Houses In The "Company Name", Is It Safe?

[Langsuan Man]

The only thing that I dont understand is why the government doesnt just introduce 99 year leases (and tax them accordingly). This would cover nearly all buyers' needs, even those with young families who want to be sure to pass something on. I suppose the assumption is that a new Thai house will not last more than 30 years anyway, so there is no need to plan further ahead.

The reason is simple, just think of how many lawyers, accountants, developers, etc. are making money off of these "nominee" companies. So those in charge are not about to upset the apple cart with 99 year leases

Q,1 Is it true that in order to purchase your Company as a Farang,you need six Thai Directors?

No, the number of directors is one, and you become the director after the land (chanote) is recorded in the name of the company. The number of share holders can be anywhere from 3 to unlimited, but 3 is the most convenient number due to the percentages described below

Q,2 Is it also true,you can only own 49% of your said Company?

Yes, you own 49% of the shares in the company and control the company by being the Director (ie.signature authority)who has the majority of shares

Q.3 Is "Your House" Purchased through the Company "Yours" or a Company Asset?

It is a company asset, so that when you sell it, you sell the company with it

[Khun Jean]

You really dont need to worry about the questions relating to liquidation because the simple answer is that a foreigner cannot legally own land in Thailand, even by subterfuge.

The closest that farangs get to owning land is to create/buy a company of which they can only own 49%. This company owns the land (and house) as a company asset.

As talked about this many times it is possible to own a house (building) separate from the land. The company can thus own the land give a lease for the land and the person can own the house.

The only safe way to own a house in Thailand is to lease some land and build a house with the correct building permissions in your name. You then own the house and have a secure tenancy on the land for 30 years, and possibly a second 30 years if you live that long. As a farang you will NEVER own the land yourself and anyone who tells you that you can is a liar.

Only the 30 years you can count on, the second term will be under new terms that in most if not all cases will not be considered "fair". A usufruct is often better as the period can be longer, and with the right contract leases are a possible way to recoup money

The only thing that I dont understand is why the government doesnt just introduce 99 year leases (and tax them accordingly). This would cover nearly all buyers' needs, even those with young families who want to be sure to pass something on. I suppose the assumption is that a new Thai house will not last more than 30 years anyway, so there is no need to plan further ahead.

99 year leases will make everything a lot more expensive. Another option would be to make renewable rights real rights so if the landowner sells a piece of land those renewable clauses are still valid. Another would be to get rid of the "no need to register" for leases with a maximum duration of 3 years. This if often the main obstacle, longer leases would be more common without that rule.

Edited May 22, 2011 by Khun Jean

[Darrel]

As talked about this many times it is possible to own a house (building) separate from the land. The company can thus own the land give a lease for the land and the person can own the house.

Yes indeed. But I am not convinced of the advantage of owning a house but not the land it is built on. Personally I would want it all.

A usufruct is often better ......

Yes. Another possible alternative.

99 year leases will make everything a lot more expensive. Another option would be to make renewable rights real rights so if the landowner sells a piece of land those renewable clauses are still valid. Another would be to get rid of the "no need to register" for leases with a maximum duration of 3 years. This if often the main obstacle, longer leases would be more common without that rule.

Yes, though I am not convinced that 99 year leases would necessarily increase costs that much, and certainly not as time progresses and leases of varying duration start to change hands. But the property market here is so artificial that it is hard to guess what might happen when any of the goalposts move.

All a bit hypothetical though. I cant remember ever seeing a house for sale advert in Pattaya that didnt say either "company" or "Thai" underneath. And that's surely the bottom line.

[Naam]

Khun Jean:

As talked about this many times it is possible to own a house (building) separate from the land. The company can thus own the land give a lease for the land and the person can own the house.

Darrel:

Yes indeed. But I am not convinced of the advantage of owning a house but not the land it is built on. Personally I would want it all.

the decision whether it is an advantage or not should be left to the individual who, e.g. wants to live in a home built to his specific demands and specifications. "outsiders" who have no idea what these demands are should not and cannot judge the decision.

[Darrel]

the decision whether it is an advantage or not should be left to the individual who, e.g. wants to live in a home built to his specific demands and specifications. "outsiders" who have no idea what these demands are should not and cannot judge the decision.

Precisely why I gave my personal opinion and clearly qualified it as such.

I have mine, you have yours, and Joe Public has his. And none of them is worth any more than any other.

Or arent opinions allowed any more?