Follow the rules and you will have no problem - but most of all change your mindset in terms of who owns the properties - NEVER say that you own the properties because you dont, you merely control the company that owns them.

[simey]

Back to the original question, the land and house ownership. If you buy a house you will then lease the land usually on a 30 year rolling lease. and that 30 year lease should be automatically extended. It seems that if the owner of the land sells the land to another person, the new owner is only forced to honour the exisiting 30 year lease and not the extension. This is the situation if you buy a house directly and lease the land.

If you start a thai company, the house and land ownership will be transferred to that company as assets, which means that the land is owned by the company and therefore (in theory) cannot be sold out from under you.

I have also heard the stories of the corrupt lawyers, make sure that the land ownership is transferred into your company name and not just the land lease as this would leave you in the same position as I mentioned above. Ask around and find a lawyer in the area you wish to buy who has a good reputation.

[astral]

Hi to all !

I am thinking of moving to Thailand , setting up a Thai company ( with 51% Thai ownership ) and purchasing a house and 2 condos . If I purchase the house , I believe I can not own the land . If this is the case , what are the chances of me losing my house , even if I " own " it ?

I mean can the 51% shareholders claim a share ? Has this ever happened ?

Or if the lease runs out , must I sell it within a year ?

Thanks for any replies !

David .

<{POST_SNAPBACK}>

With a 51% company you can own land!!

I guess the Thai shareholders could bilk you, that is why you choose a good lawyer. The usual practice to is to have signed, but undated letters of resignation

from each of the Thai partners.

Remember you could loose the lot if the government decided to move the goal posts!!

Better not to invest more here, than you are prepared to walk away from.

If you are in the Pattaya area I can recommend a lawyer with a good and long track record. PM me.

[trajan]

So as you think with a directors hat on, you need to think where is the income for the said company and how does it generate an income for the assetts is owns.  So you pay rent to the company for the property that it owns. That rent then forms the company income, from which it pays rental and corporation taxes.  Needs not be a lot of money, but you must follow these principles to follow the law.  The days of a company owning an assett and not doing anything are long gone....  Thai tax authorities do not like companies that do not make profits - therefore your company needs to make a profit albeit a small one and then pay some tax on those profits. 

<{POST_SNAPBACK}>

Digger, can the rental income enjoyed by the company be relatively nominal? also I have loaned lots of money to the company...couldnt the loan repayments from the company to me be offset by rental fees that I might pay to the company...with the result being minimal or even no taxable corporate profits....but...in any event I understand that the rental income enjoyed by the company is subject to a separate rental income tax, which can be minimal if the rent is relatively nominal right?

[Artnduen]

So as you think with a directors hat on, you need to think where is the income for the said company and how does it generate an income for the assetts is owns.   So you pay rent to the company for the property that it owns. That rent then forms the company income, from which it pays rental and corporation taxes.   Needs not be a lot of money, but you must follow these principles to follow the law.   The days of a company owning an assett and not doing anything are long gone....  Thai tax authorities do not like companies that do not make profits - therefore your company needs to make a profit albeit a small one and then pay some tax on those profits.  

<{POST_SNAPBACK}>

Digger, can the rental income enjoyed by the company be relatively nominal? also I have loaned lots of money to the company...couldnt the loan repayments from the company to me be offset by rental fees that I might pay to the company...with the result being minimal or even no taxable corporate profits....but...in any event I understand that the rental income enjoyed by the company is subject to a separate rental income tax, which can be minimal if the rent is relatively nominal right?

<{POST_SNAPBACK}>

[Artnduen]

Hi Sadako. Im new (as you probably realise). My two friends, who are british nationals are going to form a company with my thai wife, who I have been married to for 14 years. It sounds ok to me but I am not certain if only one thai can own the other 49 shares in the company. Like you, my friends are hoping to own the land and build their house on it. Any other opinions on this would be appreciated also.

[Crazy Dave]

7 partners for a company..

[Artnduen]

Thanks for the info, Dave . I guess that puts paid to my wifes plan.

[Digger]

So as you think with a directors hat on, you need to think where is the income for the said company and how does it generate an income for the assetts is owns.   So you pay rent to the company for the property that it owns. That rent then forms the company income, from which it pays rental and corporation taxes.   Needs not be a lot of money, but you must follow these principles to follow the law.   The days of a company owning an assett and not doing anything are long gone....  Thai tax authorities do not like companies that do not make profits - therefore your company needs to make a profit albeit a small one and then pay some tax on those profits.  

<{POST_SNAPBACK}>

Digger, can the rental income enjoyed by the company be relatively nominal? also I have loaned lots of money to the company...couldnt the loan repayments from the company to me be offset by rental fees that I might pay to the company...with the result being minimal or even no taxable corporate profits....but...in any event I understand that the rental income enjoyed by the company is subject to a separate rental income tax, which can be minimal if the rent is relatively nominal right?

<{POST_SNAPBACK}>

As I understand it the rent needs to be at a commerically acceptable level that will not raise eyebrows in the event of any investigation. So, from that you could assume a rent of 3000B per month on a 10 bedroom mansion with pool is somewhat below its commercial level and could end you up in trouble. How you handle director loans is more complex and how you show them in your accounts is really up to the expertise of your accountant. Of course, you have some of the capital (i.e 1,000,000 baht or 2,000,000 baht depending upon how its set up and what its owning) - but also not many people show the true value of their property asset - they use the govt std levels which are generally lower than what people actually pay. You really need to get some decent advice from a Thai accountant who is familiar with this approach and work through with them ways to structure things so that tax bill is reasonable and fair to both you and the tax authorities.

