Buying A Condo In Company Name?

[balo]

I have been offered to buy a new condo and the difference between foreign ownership and thai ownership is 300k .

However the real estate agent have informed me that I can buy the condo in a company name , paying 20k to a lawyer to set it up.

Is this legal and will I have a lot of problems doing this ? Im trying to save 300k here.

Thanks

[trogers]

Im trying to save 300k here

How much will it cost you annually to keep the company alive? Audit financial books' date=' tax declaration, property tax, etc...

Will you have any problem selling the condo unit by selling the company? If buyer turns down buying the company, taxation on the company selling the condo unit will be high, plus cost to close the company thereafter...

When you consider the above, is there any cost savings?

[b']

[/b]

Edited January 5, 2011 by trogers

[huawei]

your estate agent should be giving you better advise. 20+ to create a company, monthly vat returns, annual accounts, audit 30+k annually, if close company 50+k.

Correctly pointed out - if condo transferred on dissolution of company, significant taxes.

Why limit the population you can sell to, get in foreign name that in itself will add value to the selling price.

Plus all the issues of company structures and you only owning a minority share, who will be the other shareholders?

Don't do it, not worth it for 300k.

Edited January 5, 2011 by huawei

[balo]

your estate agent should be giving you better advise. 20+ to create a company, monthly vat returns, annual accounts, audit 30+k annually, if close company 50+k.

Correctly pointed out - if condo transferred on dissolution of company, significant taxes.

Why limit the population you can sell to, get in foreign name that in itself will add value to the selling price.

Plus all the issues of company structures and you only owning a minority share, who will be the other shareholders?

Don't do it, not worth it for 300k.

Thanks for the advice , I was afraid of this .

They never tell you the whole truth do they , I will pay the 300k extra to avoid all the headaches.

[donx]

your estate agent should be giving you better advise. 20+ to create a company, monthly vat returns, annual accounts, audit 30+k annually, if close company 50+k.

Correctly pointed out - if condo transferred on dissolution of company, significant taxes.

Why limit the population you can sell to, get in foreign name that in itself will add value to the selling price.

Plus all the issues of company structures and you only owning a minority share, who will be the other shareholders?

Don't do it, not worth it for 300k.

Thanks for the advice , I was afraid of this .

They never tell you the whole truth do they , I will pay the 300k extra to avoid all the headaches.

There is a reason why foreign ownership costs 300k more. Because a foreign owned condo has more resale potential. Pay the extra 300k and be glad you can actually own it outright.

[trajan]

I bought my first condo via a Thai holding company not because of the foreign quota issue (there was plenty of foreign quota left in that building), but because: [a] I had a large lump sum of Baht already in country (and did not want to import USD or GBP) and I needed a Baht denominated mortgage loan for the remainder from HSBC Bangkok.

The holding company cost about 20K to open and annually about 8K. (By the way, there are no monthly VAT returns on a holding company). I was lucky to have a friend help me with this process.

Im really glad I did that because I immensely enjoyed that condo unit, managed to very early pay-off the mortgage loan and then subsequently sold the condo (to a foreign buyer) for a profit. The foreign buyer asked to just buy shares of the holding company (to avoid paying the condo title deed transfer fees, etc. at the land office) but I just wanted to sell the condo title deed directly and keep the holding company for later use.

Im keeping the holding company just in case I need it in future if an opportunity arises (and there is no time to wait to open a new one). [it costs more to maintain my credit cards annually.]

I have since bought and sold several condos (in my personal name), but that first condo was really a good experience and booster and got me on my way.

In light of the foregoing, I think in certain circumstances, it is not entirely correct to dismiss a holding company out of hand.

Edited January 7, 2011 by trajan

[huawei]

I bought my first condo via a Thai holding company not because of the foreign quota issue (there was plenty of foreign quota left in that building), but because: [a] I had a large lump sum of Baht already in country (and did not want to import USD or GBP) and I needed a Baht denominated mortgage loan for the remainder from HSBC Bangkok.

The holding company cost about 20K to open and annually about 8K. (By the way, there are no monthly VAT returns on a holding company). I was lucky to have a friend help me with this process.

Im really glad I did that because I immensely enjoyed that condo unit, managed to very early pay-off the mortgage loan and then subsequently sold the condo (to a foreign buyer) for a profit. The foreign buyer asked to just buy shares of the holding company (to avoid paying the condo title deed transfer fees, etc. at the land office) but I just wanted to sell the condo title deed directly and keep the holding company for later use.

Im keeping the holding company just in case I need it in future if an opportunity arises (and there is no time to wait to open a new one). [it costs more to maintain my credit cards annually.]

I have since bought and sold several condos (in my personal name), but that first condo was really a good experience and booster and got me on my way.

