Poll On Land Ownership Route

[thedude]

Thai wife bought the land then I leased it from her for 30+30 yrs. The lease specifically states that I own the house and everything else subsequently built on it. (So in case she dies before I do whoever inherits the land from her as stated in her will must abide by the lease as well). The lease was drawn up by a Thai lawyer, but like every contract ever written there's always a f#*ing lawyer and court ready to overturn it any time, so until we take Shakespeare's advice and kill all the lawyers first that's just the way it's going to be, because they rule the world, whether you like it or not!

Yes, it can be overturned but is better than nothing and the need for litigation might put an errant wife off from trying it. You don't own the house unless your ownership is registered with the Land Dept. I'm not sure if this is really possible unless you are building a new house that has not been registered. Otherwise it probably needs a separation of the house from the deed and the issue of two new deeds which would be costly. Anyway you are in a difficult situation owning a house on land which you no longer have a lease on i.e. you have no access to your property and the house becomes worthless. You can have her will the property to you as her statutory heir and register the will with the ampur. Technically you are allowed to own land in that situation with permission of the minister which has probably never been given but it allows you to choose who you want to transfer it too in the event of your wife predeceasing you. For those with Thai children, having her will the property to them is the best solution.

BTW what sort of costs including are involved in setting up the lease and registering it with the Land Dept?

lease registration fee is 1% of rentals due under the term

any unregistered lease reverts to same status as a a 3 year lease

there are a great number of issues in spouses leasing to spouses (some of which have been touched upon) that make usufruct an alternative

in cloudhopper's case, if his wife doies during the first 30 years he has no automatic right to renewal at 30 years (nothing to do with overturning, tha's Thai Supreme Court Case law).

My property is owned via a minority farang company with suitable minority controls and proetctions; yes there's a cost and it depends on the value of the property as to whether or not this is worthwhile. I've seen a few problems with badly set-up companies (plenty of cheap lawyers on the street corners of Bangkok) that folks bring to us to fix (would have been easier and cheaper to come to us in the first place and set it up right) and I've seen dozens of problems with separations, bereavements and divorces. These are all real people's lives and too often the ending is far from happy. One thing that no-one 's mentioned; I have seen one situation where a Thai spouse agreed to sell the property and give the proceeds to the farang who had paid for it on the grounds that this was only fair. No-one has a crystal ball, but do the research and then choose the right thing for your situation.....

Paul, does the Thai legal system operate on case precedents since it is based on Civil Law?

I know this was brought up during the recent BCC talk, but i dont recall there being a specific answer.

[Naam]

"They will be encouraged to shop you to avoid prosecution and to grab their 51% or more share of your property."

*****

who are "they" pray tell?

[Arkady]

"They will be encouraged to shop you to avoid prosecution and to grab their 51% or more share of your property."

*****

who are "they" pray tell?

Nominees. They will be given 90 days amnesty after the enactment of the new FBA. After that they can be prosecuted.

[Arkady]

My property is owned via a minority farang company with suitable minority controls and proetctions; yes there's a cost and it depends on the value of the property as to whether or not this is worthwhile. I've seen a few problems with badly set-up companies (plenty of cheap lawyers on the street corners of Bangkok) that folks bring to us to fix (would have been easier and cheaper to come to us in the first place and set it up right) and I've seen dozens of problems with separations, bereavements and divorces. These are all real people's lives and too often the ending is far from happy. One thing that no-one 's mentioned; I have seen one situation where a Thai spouse agreed to sell the property and give the proceeds to the farang who had paid for it on the grounds that this was only fair. No-one has a crystal ball, but do the research and then choose the right thing for your situation.....

Is it a catch 22 in that the more worthwhile it is to do, the harder and riskier it is to do (or continue to do) too? If some one has used a Baht 2 million company to buy a Baht 500,000 property as head office and director's residence and has some sales and profits it should be relatively easy to justify. If they have bought a Baht 40 million baht villa it seems to me a lot harder. First of all shouldn't sales and profits of the company be rather high to justfiy such a high value of fixed assets? Secondly if they bought the villa with a Baht 2 million company and 38 million of debt, isn't it going to be obvious that the debt and therefore most of the funds to buy the land came from the foreigner? Alternatively, if they set the company up with Baht 40 million of paid-up capital, isn't it going to be a lot harder to prove that the Thai shareholders really paid in their 51% or 61%, if investigated.

[SoiSong]

Don't try top cheat....End of Story. right now wait an see. Am I correct in saying you are far more likely to have a house go away thru a marriage to a Thai. Isn't the the most risky thing to do?

[quiksilva]

That depends on who you marry...

[dsfbrit]

House and just under 1 Rai of land in Pattaya in majority farang shareholder company.

Set this up 3 years ogo, I guess its 'worth' about 5-6 million Baht - not that want to sell it even if I could.

I will switch this to 30 year lease (land) with my Thai wife if/when I have to.

I will keep house in my name.

I would have gone the lease route in the first place, but I figured if we get divorced - lest face it 30 years is a long time - I would have more problems with a lease.

However, with the chaos in the new legislation - it seems like it may be some time yet before I have to do anything regarding the 'illegal' company, so will just sit tight for now.

Interesting poll by the way

I think lots of us IF and WHEN will be necessary will switch to leasehold.

In the worst case we will have bit of time to do it and arrange it.

But in my case more difficult because we (me and my wife) are both foreign.

