Setting Up Thai Company

[mmail2you]

I am in the process of buying a condo and I am going to purchase it under a thai comapny name so I wanted to find out is there a best practice on setting up the company ?

1. Can I get the company setup so the contract states I have loaned the company the money for the purchase of the Condo so therefore the company and it's directors own myself the money ?

2. I understand there must be a certain amount of Thai directors and I can own 49% of the company but I also can get them to sign over operating authority to myself so I make all decisons and they have no authority or power ? correct

[SunbeltAsiaExpert]

Foreigners are eligible to acquire a condominium unit on an individual basis with the following obligations:

· The full amount of the purchase price must be transferred from an overseas account into Thailand and the transfer itself needs to identify the nature of this transfer (i.e. if you are acquiring 10 Million Baht condominium unit, the land office expects you to transfer no less than 10 Million Baht from your offshore bank account into your Thai personal bank account and specify the purpose of the transfer [e.g. To purchase a condominium unit at ....(providing full detail of the condo’s location)....]. When the name of transferor and the transferee are not identical, we recommended that you amend the designation of the transfer to read, “To purchase a condominium unit at ....(providing full detail of the condo)....in the name of ....(providing the name of the buyer)....]. Overseas funding must be verify by your local Thai Bank through “Foreign Exchange Transaction Form” also known as “Thor Tor 3”.

· The Foreign Quotas limit must also be adhered to by the purchaser. The law states that 49% of the total area within the condominium building is allowed to be owned by Foreigners (e.g. if a condominium building of 100 rooms with exactly the same size, 49 of the 100 units are eligible to be owned by foreigners).

If any one of the above obligations cannot be met, the Land Office will not permit the Condominium Unit Ownership Transfer to take place.

In the case if the Buyer wishes to acquire the condominium through a juristic entity’s name (i.e. a corporation) The foreigner can own up to 49% of the total equity within the designated company as a shareholder. A foreigner is eligible to be appointed as the sole authorized director of the company.

Coming around to some specifics in your question, it is strongly recommended that the Registered Capital of this designated company must at least match with the Declared Purchase Price. As the Registered Capital reflects the amount of money/funding available within the company, if you showed that you (as the foreigner) lent the company some money to acquire the condominium, the official would likely question the nature/source of these funds that the company has borrowed from their foreign shareholder/director. The land officer may feel that this company should thus be classified as foreign company and would therefore refuse to permit the condominium owner to transfer the property into the company’s name. In addition, the officer may request documentary evidence from your Thai shareholder(s) that they have in fact paid up for their share of the purchase price.

Do you have any questions about getting a Visa for travel/business/retiring/investing in Thailand? Please "ask the visa expert" from Sunbelt Asia here: Thaivisa.com - Ask the Visa Expert from Sunbelt Asia

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You can contact Sunbelt Asia at (66)2-642-0213 or email us here. Please visit our website for more information on doing business, working, investing, travelling, owning real estate, or starting your own business in Thailand at www.sunbeltasiagroup.com. We are located at 1 Ratchadaphisek Rd., Floor 26, Bangkok, Thailand 10400 and can easily be reached by public transportation.

*This does not constitute legal advice or serve as a substitute for direct legal consultation with a licensed attorney. The information is provided for educational purposes only and it may not account for the specific facts and laws that may be applicable to each individual's situation. Also, there may be changes in the law that may affect your specific case so the answers provided here should not be considered to be applicable your personal situation.

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