Take Out Thai Shareholders While Owning The House

[plus7]

Hi,

Thank you for your previous reply to my questions.

Now, I was told that it is possible to take away thai shareholder and become fully farang company (3 ppl) AFTER buying a house.

They said it is possible. but to sell house later I need to have thai majority again.

Is it true ?

Its all about Pattaya

[estefaniw]

This is illegal.

[jamescollister]

Totally illegal, anyone involved faces up to 1 mil fine and up 3 years jail. Jim

[craigt3365]

You can get the number of shareholders down to 3, with you being the director and two Thais being the other shareholders.

[jamescollister]

You can get the number of shareholders down to 3, with you being the director and two Thais being the other shareholders.

Heres a qoute from a Thai/ English law firm.

Q: What is a nominee shareholder?

A nominee shareholder is a shareholder in name only; in actuality, nominee shareholders lack a real financial stake or interest in the company. The practice of nominee shareholders is illegal. The prohibition is found in the Foreign Business Act, the Land Act and other laws. It is a criminal offense. In 2006, a Circular Letter from the Department of Land and a new regulation from the Department of Commercial Registration have brought foreign companies with Thai nominee shareholders under an increased amount of scrutiny.

[craigt3365]

You can get the number of shareholders down to 3, with you being the director and two Thais being the other shareholders.

Heres a qoute from a Thai/ English law firm.

Q: What is a nominee shareholder?

A nominee shareholder is a shareholder in name only; in actuality, nominee shareholders lack a real financial stake or interest in the company. The practice of nominee shareholders is illegal. The prohibition is found in the Foreign Business Act, the Land Act and other laws. It is a criminal offense. In 2006, a Circular Letter from the Department of Land and a new regulation from the Department of Commercial Registration have brought foreign companies with Thai nominee shareholders under an increased amount of scrutiny.

speeding is illegal also....my response was not regarding the legality/illegality of nominee companies. Only to how many shareholders are required.

[Khun Jean]

Find a thai to own the land (maybe one of the nominees, she/he would be delighted), take a usufruct and sell the house to yourself.

[johnnyk]

House or land? You can own the house in a falang name.

If a Thai company owns the land it must have minimum 3 shareholders but it can have more if desired for some reason.

No matter the number there must be a Thai majority.

Thai law also allows for two classes of shares, preference and common/ordinary.

Thai common shares have 10 votes per share, preference have one vote per share (seems like odd terminolgy but TiT).

Control can be exercised by whoever owns the common shares.

This arrangement also exists in many western countries including the USA and Canada.

Example, Zuckerberg controls Facebook with 18% of the total shares issued because his preferred shares have 57% of the total votes.

NOTE: In the west shares with more votes are called "preferred shares" the others are common shares.

Terminology is reversed in Thailand - "preferential shares" are common shares having just one vote per share.

Edited May 22, 2012 by johnnyk

[23962323]

You can get the number of shareholders down to 3, with you being the director and two Thais being the other shareholders.

Heres a qoute from a Thai/ English law firm.

Q: What is a nominee shareholder?

A nominee shareholder is a shareholder in name only; in actuality, nominee shareholders lack a real financial stake or interest in the company. The practice of nominee shareholders is illegal. The prohibition is found in the Foreign Business Act, the Land Act and other laws. It is a criminal offense. In 2006, a Circular Letter from the Department of Land and a new regulation from the Department of Commercial Registration have brought foreign companies with Thai nominee shareholders under an increased amount of scrutiny.

The information was circulated a little over one month ago,takes time to sink in,makes interesting reading too. No farang on any paperwork,or usufruct or any leasehold agreement longer than 3 years

The author of the reported piece, although derided,made an ominous two word statement (or sentence )that would send a chill throughout the farang house owning set too,that sentence was "for now" regarding selling of farang company owned houses,meaning the avenue for selling through land registry was being withdrawn too. Happened before in other places,they will want a large backhander to complete a deal more like

Edited May 23, 2012 by 23962323

[DrTuner]

Find a thai to own the land (maybe one of the nominees, she/he would be delighted), take a usufruct and sell the house to yourself.

I was adviced against separating an existing house from it's land and instead issuing a mortgage on it by my lawyer. Apparently separating the ownership at land office is a bit of work and may result in property/building taxes.

[Khun Jean]

Find a thai to own the land (maybe one of the nominees, she/he would be delighted), take a usufruct and sell the house to yourself.

I was adviced against separating an existing house from it's land and instead issuing a mortgage on it by my lawyer. Apparently separating the ownership at land office is a bit of work and may result in property/building taxes.

Find another lawyer.

If ownership is the wish nothing else is available.

Problem with a mortgage is that when it is not paid it will be yours and you have to sell it within a year.

Another problem with a mortgage is that when it is paid it is not yours also.

Doesn't sound like ownership to me.

[DrTuner]

Find a thai to own the land (maybe one of the nominees, she/he would be delighted), take a usufruct and sell the house to yourself.

I was adviced against separating an existing house from it's land and instead issuing a mortgage on it by my lawyer. Apparently separating the ownership at land office is a bit of work and may result in property/building taxes.

Find another lawyer.

If ownership is the wish nothing else is available.

Problem with a mortgage is that when it is not paid it will be yours and you have to sell it within a year.

Another problem with a mortgage is that when it is paid it is not yours also.

Doesn't sound like ownership to me.

Well actually I wasn't looking for ownership, just a sort of guarantee that the property can't be sold without my consent (or at least there would be no profit in doing so). In addition to that a will will be written in case something ontoward happens to my wife who'll be listed in the chanod and vise versa. If it wasn't a home we intend to live in I'd never invest in one.

Usufruct in foreigners name might be a problem at the land office (and in my case being married could be voided), AFAIK a mortgage is still ok. It's a somewhat gray area, with loopholes being plugged and created constantly.