Still hope for something good come up (freehold) under 1 rai, or something restored in term of

investment quota or....I will give land to somebody and rent land from him with penalties in contract who

can protect me and avoid to kick my h..s

Perhaps you can adopt a Thai child and transfer to them. Don't think anything very good is going to come up for this type of situation. Best to hope for is that they backtrack on Annex 3 of the FBA which might give less reason for the MoC to investigate the companies, most of which fall under the Annex 3 category of "all other services not mentioned elsewhere in the act", if you ignore their dealing in land which puts them in Annex 1. Nothing good will happen re land ownership. This problem started last March with the Interior Ministry's letter. Guidelines re enforcement may still be clarified. There is no talk of a grace period to restructure land ownership and it seems unlikely. The grace periods are only for Annex 1 and Annex 2 businesses not involving land. Watch out for the 90 day amnesty for Thai nominees effective from the date the new law will be published in the Royal Gazette. They will be encouraged to shop you to avoid prosecution and to grab their 51% or more share of your property.

An intersting couple of replies, reflecting the 2 ends of the spectrum of what may be the outcome of this review.

At the one end some hope there will be a (senssible?) liberalisation of the land laws.

At the other end a suspicion the laws will be tightened to 'protect' the Thais.

Only time will tell and until then most of us I suspect are hoping for the best, but are planning for the worst.

Experience of life tells me that there will be a 'solution' that doesn't quite satisfy anyone, but can be lived with by most - except those that have bent the legal loop-holes in company law and land ownership to a level beyond just 'illegaly' buying a bit of land to live on for the rest of their life in peace!!

We shall see...

[dsfbrit]

That depends on who you marry...

I know this is off topic, but I disagree with what I believe you are suggesting - which is there are good and bad spouses and so if you choose a 'good' wife then all is OK.

Sure there are people out there - Thais girls here as this is Thailand - who may want to con you out of your money.

However, there are a lot more marriages that fail due to both parties no longer 'getting on' and no longer wanting to be together.

This is not due to either party being inherently 'bad' - they have just changed and want to split for some reason.

Now in Thailand if this happens and everything is in the wife's name - then what!!

Lets face it, I will need to remain with my Thai wife for another 30 years if I 'trust' her with everything in her name and want to live in this house for the rest of my life(say).

That is a scary prospect, especially as I was divorced from my 1st wife after 12 years.

We are still friends and split everything 50/50 - without any lawyers.

Would I be so 'fortunate' a second time.

I am not rushing to put any assets in my Tha wife's name - no matter how much I trust her.

[donx]

That depends on who you marry...

I know this is off topic, but I disagree with what I believe you are suggesting - which is there are good and bad spouses and so if you choose a 'good' wife then all is OK.

Sure there are people out there - Thais girls here as this is Thailand - who may want to con you out of your money.

However, there are a lot more marriages that fail due to both parties no longer 'getting on' and no longer wanting to be together.

This is not due to either party being inherently 'bad' - they have just changed and want to split for some reason.

Now in Thailand if this happens and everything is in the wife's name - then what!!

Lets face it, I will need to remain with my Thai wife for another 30 years if I 'trust' her with everything in her name and want to live in this house for the rest of my life(say).

That is a scary prospect, especially as I was divorced from my 1st wife after 12 years.

We are still friends and split everything 50/50 - without any lawyers.

Would I be so 'fortunate' a second time.

I am not rushing to put any assets in my Tha wife's name - no matter how much I trust her.

Reading your post, I can only conclude that your forgot or weren't aware of the golden rule for investing in Thailand when you bought your Thai property - never invest more in Thailand than you can afford to walk away from.

I'm not trying to put you down or anything. I'm just trying to say that there are ways to get your 50/50 share if the marriage fails. For me, I own property in the US solely in my name and prior to my marriage. Everything we have in Thailand is in my wife's name. If we decide to depart, it won't be difficult for us to split the assets fairly. You may want to consider having a condo in your name alone if you have the means to obtain one.

I totally agree that it isn't usually a matter of marrying a bad person. People change and often grow apart.

Just my ha baht worth.

[Arkady]

House and just under 1 Rai of land in Pattaya in majority farang shareholder company.

Set this up 3 years ogo, I guess its 'worth' about 5-6 million Baht - not that want to sell it even if I could.

I will switch this to 30 year lease (land) with my Thai wife if/when I have to.

I will keep house in my name.

I would have gone the lease route in the first place, but I figured if we get divorced - lest face it 30 years is a long time - I would have more problems with a lease.

However, with the chaos in the new legislation - it seems like it may be some time yet before I have to do anything regarding the 'illegal' company, so will just sit tight for now.

Interesting poll by the way

I think lots of us IF and WHEN will be necessary will switch to leasehold.

In the worst case we will have bit of time to do it and arrange it.

But in my case more difficult because we (me and my wife) are both foreign.

Still hope for something good come up (freehold) under 1 rai, or something restored in term of

investment quota or....I will give land to somebody and rent land from him with penalties in contract who

can protect me and avoid to kick my h..s

Perhaps you can adopt a Thai child and transfer to them. Don't think anything very good is going to come up for this type of situation. Best to hope for is that they backtrack on Annex 3 of the FBA which might give less reason for the MoC to investigate the companies, most of which fall under the Annex 3 category of "all other services not mentioned elsewhere in the act", if you ignore their dealing in land which puts them in Annex 1. Nothing good will happen re land ownership. This problem started last March with the Interior Ministry's letter. Guidelines re enforcement may still be clarified. There is no talk of a grace period to restructure land ownership and it seems unlikely. The grace periods are only for Annex 1 and Annex 2 businesses not involving land. Watch out for the 90 day amnesty for Thai nominees effective from the date the new law will be published in the Royal Gazette. They will be encouraged to shop you to avoid prosecution and to grab their 51% or more share of your property.

