How Long To Set Up A Thai Limited Company?

[haveaniceday]

How long does it take for a Company to be set up, so it can buy some land?

"All Thai limited companies will be investigated if the foreigner invests from 40% or higher but is not a foreign company or a business that has the foreigner as the authorized director who can act on behalf of the company, if the investment was made in the form of money, the Thai shareholders shall submit the proof showing the source of the invested money from the Thai shareholder. The proof may be a copy of a bank account book or copy of a bank statement of the latest 6 months, a document issued by the bank certifying the financial status of each Thai shareholder, or other proof showing the source of the investment. This proof is needed to be submitted together with the application form of the business registration. The evidence shall contain the details that are harmonious with the investment. If the proof is not satisfied to the Registrar, the Registrar shall deny registering the business."

OK, I have been told for a Thai to set up a company, Thai to own the company when the company buys some land, then the Foreigner buys 49% of the company and then "The implementation of this structure changes the voting rights of the majority Thai shareholding to 10 shares = 1 vote. The foreign owned shares would remain 1 share = 1 vote thereby giving the foreigner a voting supermajority, and full control over all aspects of the company and investment. " (Sunbelt)http://www.sunbeltlegaladvisors.com/Thailand-Company-Limited.php

Actually the Sunbelt Summary in blue on the right side of the page has some good information.

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Below from Siam Legal

Although Thai Law stipulates that a foreigner may not own land in Thailand, there is an alternative step of owning a land in Thailand. This involves registering a Thai Limited Company. A Thai Limited Company means that 51% or more of the company must be owned by Thai Shareholders (the remaining shares maybe held my non-Thais. This Thai company may then legally purchase land in Thailand.

We recommend that foreign investors to form a Thai Company Limited as the Articles of Association of this form of Company can be varied to allow greater protection for foreign minority shareholders where majority Thai Ownership is required under the applicable Law.

The Article of Association can be changes to authorize the foreigner to be the sole director of the company, and the only person of the company who can commit or bind the company in any contractual dealing (buying or selling land), effectively giving the minority shareholders control over the company. By following the above procedures the foreigner would control the company and the company owns the land, for this there is no need of recorded funds from overseas.

http://www.siam-legal.com /realestate/thailand-title-deeds.php (remove the space to make it work)

[haveaniceday]

As I keep reading, I have more queries,

What would be the tax ramifications if a company bought some land and thats all it ever did?

I mean, it did trade once of course, making a purchase, you just need to do a annual audit, some say average about 8k a year for the audit.

Would you run all the bills through the company? It's not like it has rental income as such.

If the company didn't turn over more than 1.8mill baht a year, I presume the company would not need to be registered for VAT?

Does the company need staff ? Does being a director mean the company needs to be registered for Thai Social Welfare - for " Employees " ?

How long does the setting up process take?

I am kind of thinking out loud, but I am sure there are many here who would be interested now and for later.

[clinique]

Despite 'advice' given by some legal practitioners... using a Thai company to buy land and the Thai shareholders as nominees is strictly by the law, illegal. The Thai shareholders must own 61% (not 51%) AND prove that the money used to buy the property/fund the company was provided by them and not the foreigner. many land departments now enforce this 61/39 rule and the 'proof of origin of funds' rule as well.

The company route has long been used as away "around" the ownership restriction but it is not foolproof. It just hasnot been enforced to the letter of the law.

In addition the concept of "nominee" is not recognised in Thailand so if you give Thai shareholders 61% of your company they are by law legal owners of that 61%.

I know of several cases where the Thai nominee 'fell out' with the foreign partners and the Thai ended up being the owner of the property.

That being said there are methods where you can protect your interest but it doesnt lie solely in the Thai company route.

Great care should be exercised.