Transfer Fees/taxes For Thai Business Owning Land

[Scarlett]

I'm sure this has been covered before, but I can't seem to find the answer using the search function.

I have heard that if ownership of the company holding land and house is transfered, one may avoid paying property transfer tax/fees. Is this true? Does anyone have experience, information, and advice on this?

Also, does anyone have advice on how to conduct and negotiate the sale of property from foreigner to foreigner?

Is there any international escrow companies or a good way to transfer large funds safely without bringing them into thailand?

Any ideas on reputable companies to handle the transaction?

Thank you

[stevehaigh]

I'm sure this has been covered before, but I can't seem to find the answer using the search function.

I have heard that if ownership of the company holding land and house is transfered, one may avoid paying property transfer tax/fees. Is this true? Does anyone have experience, information, and advice on this?

Also, does anyone have advice on how to conduct and negotiate the sale of property from foreigner to foreigner?

Is there any international escrow companies or a good way to transfer large funds safely without bringing them into thailand?

Any ideas on reputable companies to handle the transaction?

Thank you

<{POST_SNAPBACK}>

i think what you are proposing is that the farang minority owner of the company transfer his shares to another farang, so effectively transfering ownership of the land/house to the new farang without selling and buying the land/house. is that right? if so, why would an international escrow company be involved? surely the seller of the shared and the buyer of the shares would simple register the change of ownership and make the necessary payment to the other party.

you should have no problem finding a lawyer or accountant to help you with this on samui. can you post what you find out, i'm very interested.

thanks, steve

Edited November 27, 2005 by stevehaigh

[Cabana]

Its a neat idea and would avoid all taxes but personally I dont think it is wise to buy a company (presumably the minority shares have control) in order to gain ownership of land as one would not know what liabilities that company had outstanding or indeed future liabilites. Better to set up a fresh company to be safe. I know one agent who will disagree with this (and advised me to do it) but agent's are not know for their impartiality (or sometimes legal knowledge). I dont believe in this instance there is any saving of tax's paid.

[stevehaigh]

Its a neat idea and would avoid all taxes but personally I dont think it is wise to buy a company (presumably the minority shares have control) in order to gain ownership of land as one would not know what liabilities that company had outstanding or indeed future liabilites.  Better to set up a fresh company to be safe. I know one agent who will disagree with this (and advised me to do it) but agent's are not know for their impartiality (or sometimes legal knowledge).  I dont believe in this instance there is any saving of tax's paid.

<{POST_SNAPBACK}>

good point, and if there was a large capital gain involved (assuming the land/house value appreciated which it probably did in samui) the new ower of the company would get stuck with the entire capital gain tax bill when he sold, so the old owner of the company would be getting away with a pretty good deal.

[Digger]

The idea behind this is that the company is always retaining ownership - its just one or more the directors and shareholders changing - which is just an amendment at the company registration office. There is no transfer of ownership of land as the same company still owns the land.

Now, the key to this is has the company been used for any other purposes. This is the difficult thing to determine however what it does mean is that the buyer does not need to set up a new company and between them the buyer and seller do not need to cover the costs of the land transfer taxes. In a buyers market, it should be possible to acquire just the asset (i.e the land & house) without the company, but in a sellers market, the current owner may just say either you pay for the transfer fee's or forget it and keeps it on the market awaiting someone else willing to save a few baht and just take over the company. A lot of it boils down to how much you trust and believe the seller. The liklihood is the company would not have been used for other purposes for the simple reason that its not exactly in a financial position to for example offer financial guarantees as its accounts will not stand up to 3rd party assessment in terms of solvency.

However if your buying a real going concern with a complete trading company, it could be very different. For that reason, its best to do your homework thoroughly - any guarantees given to a bank though would require that bank put a lien on the land title and that would show up at the land office.