An intersting couple of replies, reflecting the 2 ends of the spectrum of what may be the outcome of this review.

At the one end some hope there will be a (senssible?) liberalisation of the land laws.

At the other end a suspicion the laws will be tightened to 'protect' the Thais.

Only time will tell and until then most of us I suspect are hoping for the best, but are planning for the worst.

Experience of life tells me that there will be a 'solution' that doesn't quite satisfy anyone, but can be lived with by most - except those that have bent the legal loop-holes in company law and land ownership to a level beyond just 'illegaly' buying a bit of land to live on for the rest of their life in peace!!

We shall see...

Pridyathorn's departure may be a positive here. With any luck the other obvious foreigner hater in the cabinet, the Commerce Minister Krirk-krai will go too in the reshuffle. At any rate Sarayud has seen that Pridyathorn's anti-foreigner stance did nothing to help the survival chances of his government and may now want to leave the FBA amendments on a back burner, given the huge problems he is facing with the TRT resurgence, the constitutional referendum and his failure in the South. In fact this government's chances of lasting till the next election are not looking so great now. If Sarayud is also replaced, his successor would have an even tougher job to establish credibility in a very short space of time and might not feel any sense of ownership or the FBA amendments.

Land owning companies still face another problem from the Land Code but delaying the FBA amendments would probably give some more breathing space before the possibility of systematic checks could loom. Without any impetus for the Commerce Ministry from the FBA amendments the Lands Dept would have to push the Business Development Department to help it track down illegal land ownership without any benefit to the Commerce Ministry. Not wanting to encourage complacency but feeling more inclined to watch political development for a bit before embarking on expensive restructuring.

[dsfbrit]

[quote name='Arkady' post='1173155' date='2007-03-02 12:29:07'

Pridyathorn's departure may be a positive here. With any luck the other obvious foreigner hater in the cabinet, the Commerce Minister Krirk-krai will go too in the reshuffle. At any rate Sarayud has seen that Pridyathorn's anti-foreigner stance did nothing to help the survival chances of his government and may now want to leave the FBA amendments on a back burner, given the huge problems he is facing with the TRT resurgence, the constitutional referendum and his failure in the South. In fact this government's chances of lasting till the next election are not looking so great now. If Sarayud is also replaced, his successor would have an even tougher job to establish credibility in a very short space of time and might not feel any sense of ownership or the FBA amendments.

Land owning companies still face another problem from the Land Code but delaying the FBA amendments would probably give some more breathing space before the possibility of systematic checks could loom. Without any impetus for the Commerce Ministry from the FBA amendments the Lands Dept would have to push the Business Development Department to help it track down illegal land ownership without any benefit to the Commerce Ministry. Not wanting to encourage complacency but feeling more inclined to watch political development for a bit before embarking on expensive restructuring.

Agreed. When I saw he had resigned I did wonder if that might be a positive development for those of us watching the FBA legislation develop.

I guess we shall just have to wait and see...

[quiksilva]

^^ lets hope so.

That depends on who you marry...

I know this is off topic, but I disagree with what I believe you are suggesting - which is there are good and bad spouses and so if you choose a 'good' wife then all is OK.

Sure there are people out there - Thais girls here as this is Thailand - who may want to con you out of your money.

However, there are a lot more marriages that fail due to both parties no longer 'getting on' and no longer wanting to be together.

This is not due to either party being inherently 'bad' - they have just changed and want to split for some reason.

Now in Thailand if this happens and everything is in the wife's name - then what!!

Lets face it, I will need to remain with my Thai wife for another 30 years if I 'trust' her with everything in her name and want to live in this house for the rest of my life(say).

That is a scary prospect, especially as I was divorced from my 1st wife after 12 years.

We are still friends and split everything 50/50 - without any lawyers.

Would I be so 'fortunate' a second time.

I am not rushing to put any assets in my Tha wife's name - no matter how much I trust her.

Reading your post, I can only conclude that your forgot or weren't aware of the golden rule for investing in Thailand when you bought your Thai property - never invest more in Thailand than you can afford to walk away from.

I'm not trying to put you down or anything. I'm just trying to say that there are ways to get your 50/50 share if the marriage fails. For me, I own property in the US solely in my name and prior to my marriage. Everything we have in Thailand is in my wife's name. If we decide to depart, it won't be difficult for us to split the assets fairly. You may want to consider having a condo in your name alone if you have the means to obtain one.

I totally agree that it isn't usually a matter of marrying a bad person. People change and often grow apart.

Just my ha baht worth.

People divorce for all manner of reasons I guess, and likewise marry for different reasons too, perhaps not all these reasons are the best ones. What is the divorce rate these days, something like 60% in the UK? Im not sure to be honest, but I know its a frighteningly high statistic.

I suppose like many things in life, marriage is a gamble, all you can do is hedge your bets as best you can and hope that you'll be one of the 40% who make it.

