Buying A House Incl Company

[cdmtdm]

What is the consensus on buying an existing house that comes with a company included in the price? , what are the loop holes or traps to look for when taking this path ??

Cheers

CdM

[richardt1808]

Hi,

Setting up a company and then having the company purchase a house, is a route that some foreigners have chosen to take to try and circumvent the land ownership rules in Thailand. This is not a recommended thing though, because where the sole purpose for the existence of the company is to provide a 'cover' for the land ownership by a foreign shareholder, then it is illegal.

There have been quite a few threads on this topic here recently and the powers that be have announced that they intend to scrutinize these companies more closely in future and the dreaded 'crackdown' word has even been mentioned. Legal minds on this forum are of the opinion that this is definitely a thing to steer clear of. If you want to own property, there are other routes such as 30 year leases and usufructs which are legal and will lawfully give you use of land. Do a search of these terms to read about it in more detail.

Another thing to consider when buying a company, is that when you buy it, you will be responsible for annual financial statements and administration fees and if the company has any previous unpaid debt, you will also be responsible for that; so best investigate the company fully before you do anything.

The concensus of opinion here is that you should avoid trying to own property here; or at the very least, do not invest anything more than you are prepared to totally walk away from should things go bad.

Cheers

[LennyW]

In answer to the OP's question....

Buying a house with an existing company is usually straight forward as you will only be changing Managing Director. Just make sure your lawyer has done due dilligance to ensure company is clean and free of debt.

Totally different scenario from trying to form a "new" company to own property.

[Gary A]

The best thing I see is for the seller. If he is out from underneath the company, he will be able to sleep nights. Waiting for a Thai politician to take action against these bogus companies would be a MAJOR worry for me.

[cdmtdm]

The best thing I see is for the seller. If he is out from underneath the company, he will be able to sleep nights. Waiting for a Thai politician to take action against these bogus companies would be a MAJOR worry for me.

Thanks for the replies , however the old owner will not be concerned as he is dead and sleep is not an issue ..... as for the Thai politicians changing the rules i ask why would they ??? what benefit would that be to anyone ??

[cdmtdm]

In answer to the OP's question....

Buying a house with an existing company is usually straight forward as you will only be changing Managing Director. Just make sure your lawyer has done due dilligance to ensure company is clean and free of debt.

Totally different scenario from trying to form a "new" company to own property.

Thanks for the reply , i have an existing company with other rental properties this one is a deceased estate , the MD changed to the executor prior to the death and comes with the property , i have a check being done re your suggestions , it seems ok , farang owned , 2mill shares etc ...but will wait for confirmation ..... need to also find out about the benefit of closing this company to transfer over to the existing to save the admin costs ...suggestions ????

[inmysights]

The best thing I see is for the seller. If he is out from underneath the company, he will be able to sleep nights. Waiting for a Thai politician to take action against these bogus companies would be a MAJOR worry for me.

Thanks for the replies , however the old owner will not be concerned as he is dead and sleep is not an issue ..... as for the Thai politicians changing the rules i ask why would they ??? what benefit would that be to anyone ??

Are you absolutely sure the old owner is dead? Seems a strange thing to ask, I know, however a neighbour was taken to hospital following a serious car accident, and whilst there, a 'friend' had entered her property and stole her Chanote and Company documents. This 'friend' then listed her property with many local real estate agents, telling everyone she was dead and that he was her sole benificiary! Some 'friend'

Took her months to sort out. There were apparently some 'potential buyers' looking for a super cheap deal and let their greed cloud their judgment. It's amazing how many farang here are willing to invest large sums of money without taking the trouble to engage an independent lawyer to carry out due diligence.

[inmysights]

Well the OP seems to have disappeared, probably scuttled off to find a good lawyer

For anyone finding themselves in a situation where the 'vendor' openly states he/she is not the original owner of the property, I would strongly advise that, in the case of the original owner being 'dead', insist on seeing the original Death Certificate, along with the original Company Documents and check the names are the same. If this 'vendor' is truly the Executor, he/she will certainly have these to hand.

In the case of the 'vendor' stating they'd come by the property by some other means, such as 'they were given it' for whatever reason, an official document in the form of a Transfer or Thai equivalent of a Deed of Gift with substantiating documentation should be produced. It is not possible to simply 'give' a Honda Dream without proper transfer of ownership, let alone a house.

