House Rental Business

[NotaNutter]

I'm thinking of buying another house to rent out as a side business. I'm fairly familiar with the land ownership laws here, and I am wondering if the following arrangement is 100% legal (I think it is, but would welcome any comments).

Concept:

1. Set-up a company to buy the house with a shareholding of 39% myself and 61% my Thai wife (with myself as the sole director/signatory).

2. Buy the house in the company name.

3. Rent the house out to paying tenants with rent paid to the company, all properly declared with yearly accounts, paying tax, etc.

I think this is 100% legal because (officially):-

1. The 61% is not held by "nominees" as a way to circumvent the land ownership laws. Instead the 61% is held by my wife as we are partners in the business as husband and wife.

2. The business is legitimately trading (not a shell company).

Any comments would be welcome.

Edited November 15, 2005 by NotaNutter

[terdsak_12]

Just buy a house and rent it out mate, it'll be in your missus name one way or another anyway. I doubt Thais who rent out houses pay much if any taxes on their properties.

[COBBER]

Most here dont pay the taxes. So if you pay all of the taxes you will find that it is not a good investment.

[Thaipwriter]

1. Set-up a company to buy the house with a shareholding of 39% myself and 61% thai wife

no problemo if you have seven Thai wives.

A Thai company LTD company must have 7 Shareholders so you will need a bunch of other folks involved as well.

Other that this small oversight the plan seems viable.

[NotaNutter]

Thanks, it wasn't an oversight though, I didn't want to confuse the issue. The other 5 shareholders would only hold a miniscule % of the company as is normal here.

[ThaiPauly]

Why don't you buy Condo's.? That way they are in your name and you dont have to go through all the problems of starting a company, etc!

[Sunbelt Asia]

Please make sure that your lawyer creates different classes of shares (preference share structures) with different voting and director appointment rights to ensure that you as the foreign minority shareholder have effective management and financial control of the company.

The other 5 shareholders can be just 1 share with shareholder agreements. Your wife having 60,995 shares and you having 39,000 shares.

www.lawyer.th.com

[NotaNutter]

Why don't you buy Condo's.? That way they are in your name and you dont have to go through all the problems of starting a company, etc!

<{POST_SNAPBACK}>

I don't think condos are a good buy in Bangkok at the moment. Prices around 9M for a 2 bed, lots more coming onto the market soon, competition from serviced apartments, and long term I've seen very few condos that increase in value here.