[dsfbrit]

Marriage certainly is a gamble.

As its off topic I wont post a long reply.

I have kept the bulk of my retirement money in the UKand have a pre-nup as well! so I did follow the golden rule Donx. In fact I have think I have a Platinum rule that I follow!!! Which involves protecting myself as much as I can, without being mean nor unfair to my wife.

The topic of this thread is about method of 'owning' land in Thailand:

If I had the chance again I may not choose to 'own' land through the company route and maybe would have put in my wifes name and lease.

Even now though, I am not sure that is a good idea and if the FBA changes do not materialise and the status quo is maintained for the company 'thing' - then in 5 years time I will be pleased I 'held my nerve'.

We shall see.

[Arkady]

Marriage certainly is a gamble.

As its off topic I wont post a long reply.

I have kept the bulk of my retirement money in the UKand have a pre-nup as well! so I did follow the golden rule Donx. In fact I have think I have a Platinum rule that I follow!!! Which involves protecting myself as much as I can, without being mean nor unfair to my wife.

The topic of this thread is about method of 'owning' land in Thailand:

If I had the chance again I may not choose to 'own' land through the company route and maybe would have put in my wifes name and lease.

Even now though, I am not sure that is a good idea and if the FBA changes do not materialise and the status quo is maintained for the company 'thing' - then in 5 years time I will be pleased I 'held my nerve'.

We shall see.

There are must be quite a few here that feel the same way as you do i.e. they already have a house and land through a company, even though they would probably do things differently if they were approaching it today. Now that the FBA amendments look more doubtful than they did even a month ago many may also prefer to wait and see before going ahead with expensive restructuring that will distance legal ownership of the property one more step away from them. This is certainly not without risk but, as you say, might look like the right move in 5 years time.

Personally I am wondering about the option of having a Thai wife as the major shareholder of the company. The reason against this seems to be that some land offices have refused to register land transfers to companies where the the major Thai shareholder is recognizable by her surname as the foreign shareholder's wife. (I have yet to read of a case where the Land Office has checked to see if a Thai shareholder with a Thai surname is married to the foreign shareholder.) In these cases the Land Office has taken the view that both the husband's and wife's shares were communal marital property under the husband's control and therefore foreign. However, if the wife, preferably retaining or reverting to a Thai surname, acquires the shares after the transfer of the land, would the Commerce Ministry check her marital status? Probably not. There seems to be no legal basis for determining the wife's shares as foreign and it is gross sexual discrimination that was prohibited under the 1997 constitution and hopefully will be under the next one. There are many prominent Thai men married to foreigners and you can imagine the fuss if some one suggested that all their shareholdings are deemed foreign! As far as the money for buying the shares is concerned, you may be able to get around this by making it a gift of sinsot which is perfectly legal. The other argument that comes from practice in certain land offices since last year's famous letter is that a foreign shareholder's loan counts as foreign capital and all the capital used to buy the property has to be counted to determine the company's nationality, not just paid-up or registered capital. Apparently some Land offices have been insisting that a company with foreign shareholders buying land for, say B10 million, must have B10 million paid up capital and no foreign debt. This again seems to me to officials making up rules as they go along to block individual transfers but with no legal basis. It would be absurb to say that a Thai owned property developer with B200 million paid-up capital and a B500 million loan from a foreign bank could not buy land on the grounds that the company was foreign. On the other hand, if they decide they want to screw you, they will anyway, even if your Thai shareholders clearly have enough money to have invested their own money in the company.

[dsfbrit]

Arkady, I think we have both spent a lot of time looking into this issue.

Each 'solution' I have come up with has pros and cons and none has passed the 'test'.

The tests for me being:

1. whether I feel I am any 'better off' legally ie: is there more chance I will be able to

live in this house for the rest of my life if I want to.

2. Will I be able to sleep better without the worry of the 'land police' knocking at the door.

Dealing with the 2nd part first, I dont lose any sleep at all now. Last May when I first read about this land enforcement, I nearly ****ed myself. Now I have spent time understanding all the issues I dont lose any sleep at all. In fact I enjoy the discussion about what people are doing about it all - its become a hobby!

With the first part though, I dont think making the wife the major share holder would pass my 'test'. I get the feeling I would be better off with the land in her name / 30 year lease rather than doing this. Do you see an advantage in having her as the major shareholder if it were to be a proven viable set-up for you?

It seems a lot of hassle to me for very little real gain for you? especially if the FBA legislation is 'watererd down' and then not implemented/enforced with any real enthusiasm?

[Arkady]

Arkady, I think we have both spent a lot of time looking into this issue.

Each 'solution' I have come up with has pros and cons and none has passed the 'test'.

The tests for me being:

1. whether I feel I am any 'better off' legally ie: is there more chance I will be able to

live in this house for the rest of my life if I want to.

2. Will I be able to sleep better without the worry of the 'land police' knocking at the door.

Dealing with the 2nd part first, I dont lose any sleep at all now. Last May when I first read about this land enforcement, I nearly ****ed myself. Now I have spent time understanding all the issues I dont lose any sleep at all. In fact I enjoy the discussion about what people are doing about it all - its become a hobby!

With the first part though, I dont think making the wife the major share holder would pass my 'test'. I get the feeling I would be better off with the land in her name / 30 year lease rather than doing this. Do you see an advantage in having her as the major shareholder if it were to be a proven viable set-up for you?