It's amazing how many farang here leave their brains at the airport. This country has as many, if not more laws, than their home countries. They seem to think the somewhat lax implementation of certain laws in certain areas gives them carte blanche to pick and choose. Be careful your Sale of the Century doesn't turn into Too Good to be True, and come back to bite you in the ass.

If you choose to ignore your own due diligence, by way of a good independent lawyer or at the very least yourself carrying out the simple steps above, (your estate agent was very likely Bill the Barkeep or Noi from the fish counter in Tops last week) then you could find youself in the dock along with the crook who 'sold' you the property. And quite rightly so IMHO.

[Naam]

The best thing I see is for the seller. If he is out from underneath the company, he will be able to sleep nights. Waiting for a Thai politician to take action against these bogus companies would be a MAJOR worry for me.

Thanks for the replies , however the old owner will not be concerned as he is dead and sleep is not an issue ..... as for the Thai politicians changing the rules i ask why would they ??? what benefit would that be to anyone ??

because the resident farang experts say so. since years these experts whistle the same old tune over and over again, forecast apocalyptic crackdowns on foreign criminals who initially bring loads of money into the country to buy properties, provide employment and keep on moving dollar, pounds and euros to Thailand to pay for their living expenses until their properties are confiscated and distributed among poor Thais and the criminals deported after serving 20 years of hard labour in a prison camp

most of them remind me of the Fox and the Sour Grapes:

"The Fox and the Grapes is a fable attributed to Aesop.

One hot summer's day a Fox was strolling through an orchard till he came to a bunch of Grapes just ripening on a vine which had been trained over a lofty branch. "Just the thing to quench my thirst," quoth he. Drawing back a few paces, he took a run and a jump, and just missed the bunch. Turning round again with a One, Two, Three, he jumped up, but with no greater success. Again and again he tried after the tempting morsel, but at last had to give it up, and walked away with his nose in the air, saying: "I am sure they are sour."

It is easy to despise what you cannot get (afford)."

[cdmtdm]

The best thing I see is for the seller. If he is out from underneath the company, he will be able to sleep nights. Waiting for a Thai politician to take action against these bogus companies would be a MAJOR worry for me.

Thanks for the replies , however the old owner will not be concerned as he is dead and sleep is not an issue ..... as for the Thai politicians changing the rules i ask why would they ??? what benefit would that be to anyone ??

because the resident farang experts say so. since years these experts whistle the same old tune over and over again, forecast apocalyptic crackdowns on foreign criminals who initially bring loads of money into the country to buy properties, provide employment and keep on moving dollar, pounds and euros to Thailand to pay for their living expenses until their properties are confiscated and distributed among poor Thais and the criminals deported after serving 20 years of hard labour in a prison camp

most of them remind me of the Fox and the Sour Grapes:

"The Fox and the Grapes is a fable attributed to Aesop.

One hot summer's day a Fox was strolling through an orchard till he came to a bunch of Grapes just ripening on a vine which had been trained over a lofty branch. "Just the thing to quench my thirst," quoth he. Drawing back a few paces, he took a run and a jump, and just missed the bunch. Turning round again with a One, Two, Three, he jumped up, but with no greater success. Again and again he tried after the tempting morsel, but at last had to give it up, and walked away with his nose in the air, saying: "I am sure they are sour."

It is easy to despise what you cannot get (afford)."

Very True .............. well done

[Gary A]

The best thing I see is for the seller. If he is out from underneath the company, he will be able to sleep nights. Waiting for a Thai politician to take action against these bogus companies would be a MAJOR worry for me.

Thanks for the replies , however the old owner will not be concerned as he is dead and sleep is not an issue ..... as for the Thai politicians changing the rules i ask why would they ??? what benefit would that be to anyone ??

because the resident farang experts say so. since years these experts whistle the same old tune over and over again, forecast apocalyptic crackdowns on foreign criminals who initially bring loads of money into the country to buy properties, provide employment and keep on moving dollar, pounds and euros to Thailand to pay for their living expenses until their properties are confiscated and distributed among poor Thais and the criminals deported after serving 20 years of hard labour in a prison camp

most of them remind me of the Fox and the Sour Grapes:

"The Fox and the Grapes is a fable attributed to Aesop.

One hot summer's day a Fox was strolling through an orchard till he came to a bunch of Grapes just ripening on a vine which had been trained over a lofty branch. "Just the thing to quench my thirst," quoth he. Drawing back a few paces, he took a run and a jump, and just missed the bunch. Turning round again with a One, Two, Three, he jumped up, but with no greater success. Again and again he tried after the tempting morsel, but at last had to give it up, and walked away with his nose in the air, saying: "I am sure they are sour."

