Uk Ltd Company Buying Property In Thailand

[rocky]

I would be grateful if any one could help with these following questions.

I have a UK ltd company, I would like to use the money within the UK Ltd company

to purchase property in Thailand. I would like to use the money from the UK Ltd

company not personally.

Is it possible for A UK Ltd company to purchase land, property or condos in Thailand

under the UK company name,

Any suggestions would be helpful.

I will be in Thailand in 10 weeks time so will take this matte up with a local solicitor

company when there, I would like some pointers in the mean time.

Thank you in advance

[Nadia 2]

Condos is a different story and can be owned freehold by foreigners (if the foreign ownership in that condominium, when added together, does not exceed forty nine percent of the total space of all unit)

The Land Code prohibits foreign natural and foreign juristic persons (like your uk ltd) from owning land in Thailand. A common used argument by the legal offices involved and the real estate agents is that a foreigner can purchase land through a Thai majority owned Limited company and have effective management and control of this company.

However there serious legal drawbacks

1-

Even though the majority of the shares are held by Thai nominees these companies can still be deemed foreign. The letter of the Land Code and Foreign Business Act is quite clear and these companies can be deemed alien pursuant to sections 97 and 98 of the Land Code and section 4 of the Foreign Business Act, and therefore prohibited from owning land.

The current policy of the land department is to look only at the shareholders proportion or capital shares held by foreigners in the company when they register a land transfer, but this does not change the fact that according to the law an 'alien' has acquired land. This is a future risk and following - section 94 of the Land Code; 'All the land which an alien has acquired unlawfully or without permission shall be disposed of by such alien'.

Say we can get around the land code…

2-

The foreign purchaser is operating a business in Thailand. The company must be active or risk being removed from the registrar for companies. If there is no substantial activity the company could be closed down by the department of business (1246 CCC) or the Court (1237 CCC).

How about the Foreign Business Act (effective since March 2000)? What is the company's business? Is the company set up to hold land and to circumvent the law on foreign land ownership? Then the whole set up will be deemed VOID pursuant to the sections 150 and 172 of the Civil and Commercial Code. The Thai courts will uphold this argument and in any event, order that the land be given back to the Thai land owner.

A common used argument by the legal firms involved in the property business is that Thai Landholding Company will not be operating a business that is restricted by the FBA and the provisions in the FBA are not applicable.

According to the Foreign Business Bureau in Bangkok, land trading (list 1, thus a business not permitted for foreigners to operate) means any sale and purchase of land by the company and therefore the provisions of the FBA are applicable. Secondly, the landholding company must be allowed to own and invest in land in accordance with its objectives and Articles of Association.

Special attention to the sections 4 – 36 and 37 of the foreign business act http://www.dbd.go.th/eng/law/fba_e1999.phtml

There is no way around the FBA, but say we also get around the Foreign Business Act…..

3-

The foreigner is running a company in Thailand and looking at all the requirements, restrictions and procedures in the Civil and Commercial Code and Revenue Code the company could become a costly and heavy burden to the foreigner.

When these 'paper' companies come under scrutiny by the government (the Revenue Department or Ministry of Commerce), which is not unlikely in the future, this will lead to many problems for the foreigner and the additional fines. There are too many requirements and procedures under the civil and commercial code and Revenue Code to mention here.

One major requirement is that the foreign director must be in the possession of a work permit if he is acting on behalf of the company (even for a day), or it is it is a criminal offense and any signed document could be rejected by the government agency involved and the director could face criminal charges and even deportation out of Thailand….. Work is defined very broadly defined, covering either physical and mental activities, whether or not for wages or other remuneration.

I'm sure the government will one day start acting against the unlawful use of Thai limited companies and the foreigners who have incorporated these companies. It will most likely become more difficult for foreigners to circumvent the law future, but till then 'nothing to worry about.....' Foreigners can keep buying and reselling land and making a profit, but in the end someone is going to lose his money.

Cheers

Nadia

I would be grateful if any one could help with these following questions.

I have a UK ltd company, I would like to use the money within the UK Ltd company

to purchase property in Thailand. I would like to use the money from the UK Ltd

company not personally.

Is it possible for A UK Ltd company to purchase land, property or condos in Thailand

under the UK company name,

Any suggestions would be helpful.

I will be in Thailand in 10 weeks time so will take this matte up with a local solicitor

company when there, I would like some pointers in the mean time.

Thank you in advance

[RAZZELL]

As a matter of interest, what level of "trading" or turnover would a company have to make to be deemed "active"?

Thanks