It seems a lot of hassle to me for very little real gain for you? especially if the FBA legislation is 'watererd down' and then not implemented/enforced with any real enthusiasm?

My thinking is that, if your major shareholder is already some one who could pass muster as a bona fide investor and the money trail was properly shows this, there may be no advantage in bringing the wife into the picture, unless you would actually prefer your wife to be part owner. If the shareholding structure is iffy and you want to restructure it anyway, the wife may have a useful role to play here. I have thought about your point 1 and a mechanism that might improve security here would be to have a balancing shareholding in the name of some one who is your close friend and no connection to your wife, so she doesn't have 50% or more and the ability to fire the board and sell the property. Thus, if the foreign shareholding is 49% this balancing shareholding would be 2%. If the foreign shareholding is 39%, it would be 11% and so on. You could also perhaps do a long lease of the property in your personal name from your company. (This step could be held in reserve in case you foresee problems with your marriage, assuming that you don't make your wife a co-authorized signatory of the company.) If you do business and get some retained profits in the company, you can pay some dividends to the wife and yourself, if you are the main shareholders. I am still not sure about the issue that I mentioned above about the wife's shares being considered foreign. It's clearly nonsense from a legal point of view but logic often doesn't enter into it in Thailand. On the other hand it is more convincing that your wife should be a shareholder in your business than a random nominee. Thai families usually structure their businesses in this way. Assuming no problems from the FBA or the Land Code, this structure is safer in the event of a relationship breakdown than transferring the property to your wife and leasing it back as she doesn't have absolute ownership of the property or majority control of the company. It is also easier to transfer her shares to some one else than to transfer ownership of the land,if it is in her name. Although I realize that this type of share transfer is illegal and can be challenged in a court, she might not want to bother to challenge it if understands that she couldn't control the company with less than a majority stake anyway. It is essential in any case to have a pre-signed undated share transfer form in case your wife predeceases you and this is a good way to explain it to her. You can also have her will the shares to you as an additional guard against her family members suddenly getting legally wised up. The same applies to the balancing shareholder.

[dsfbrit]

I thought about these points for some considerable time and decided to play 'devils advocate'. I am not trying to be a smartarse here, but the method you suggest seems full of downsides?

I have thought about your point 1 and a mechanism that might improve security here would be to have a balancing shareholding in the name of some one who is your close friend and no connection to your wife, so she doesn't have 50% or more and the ability to fire the board and sell the property.

A close friend - not such an easy thing to have a Thai that is a close friend. Even after being on this planet for 50 years I only have 3 maybe 4 people I would consider to be a close friend. No Thais yet sadly. Also a wife may not have a close connection to my friend now - but in some years to come who knows

Thus, if the foreign shareholding is 49% this balancing shareholding would be 2%. If the foreign shareholding is 39%, it would be 11% and so on. You could also perhaps do a long lease of the property in your personal name from your company.

If I were to do long lease from the company there would be quite a considerable tax to pay - wouldn't there ?

If you do business and get some retained profits in the company, you can pay some dividends to the wife and yourself, if you are the main shareholders.

On the other hand it is more convincing that your wife should be a shareholder in your business than a random nominee. Thai families usually structure their businesses in this way. Assuming no problems from the FBA or the Land Code, this structure is safer in the event of a relationship breakdown than transferring the property to your wife and leasing it back as she doesn't have absolute ownership of the property or majority control of the company.

If the property and land were removed from the company and leased back from the wife as the owner, then this is very safe for 30 years-even if she dies - as long as the lease is written correctly.

It is also easier to transfer her shares to some one else than to transfer ownership of the land,if it is in her name.

Although I realize that this type of share transfer is illegal and can be challenged in a court, she might not want to bother to challenge it if understands that she couldn't control the company with less than a majority stake anyway.

the trouble is she might want to challenge it - then what

It is essential in any case to have a pre-signed undated share transfer form in case your wife predeceases you and this is a good way to explain it to her. You can also have her will the shares to you as an additional guard against her family members suddenly getting legally wised up. The same applies to the balancing shareholder.

A Will can be changed very easily - overnight in fact - so if the relationship changed so would the Will

[JimmyGreaves]

Rolling this round again for new members etc

[Capealava]

The land is in my wifes name with a morgage for the house in my wifes name and me as the lender.

Smartest of the lot ( safest too )

Hello Can you please explain this morgage relationship. Is this through a bank? Or have you put together a morgage through a lawyer-lending your wife the money? I do not understand, but it sounds good.

[Pi Sek]

Pridyathorn's departure may be a positive here. With any luck the other obvious foreigner hater in the cabinet, the Commerce Minister Krirk-krai will go too in the reshuffle. At any rate Sarayud has seen that Pridyathorn's anti-foreigner stance did nothing to help the survival chances of his government and may now want to leave the FBA amendments on a back burner, given the huge problems he is facing with the TRT resurgence, the constitutional referendum and his failure in the South. In fact this government's chances of lasting till the next election are not looking so great now. If Sarayud is also replaced, his successor would have an even tougher job to establish credibility in a very short space of time and might not feel any sense of ownership or the FBA amendments.

Land owning companies still face another problem from the Land Code but delaying the FBA amendments would probably give some more breathing space before the possibility of systematic checks could loom. Without any impetus for the Commerce Ministry from the FBA amendments the Lands Dept would have to push the Business Development Department to help it track down illegal land ownership without any benefit to the Commerce Ministry. Not wanting to encourage complacency but feeling more inclined to watch political development for a bit before embarking on expensive restructuring.

