Passive Income

[Sa nuk maak]

Hi everyone, hoping you are able to shed some light on this for me.

Am a new commer to Pattaya, from Syndey, have great relationship and am going to live here, nothing new here!!

Here are my Q.

If farrung own condo's in their own name, can they rent them out for income, do they need to set up a company to do so?

Is it easier to have it in trusted Thai parties name and get them to handle money transactions?

Is collecting rent either through a real estate agent or dirrectly considered to be "working"?

I am looking to buy a second condo in the next few days and am wondering who's name to put it in.

Have one allready in girlfreinds name, no problem with this but would be better for my self esteem if my property portfolio was in my name.

If you can help me with this I would be greatly appreciative.

[TRIPxCORE]

Have one allready in girlfreinds name, no problem with this but would be better for my self esteem if my property portfolio was in my name.

There is no reason for that. It is perfectly legal for you to own the condo in your name. Didnt anyone make you aware of this?

[Digger]

Hi everyone, hoping you are able to shed some light on this for me.

Am a new commer to Pattaya, from Syndey, have great relationship and am going to live here, nothing new here!!

Here are my Q.

If farrung own condo's in their own name, can they rent them out for income, do they need to set up a company to do so?

Is it easier to have it in trusted Thai parties name and get them to handle money transactions?

Is collecting rent either through a real estate agent or dirrectly considered to be "working"?

I am looking to buy a second condo in the next few days and am wondering who's name to put it in.

Have one allready in girlfreinds name, no problem with this but would be better for my self esteem if my property portfolio was in my name.

If you can help me with this I would be greatly appreciative.

If your not registed for tax, who's to know if your renting it out or not??? Hihgly unlikely that anyone will be inclined to try and catch you out. I reckon that about 50% of condo's are sometime rented out and there does not seem to be a general uproar about farang being hassled.

As other poster say's you can own a condo in your own name these days very easily. I have always found the lawyer who operates out of SCR homefinder in Pattaya to be very honest - might be worth popping in and asking him to explain how to do it. his name is Sam and there office is in Pattaya bazaar at North Pattaya. I have used him on a number of occassions and found him fine.

Hope this helps

[Sa nuk maak]

Thanks guys.

[PK2]

It's illegal to make money in Thailand without a work permit. You are only allowed to spend your foreign money. You made a start there by buying theGF a condo, but unless you've got money to burn, I'd follow up with legal advise on any more purchases.

[Digger]

It's illegal to make money in Thailand without a work permit. You are only allowed to spend your foreign money. You made a start there by buying theGF a condo, but unless you've got money to burn, I'd follow up with legal advise on any more purchases.

Good point about the overall legitimacy however if he is not resident for tax, hardly anyone is going to find out - even more so if the rent is paid in cash and its another farang.

You can of course set up a company to own the condo and you just "look after' the money on its behalf as one of the directors. So long as you pay corporation tax on the declared income, I really doubt anyone is going to come after you - they are more interested in companies that do not pay any tax.

[TizMe]

I have always found the lawyer who operates out of SCR homefinder in Pattaya to be very honest

A woman and her little girl were visiting the grave of the little girl's grandmother. On their way through the cemetery back to the car, the little girl asked, "Mommy, do they ever bury two people in the same grave?"

"Of course not, dear." replied the mother, "Why would you think that?"

"The tombstone back there said 'Here lies a lawyer and an honest man."

[dr_Pat_Pong]

I have always found the lawyer who operates out of SCR homefinder in Pattaya to be very honest

A woman and her little girl were visiting the grave of the little girl's grandmother. On their way through the cemetery back to the car, the little girl asked, "Mommy, do they ever bury two people in the same grave?"

"Of course not, dear." replied the mother, "Why would you think that?"

"The tombstone back there said 'Here lies a lawyer and an honest man."

And you can tell when a lawyer is lying. If his lips are moving, he's lying

[TizMe]

And you can tell when a lawyer is lying. If his lips are moving, he's lying   

The day after a verdict had been entered against his client, the lawyer rushed to the judge's chambers, demanding that the case be reopened, saying: "I have new evidence that makes a huge difference in my client's defense."

The judge asked, "What new evidence could you have?"

The lawyer replied, "My client has an extra $10,000, and I just found out about it!"

SNM, sorry for hi-jacking your thread.. Tiz.

Where can you find a good lawyer?

In the cemetery.

You're trapped in a room with a tiger, a rattlesnake and a lawyer. You have a gun with two bullets. What should you do?

You shoot the lawyer. Twice.

How do you stop a lawyer from drowning?

Shoot him before he hits the water.

[PK2]

hardly anyone is going to find out - even more so if the rent is paid in cash and its another farang.

You could be right there especially if the farang is paying another farang overseas. Perhaps not a big deal unless big money involved on the legality of trading in Thailand. But when you need money in Thailand and need it to be shown as legally brought in for purposes such as retirement visa for example, there might be a problem?

[ZZZ]

I have asked the same question myself and always get the same answers: It's probably ok, not likely anyone will find out, should be fine, everyone is doing it so no problems....

The problem is that it is most likely highly illegal for a foreigner to rent out an apartment without the proper permits and without paying tax.

Not sure what the penalty could be but tax evasion, having an income without a work permit and probably a few other charges could possibly result in some time curtesy the Thai tax payer, hefty fines and maybe confiscation of the property.

Would be interesting if anyone have first hand information regarding this question???

[Digger]

I have asked the same question myself and always get the same answers: It's probably ok, not likely anyone will find out, should be fine, everyone is doing it so no problems....

The problem is that it is most likely highly illegal for a foreigner to rent out an apartment without the proper permits and without paying tax.