[Digger]

Hi  Sadako. Im new (as you probably realise). My two friends, who are british nationals are going to form a company with my thai wife, who I have been married to for 14 years. It sounds ok to me but  I am not certain if only one thai can own the other 49 shares in the company. Like you, my friends are hoping to own the land and build their house on it. Any other opinions on this would be appreciated also.

<{POST_SNAPBACK}>

The maximum is 49% for foreigners not the Thai owning 49%, however many articles have appeard that anything over 39% foreign ownership is refered to land office to check that the company is not a front for land ownership. Personally I would never use friends or family in this way - too many things can go wrong for various reasons on both sides - farang and Thai.

[david96]

Hi to all !

I am thinking of moving to Thailand , setting up a Thai company ( with 51% Thai ownership ) and purchasing a house and 2 condos . If I purchase the house , I believe I can not own the land . If this is the case , what are the chances of me losing my house , even if I " own " it ?

I mean can the 51% shareholders claim a share ? Has this ever happened ?

Or if the lease runs out , must I sell it within a year ?

Thanks for any replies !

David .

<{POST_SNAPBACK}>

Imay have interpreted the posts incorrectly but how can one control a company with only 49% ownership?

[mbkudu]

Hi to all !

I am thinking of moving to Thailand , setting up a Thai company ( with 51% Thai ownership ) and purchasing a house and 2 condos . If I purchase the house , I believe I can not own the land . If this is the case , what are the chances of me losing my house , even if I " own " it ?

I mean can the 51% shareholders claim a share ? Has this ever happened ?

Or if the lease runs out , must I sell it within a year ?

Thanks for any replies !

David .

If you're a US citizen you can own a business 100% but I'm not sure how that would equate to purchasing a house. I'm pretty sure it means nothing when land is involved.

[Digger]

Hi to all !

I am thinking of moving to Thailand , setting up a Thai company ( with 51% Thai ownership ) and purchasing a house and 2 condos . If I purchase the house , I believe I can not own the land . If this is the case , what are the chances of me losing my house , even if I " own " it ?

I mean can the 51% shareholders claim a share ? Has this ever happened ?

Or if the lease runs out , must I sell it within a year ?

Thanks for any replies !

David .

<{POST_SNAPBACK}>

Imay have interpreted the posts incorrectly but how can one control a company with only 49% ownership?

<{POST_SNAPBACK}>

It depends upin how the company is set up. An example which should be very easy to relate to. Say you as an individual own shares in GE, IBM, BP etc - but that does not give you ANY authority to make decisions for the company - those decisions are made by the directors of the company regardless of how much stock if any they have. Similar with owning a company in Thailand. The Directors control and run it even if they had virtually no shareholding in law. Into the articles of the company, you could for example build a requirement that for any director to be removed by shareholders, that they needed a 80% majority of shareholders to agree to carry the decision. However if you have 30%, you can block all the other shareholders on every decision.

If you really wanted to protect bigger investments you could also set up a holding company which owns some stock in the subsidiary that actually owns a property. If they have 30% of the stock as a Thai legal holding company and you as an individual shareholder had another 39%, together you control 69% of the stock and have an absolute majority. Another way is to create 2 tiers of stock, ordinary and preference. Preference stock may carry voting rights 10* greater than ordinary stock. Many generation old family dynasty's are controlled in this way. The heirs of the original founding family may have only 10% of common stock but if they have preference stock they can effectively use that to keep absolute control of the company, purely because that preference 'vote' is 10 X greater than ordinary stockholders votes.

[xbusman]

You posted "can I really lose everything?" and here is the answer I have gotten for ten years from people who know. YES

You have no rights here, you are not a resident or even a guest. You are tolerated as long as you meet the minimum investment requirements. The Thai government for any reason or indeed for no reason could knock on your door, take you by the hand to Don Muang and send you off with the clothes on your back. Just like Astral wisely said, never ever invest more here than you are willing to walk away from. I have heard this from anyone who has been here long enough and is willing to be honest.

That doesnt mean you should not invest. Lots of farangs have invested and made far better returns than they could have made at home. At the end of the day however, it better be your milk money and not your life savings.

[Doctor John]

Just like Astral wisely said, never ever invest more here than you are willing to walk away from.

<{POST_SNAPBACK}>

Good advice,

I see some guys building very expensive houses that they will have to walk away from if it all go's pearshaped, Ok if you are loaded I guess, but I have known guys spend nearly everything they have on a house, then they get all resentful cos they cannot own it, although they knew that from the outset.

I am not rich enough to pay 3 - 4 million baht for a house I will never own, and it must be a real bummer when you lose it, 5-600,000 Baht is ok for me.

And make sure your car or truck is in your name or you will lose that at the same time you lose your house.

Bottom line is , don't invest more than you are comfortable with losing if you have to walk away. It will save you a lot of sleepness nights if you stick to that formula.

[astral]

Hi to all !

I may have interpreted the posts incorrectly but how can one control a company with only 49% ownership?

<{POST_SNAPBACK}>

The company setup will define who has the right to make decisions and sign on behalf of the company.

You- the MD will be that person.

[paulfr]

Imay have interpreted the posts incorrectly but how can one control a company with only 49% ownership?

One way is to have say 5-7 acquaintances each have 8-10% shares in the company. With you holding 49%, all you would need is to have one vote with you on all decisions. If you make sure they do not know each other, i.e. one friend from work, one from pool hall, one from one bar, one from another bar, etc., then a conspiracy to all get together and vote against you is very unlikley. And with no connection to your wife or family, they have no personal motives to cross you.