Wow - that's one of the most intelligent posts I've seen for ages! Very good, Arkady.

[scotsman]

The land is in my wifes name with a morgage for the house in my wifes name and me as the lender.

Smartest of the lot ( safest too )

Hello Can you please explain this morgage relationship. Is this through a bank? Or have you put together a morgage through a lawyer-lending your wife the money? I do not understand, but it sounds good.

It was a mortgage set up by our lawyer for me to lend my g/f the money to buy our house as i was only married with buddha at that time. The mortgage was for 20 years with my g/f paying me 10,000 baht a month but it was frozen. So my g/f did not have to pay anything at that time. It was set up for my protection just incase my g/f wanted to sell or throw me out, I could just unfreeze the mortgage and she would have to start paying me if that was to happen. When I got married under Thai law I had to scrap the mortgage as your wife cant buy property under that setup. So I had to set up a 30 year usufruct but you can get a lifetime usufruct now and that gives me back my protection from family or wife. I hope that helps you understand.

[Arkady]

Pridyathorn's departure may be a positive here. With any luck the other obvious foreigner hater in the cabinet, the Commerce Minister Krirk-krai will go too in the reshuffle. At any rate Sarayud has seen that Pridyathorn's anti-foreigner stance did nothing to help the survival chances of his government and may now want to leave the FBA amendments on a back burner, given the huge problems he is facing with the TRT resurgence, the constitutional referendum and his failure in the South. In fact this government's chances of lasting till the next election are not looking so great now. If Sarayud is also replaced, his successor would have an even tougher job to establish credibility in a very short space of time and might not feel any sense of ownership or the FBA amendments.

Land owning companies still face another problem from the Land Code but delaying the FBA amendments would probably give some more breathing space before the possibility of systematic checks could loom. Without any impetus for the Commerce Ministry from the FBA amendments the Lands Dept would have to push the Business Development Department to help it track down illegal land ownership without any benefit to the Commerce Ministry. Not wanting to encourage complacency but feeling more inclined to watch political development for a bit before embarking on expensive restructuring.

Wow - that's one of the most intelligent posts I've seen for ages! Very good, Arkady.

Thanks for your kind words. Four months have passed since my post. Unfortunately Krirk-krai didn't get the boot from the cabinet and vowed that the amendments would be dropped over his dead body. Sarayud was too naive economically and pumped up by his own speeches on self sufficiency to realise the FBA amendments would be a real threat to the country as well as wanting to be nice to all his fellow ex-bureaucrats, however dangerous or useless they might be. The NLA approved in principle an even nastier version of the amendments which increased jail time from 3 to 5 years and removed the amnesties for foreign shareholders and Thai nominees. The last word on the FBA was that the amendments would be passed by the NLA in July or August and would be published in the Royal Gazette to become law by late August. However, things have been silent for the last two months. Possibly it will all go ahead as planned or with a slight delay. However, the Sarayud governement is now dealing with a far thornier piece of legislation which is of great importance to its military masters in the junta in the form of the National Security Act. This aims to return powers to the military they last held under the military dictators of the 70s who used the communist suppression laws to facilitate an open season on any one they disliked, particularly in Isaan and the deep South where villages were bombed to smithereens by the air force allegedly on suspicion of aiding terrorists and Muslims in the South were boiled in oil. On the other hand the FBA amendments mean nothing to the CNS and there is no reason for them to push Sarayud to have them passed. The Democrats have made clear they will throw the FBA amendments out, if they are in power and even Thai Rak Thai did the same before its dissolution. The longevity of an amended FBA seems highly questionable and Krirk-krai may find himself alone in the government in pushing for them, since Chalongphob, the finance minister, although he has been very low profile since his appointment, is a free trader. In this environment and with more pressing issues to deal with in its remaining term it is quite possible that the Sarayud government will quietly forget about the FBA amendments. It is too early say for sure but it is an even bet that the next government will be anxious to get foreign investment rolling again to boost the economy and will attempt to distance itself from the Sarayud's capital controls and FBA amendments.

I would continue to avoid expensive restructurings until the political scene is clearer. A Thai lawyer I met recently who seems quite sensible told me that, even if the amendments are passed, the first line of screening for existing companies will be to check articles of association of companies with foreign shareholders to see, if they have any preferential voting rights. He said that changing the objectives of the company to eliminate Annex 1 and Annex 2 businesses, as some TV posters have suggested, is pointless and may even draw unwelcome attention to the company. Company objectives are usually very broad boilerplate and are not regarded by any one as a guide to what the company actually does. In any case, if you don't have a preference share structure, it wouldn't make any difference, since your company is entitled to do those businesses, many of which require a special licence anyway. Another view he expressed which is contrary to those of some TV posters who are advocating a very cautious approach is that it would be extremely difficult to go after a company majority held by a foreigner's legally married Thai spouse, if it is operating a genuine business, as that would deny a Thai-foreign couple the right to operate a family business which is the core business structure in Thailand. Capital for a wife's investment can be provided in the form a dowry.

The best advice seems to be: for those with preference share structures - restructure or be prepared to restructure to eliminate the prefs at short notice if the FBA gets amended; for those with no business or work permit or not filing accounts - fulfill these legal requirements that are nothing to do with the FBA amendments; for those operating a business legally and filing accounts - wait and see which way the wind blows.