Not sure what the penalty could be but tax evasion, having an income without a work permit and probably a few other charges could possibly result in some time curtesy the Thai tax payer, hefty fines and maybe confiscation of the property.

Would be interesting if anyone have first hand information regarding this question???

What permits to rent out a house or condo? None to my knowledge, until you get up to 9 or so letting rooms (ie small hotel etc).

Also to my best understanding, you do not need a work permit to be a company director in Thailand. So your not breaking that law.

The company assuming its done properly pays tax as well, so your not breaking that law.

If you did it as a complete business with say 5 condos, your probably better off getting a work permit because its easy to say its a true business in that sense, but one condo I dont think is going to cause anyone any heartache.

However as they say, if you dont want the hassle, dont do it.

[dr_Pat_Pong]

It's illegal to make money in Thailand without a work permit. You are only allowed to spend your foreign money. You made a start there by buying theGF a condo, but unless you've got money to burn, I'd follow up with legal advise on any more purchases.

Good point about the overall legitimacy however if he is not resident for tax, hardly anyone is going to find out - even more so if the rent is paid in cash and its another farang.

You can of course set up a company to own the condo and you just "look after' the money on its behalf as one of the directors. So long as you pay corporation tax on the declared income, I really doubt anyone is going to come after you - they are more interested in companies that do not pay any tax.

Whatever you are on ....get off it. THINK...how would your tax collectors in YOUR homeland approach this. JEEZ....................

[BlackJack]

do it legally

register, get WP, visa

change the condo into your name

pay tax - your staying here - so pay - support the system - you'll find ways to get it back

see the girlfriends face when you ask her to sign the condo over

Arhhhh it is true love

otherwise the whole thing will turn around and bite you on the bum

remember - you will be ripped off in Thailand once - how big how small no one knows

its up to you - well, do you feel lucky punk?

[dr_Pat_Pong]

do it legally

register, get WP, visa

change the condo into your name

pay tax - your staying here - so pay - support the system - you'll find ways to get it back

see the girlfriends face when you ask her to sign the condo over

Arhhhh it is true love

otherwise the whole thing will turn around and bite you on the bum

remember - you will be ripped off in Thailand once - how big how small no one knows

its up to you - well, do you feel lucky punk?

Let the war begin ....

[Digger]

It's illegal to make money in Thailand without a work permit. You are only allowed to spend your foreign money. You made a start there by buying theGF a condo, but unless you've got money to burn, I'd follow up with legal advise on any more purchases.

Good point about the overall legitimacy however if he is not resident for tax, hardly anyone is going to find out - even more so if the rent is paid in cash and its another farang.

You can of course set up a company to own the condo and you just "look after' the money on its behalf as one of the directors. So long as you pay corporation tax on the declared income, I really doubt anyone is going to come after you - they are more interested in companies that do not pay any tax.

Whatever you are on ....get off it. THINK...how would your tax collectors in YOUR homeland approach this. JEEZ....................

Dr P - Not sure which part (or all) of my post is out of place however, the reality is that to all intents and purpose a falang that owns a condo and chooses to let friends or others stay in it is not illegal. Really the Farang without a company owning one condo does not have much choice even if they want to pay tax on it. Average rent for a condo in somewhere like Pattaya is say between 20-40,000 baht per month which is considerably below the thresholds needed for a work permit. Unless he has a more valuable property or multiple properties, he really has no other choice. As I said in a later post, if you dont want the hassle/risk leave it empty.

As to your comment about think how would tax inspectors think about this at home is a strange comment to say the least. We are not in our respective home countries - when your in Thailand, you follow Thai rules, when your in the UK, you follow UK rules and so on. There is nothing in Thailand to say that you cannot rent out a condo once you own it. It then becomes the owners choice how he declares it for tax purposes if at all. Its his risk and he needs to consider his options however as stated before, without a work permit, you cannot open a company bank account and therefore he as the individual holds onto the money. Some day someone may come knocking on his door for taxes but if he has been smart and declared it via a company ownership, he has paid all the corporate taxes. Nobody can prove that he has spent the retained earnings and providing he has sufficient money in his bank to represent the remainder, then he has not broken any laws. If the condo is in his wifes/GF's name its up to her to declare it on her tax return.

Remember most small businesses in Thiland do not even have bank accounts nor submit any kind of tax return. You are not even required to register for VAT if your annual sales fall below 600,000 baht or thereabouts per annum and I bet most companies with traded volumes of 2,000,000 baht are not registered - that is one of the challenges of being in such a cash mentality society.

My experience of the tax office in Thailand is that they invariably give you an option of settling any back taxes they think are due rather than hauling you off straight to court which in many cases is an extremely complex and time consuming process. I have never seen any cases of farang or Thai being prosecuted or kicked out of the country for being the owner or director of a company owning property unless they are involved in large scale fraud - i.e selling land pieces without correct titles and then the only action comes after someone or some people cause a stink. Perhaps you know of one or more cases that represents the relatively small amounts of money we are presumably talking about here.

I can promise you most Thais do not declare any tax on properties they rent out, unless they have signifigant holdings and a lot to lose. Thats not to say it cannot happen, but really do you think that the Thai tax office have nothing better to worry about. An easier bet it to go straight after any bar or gogo owner, who invariably is neither paying any personal taxes nor has a work permit yet is actively involved in the running of his investment. If those have not been very successful to date, I dont really think anyone is going to spend a lot of time and resources chasing a proerty owner that may or may not rent out a small condo for some or all of the time and pop back to the country couple of times a year to collect the rent.

As for me, I have properties which I rent out to corporations and pay tax on. My tax payments are considerable and my work permit is all up to date and linked with my business, and as such I sleep easy at night, but the poster was asking for general questions and info - I supplied that. Its always up to the individual what they choose to do.

Hope this clarifies things for you.