It is easy to despise what you cannot get (afford)."

Khun Naam, it is obvious that you have some sort of complicated "ownership" method and it is possible that the law will never question your ownership. It is also possible that your investment will be questioned and also possible that it would have to be sold or confiscated. Will the government punish you in any way? I agree that is not likely other than a major headache and financial punishment.

Better you than me to be in that situation. Other than a condo in my name, all other land and the house is in my wife's name. If my wife were to throw me out, my property would be instantly gone. That said, I wouldn't miss any meals. If the worst were to happen, you would be in a legal battle. I'd rather be able to walk away than to do battle with a corrupt government.

[Naam]

Khun Naam, it is obvious that you have some sort of complicated "ownership" method and it is possible that the law will never question your ownership. It is also possible that your investment will be questioned and also possible that it would have to be sold or confiscated. Will the government punish you in any way? I agree that is not likely other than a major headache and financial punishment.

Better you than me to be in that situation. Other than a condo in my name, all other land and the house is in my wife's name. If my wife were to throw me out, my property would be instantly gone. That said, I wouldn't miss any meals. If the worst were to happen, you would be in a legal battle. I'd rather be able to walk away than to do battle with a corrupt government.

my ownership is not complicated at all. my wife and me own the house, but we don't own the land on which the house is built. it has cost me a sh*tload of money and hassle to rectify my initial mistake having -besides the land- the house in a company's name too. my "investment" cannot be questioned as i consider the roof over my head -unlike others- not as an investment but a necessity which meets our demands. circumventing a forced sale would be easy to accomplish. confiscation by the government is highly unlikely but should this unlikely event materialise then the time has come to leave Thailand anyway. i don't comment on your "corrupt government" because i am neither in a position to judge nor is it my business to judge the government of the host country which made it possible that i saved until now a rather substantial amount by not paying any income tax.

what i know is that Thailand's politicians are not stupid although the resident experts insinuate they are. but then (most of) the resident experts also spread the gospel that Thais in general are despicably lazy, stupid, arrogant [insert a dozen or more derogatory adjectives] Farang hating individuals who's favourite pastime is to charge Farangs double the fare on baht buses or apply "racism" whenever it is possible.

from any rational point of view it would be stupid² to expropriate foreigners. as stupid as roasting a goose for a one time meal which lays for years to come cash instead of eggs. having said so i would like to point out that (like you) i wouldn't miss a meal if i lost my home but it goes without saying that i would grind my teeth.

[Gary A]

Khun Naam, I'm glad to hear that you have seen fit to protect your home. Years ago I wanted to buy some beach front land and planned to eventually build a home there. The first thing I found out was that the land was not titled. Of course I was told that was no problem. After finding another suitable plot of land with a chanote, I was told I could buy the land through a Thai company and that would be perfectly safe. Due diligence discovered that I must be very careful and not trust most lawyers or real estate agents. I then decided that a 30 plus 30 plus 30 year lease was the best I could do. I still thought after finding out the maximum legal lease was thirty years, that it was quite safe. After giving that considerable thought, I decided that I would likely eventually get married and that when the lease expired, my wife would have nothing.

I did need a place to live and renting never appealed to me so I bought a condo. Living there wasn't bad while I was still single. I am at heart a country bumpkin and craved a workshop and some land. After I was satisfied that my then girlfriend was a good one, we married mostly so I could file a joint income tax return. When I asked her if she wanted to get married, her answer was, "WHY?" After I told her it would save me some money on taxes she was satisfied that was a good idea.

Leasing land from a spouse is not safe and other avenues didn't look good either. After I was satisfied she could put up with me, we moved upcountry and I bought several plots of land, signed the papers that I had no financial interest in the properties and they are in her name. At this point, being that she has put up with me quite a while now, I figure she deserves the properties even if she does throw me out. I do love my wife and would be heartbroken if we were to end the relationship. Losing the property wouldn't bother me nearly as much as the breakup.

[Naam]

After I was satisfied she could put up with me, we moved upcountry and I bought several plots of land, signed the papers that I had no financial interest in the properties and they are in her name. At this point, being that she has put up with me quite a while now, I figure she deserves the properties even if she does throw me out. I do love my wife and would be heartbroken if we were to end the relationship. Losing the property wouldn't bother me nearly as much as the breakup.

from all indications (i refer not only to this but to your various other postings) you found a rather rare diamond Gary and i am convinced you did the right thing.