[dsfbrit]

Pridyathorn's departure may be a positive here. With any luck the other obvious foreigner hater in the cabinet, the Commerce Minister Krirk-krai will go too in the reshuffle. At any rate Sarayud has seen that Pridyathorn's anti-foreigner stance did nothing to help the survival chances of his government and may now want to leave the FBA amendments on a back burner, given the huge problems he is facing with the TRT resurgence, the constitutional referendum and his failure in the South. In fact this government's chances of lasting till the next election are not looking so great now. If Sarayud is also replaced, his successor would have an even tougher job to establish credibility in a very short space of time and might not feel any sense of ownership or the FBA amendments.

Land owning companies still face another problem from the Land Code but delaying the FBA amendments would probably give some more breathing space before the possibility of systematic checks could loom. Without any impetus for the Commerce Ministry from the FBA amendments the Lands Dept would have to push the Business Development Department to help it track down illegal land ownership without any benefit to the Commerce Ministry. Not wanting to encourage complacency but feeling more inclined to watch political development for a bit before embarking on expensive restructuring.

Wow - that's one of the most intelligent posts I've seen for ages! Very good, Arkady.

Thanks for your kind words. Four months have passed since my post. Unfortunately Krirk-krai didn't get the boot from the cabinet and vowed that the amendments would be dropped over his dead body. Sarayud was too naive economically and pumped up by his own speeches on self sufficiency to realise the FBA amendments would be a real threat to the country as well as wanting to be nice to all his fellow ex-bureaucrats, however dangerous or useless they might be. The NLA approved in principle an even nastier version of the amendments which increased jail time from 3 to 5 years and removed the amnesties for foreign shareholders and Thai nominees. The last word on the FBA was that the amendments would be passed by the NLA in July or August and would be published in the Royal Gazette to become law by late August. However, things have been silent for the last two months. Possibly it will all go ahead as planned or with a slight delay. However, the Sarayud governement is now dealing with a far thornier piece of legislation which is of great importance to its military masters in the junta in the form of the National Security Act. This aims to return powers to the military they last held under the military dictators of the 70s who used the communist suppression laws to facilitate an open season on any one they disliked, particularly in Isaan and the deep South where villages were bombed to smithereens by the air force allegedly on suspicion of aiding terrorists and Muslims in the South were boiled in oil. On the other hand the FBA amendments mean nothing to the CNS and there is no reason for them to push Sarayud to have them passed. The Democrats have made clear they will throw the FBA amendments out, if they are in power and even Thai Rak Thai did the same before its dissolution. The longevity of an amended FBA seems highly questionable and Krirk-krai may find himself alone in the government in pushing for them, since Chalongphob, the finance minister, although he has been very low profile since his appointment, is a free trader. In this environment and with more pressing issues to deal with in its remaining term it is quite possible that the Sarayud government will quietly forget about the FBA amendments. It is too early say for sure but it is an even bet that the next government will be anxious to get foreign investment rolling again to boost the economy and will attempt to distance itself from the Sarayud's capital controls and FBA amendments.

I would continue to avoid expensive restructurings until the political scene is clearer. A Thai lawyer I met recently who seems quite sensible told me that, even if the amendments are passed, the first line of screening for existing companies will be to check articles of association of companies with foreign shareholders to see, if they have any preferential voting rights. He said that changing the objectives of the company to eliminate Annex 1 and Annex 2 businesses, as some TV posters have suggested, is pointless and may even draw unwelcome attention to the company. Company objectives are usually very broad boilerplate and are not regarded by any one as a guide to what the company actually does. In any case, if you don't have a preference share structure, it wouldn't make any difference, since your company is entitled to do those businesses, many of which require a special licence anyway. Another view he expressed which is contrary to those of some TV posters who are advocating a very cautious approach is that it would be extremely difficult to go after a company majority held by a foreigner's legally married Thai spouse, if it is operating a genuine business, as that would deny a Thai-foreign couple the right to operate a family business which is the core business structure in Thailand. Capital for a wife's investment can be provided in the form a dowry.

The best advice seems to be: for those with preference share structures - restructure or be prepared to restructure to eliminate the prefs at short notice if the FBA gets amended; for those with no business or work permit or not filing accounts - fulfill these legal requirements that are nothing to do with the FBA amendments; for those operating a business legally and filing accounts - wait and see which way the wind blows.

Arkady, yet another admirer here heaping praise on a post of yours - I fully agree with this argument.

My only minor addition would be to suggest that 'seeing which way the wind blows' would involve waiting quite some time after/if the FBA is amended and see how things are actually implemented. Wait for a couple of court cases at least or some firm evidence of true implementation before rushing to do anything.

[lazeeboy]

The land is in my wifes name with a morgage for the house in my wifes name and me as the lender.

Smartest of the lot ( safest too )

Hello Can you please explain this morgage relationship. Is this through a bank? Or have you put together a morgage through a lawyer-lending your wife the money? I do not understand, but it sounds good.