In light of the foregoing, I think in certain circumstances, it is not entirely correct to dismiss a holding company out of hand.

Hi

That is ineresting.

I am convinced most people who bought through a thai company a few years ago didn't really understand the implications of what they were doing and it became a method which was made acceptable by developers and estate agents to drum up sales and to circumvent the law. Your case seems different and costs lower than the norm.

I was just wondering how you structured your set-up. Agreed a holding company doesn't do vat returns but a holding company by definition has one or more operating companies under its umbrella and therefore has a cost attached.

Even if you have significant amounts of Baht in your bank account,there are ways to secure a FET form for the land department without sending funds out.

As for the loan why was a holding company required by HSBC, when almost all loans required by banks here in Thailand are personal guarantees.

Why have you not used the same method subsequently when purchasing condos was it purely for securing a loan?

I still expect you would have made more profit the conventional way.

Bottom line is: If its in your name you own it.

[trajan]

I was just wondering how you structured your set-up. Agreed a holding company doesn't do vat returns but a holding company by definition has one or more operating companies under its umbrella and therefore has a cost attached.

by holding company, I mean a company which holds assets...I guess another way to describe it would be an SPV (single purpose vehicle)...its a Thai entity, but I control it (not through nominees but through different classes of shares plus sole directorship)....

Even if you have significant amounts of Baht in your bank account,there are ways to secure a FET form for the land department without sending funds out.

it would not have mattered, that amount was only about half of the purchase price..the land office requires an FET form or forms for the entire purchase price

As for the loan why was a holding company required by HSBC, when almost all loans required by banks here in Thailand are personal guarantees.

the HSBC officer, who visited me at my office advised that the Thai holding company could be the borrower and I personally would the guarantor of the loan....all documents signed at my office..very convenient...

[trajan]

Why have you not used the same method subsequently when purchasing condos was it purely for securing a loan?

cash flows MUCH better subsequent to that initial transaction....also received a permanent resident book in the interim, so Baht remittance issues became irrelevant

I still expect you would have made more profit the conventional way.

If I did not use a holding company in the initial transaction, the transaction would not have happened and I would have had ZERO profit..

Bottom line is: If its in your name you own it.

holding assets personally or through Thai or offshore holding companies is normal...in fact several friends hold condos here through BVI companies and they have sold some offshore just by selling the shares of the BVI company...no need to even bother with the Thai Land office and their bureaucracies....

[huawei]

Why have you not used the same method subsequently when purchasing condos was it purely for securing a loan?

cash flows MUCH better subsequent to that initial transaction....also received a permanent resident book in the interim, so Baht remittance issues became irrelevant

I still expect you would have made more profit the conventional way.

If I did not use a holding company in the initial transaction, the transaction would not have happened and I would have had ZERO profit..

Bottom line is: If its in your name you own it.

holding assets personally or through Thai or offshore holding companies is normal...in fact several friends hold condos here through BVI companies and they have sold some offshore just by selling the shares of the BVI company...no need to even bother with the Thai Land office and their bureaucracies....

Hi

Thanks for the replies., much appreciated and very informative,and as you rightly point out if you had not done otherwise your profit would have been zero.

[pkrv]

There is a reason why foreign ownership costs 300k more. Because a foreign owned condo has more resale potential. Pay the extra 300k and be glad you can actually own it outright.

Damm donx are you meant to be succinct and accurate at the same time? - I'm not sure if this is allowed on Thaivisa!

Edited January 7, 2011 by pkrv

[pkrv]

I bought my first condo via a Thai holding company not because of the foreign quota issue (there was plenty of foreign quota left in that building), but because: [a] I had a large lump sum of Baht already in country (and did not want to import USD or GBP) and I needed a Baht denominated mortgage loan for the remainder from HSBC Bangkok.

The holding company cost about 20K to open and annually about 8K. (By the way, there are no monthly VAT returns on a holding company). I was lucky to have a friend help me with this process.

Im really glad I did that because I immensely enjoyed that condo unit, managed to very early pay-off the mortgage loan and then subsequently sold the condo (to a foreign buyer) for a profit. The foreign buyer asked to just buy shares of the holding company (to avoid paying the condo title deed transfer fees, etc. at the land office) but I just wanted to sell the condo title deed directly and keep the holding company for later use.

Im keeping the holding company just in case I need it in future if an opportunity arises (and there is no time to wait to open a new one). [it costs more to maintain my credit cards annually.]

I have since bought and sold several condos (in my personal name), but that first condo was really a good experience and booster and got me on my way.

In light of the foregoing, I think in certain circumstances, it is not entirely correct to dismiss a holding company out of hand.

Hi Trajan - great post - I can see what you did on the FX side (funds into Thailand) - IMO good move - but complex - some people could come a cropper if they just read this, and simply assumed.