It was a mortgage set up by our lawyer for me to lend my g/f the money to buy our house as i was only married with buddha at that time. The mortgage was for 20 years with my g/f paying me 10,000 baht a month but it was frozen. So my g/f did not have to pay anything at that time. It was set up for my protection just incase my g/f wanted to sell or throw me out, I could just unfreeze the mortgage and she would have to start paying me if that was to happen. When I got married under Thai law I had to scrap the mortgage as your wife cant buy property under that setup. So I had to set up a 30 year usufruct but you can get a lifetime usufruct now and that gives me back my protection from family or wife. I hope that helps you understand.

this ok unless her new boy freind pays the 10000b mortgage for her ,not a lot to find every month and you will be out on the street

[scotsman]

Well if that happened to me way back then I would be ok about it as i would get my money back with % for 20 years because if they don"t pay even 1 or 2 months you can get them out and find someone else. It was the best protection at that time but yes you have to have a little bit of trust for your g/f to set this up but I think 10,000 baht a month plus % way back then is a lot of money for any Thai boyfriend to pay for our 2 bed room house. Also you would have found out your g/f was no good, but anyway it work out ok for me I have been happily married now for over 7 years.

[klikster]

Company route for me.

Too many gaping loopholes in the lease option for my taste.

Never in a hundred years would I buy through via romantic attachment.

Did the "Thai Relationship" option mention "romantic"?

If so, I hereby withdraw my vote.

[klikster]

Thai wife bought the land then I leased it from her for 30+30 yrs. The lease specifically states that I own the house and everything else subsequently built on it. (So in case she dies before I do whoever inherits the land from her as stated in her will must abide by the lease as well). The lease was drawn up by a Thai lawyer, but like every contract ever written there's always a f#*ing lawyer and court ready to overturn it any time, so until we take Shakespeare's advice and kill all the lawyers first that's just the way it's going to be, because they rule the world, whether you like it or not!

I hope you registered the lease with the land department .. and paid the tax.

[klikster]

A close friend - not such an easy thing to have a Thai that is a close friend. Even after being on this planet for 50 years I only have 3 maybe 4 people I would consider to be a close friend. No Thais yet sadly.

Good instincts, dsfbrit.

Having an honestly good Thai friend it one of the most common failing of expats, IMO. I'm fortunate and I do. I was 'adopted' by a Thai family that I have knows 15 years. Our nominee is one 30 something son, a professional who was born and educated in the US. He thinks more like farang than he does Thai.

And being a young professional with a substantial income, it is easy for him to get long term loans from the government savings bank.

Having good and substantial Thai friends is worth working at. The time spent is much better than time spend sitting in a bar in Soi Cowboy. I trust my Thai family much more than I would a spouse.

And the fact that K. Pa (my age) always decides at the last minute to kick in 50% of the down payment, so he doesn't feel left out, doesn't hurt anything.

[Arkady]

Pridyathorn's departure may be a positive here. With any luck the other obvious foreigner hater in the cabinet, the Commerce Minister Krirk-krai will go too in the reshuffle. At any rate Sarayud has seen that Pridyathorn's anti-foreigner stance did nothing to help the survival chances of his government and may now want to leave the FBA amendments on a back burner, given the huge problems he is facing with the TRT resurgence, the constitutional referendum and his failure in the South. In fact this government's chances of lasting till the next election are not looking so great now. If Sarayud is also replaced, his successor would have an even tougher job to establish credibility in a very short space of time and might not feel any sense of ownership or the FBA amendments.

Land owning companies still face another problem from the Land Code but delaying the FBA amendments would probably give some more breathing space before the possibility of systematic checks could loom. Without any impetus for the Commerce Ministry from the FBA amendments the Lands Dept would have to push the Business Development Department to help it track down illegal land ownership without any benefit to the Commerce Ministry. Not wanting to encourage complacency but feeling more inclined to watch political development for a bit before embarking on expensive restructuring.

Wow - that's one of the most intelligent posts I've seen for ages! Very good, Arkady.

Thanks for your kind words. Four months have passed since my post. Unfortunately Krirk-krai didn't get the boot from the cabinet and vowed that the amendments would be dropped over his dead body. Sarayud was too naive economically and pumped up by his own speeches on self sufficiency to realise the FBA amendments would be a real threat to the country as well as wanting to be nice to all his fellow ex-bureaucrats, however dangerous or useless they might be. The NLA approved in principle an even nastier version of the amendments which increased jail time from 3 to 5 years and removed the amnesties for foreign shareholders and Thai nominees. The last word on the FBA was that the amendments would be passed by the NLA in July or August and would be published in the Royal Gazette to become law by late August. However, things have been silent for the last two months. Possibly it will all go ahead as planned or with a slight delay. However, the Sarayud governement is now dealing with a far thornier piece of legislation which is of great importance to its military masters in the junta in the form of the National Security Act. This aims to return powers to the military they last held under the military dictators of the 70s who used the communist suppression laws to facilitate an open season on any one they disliked, particularly in Isaan and the deep South where villages were bombed to smithereens by the air force allegedly on suspicion of aiding terrorists and Muslims in the South were boiled in oil. On the other hand the FBA amendments mean nothing to the CNS and there is no reason for them to push Sarayud to have them passed. The Democrats have made clear they will throw the FBA amendments out, if they are in power and even Thai Rak Thai did the same before its dissolution. The longevity of an amended FBA seems highly questionable and Krirk-krai may find himself alone in the government in pushing for them, since Chalongphob, the finance minister, although he has been very low profile since his appointment, is a free trader. In this environment and with more pressing issues to deal with in its remaining term it is quite possible that the Sarayud government will quietly forget about the FBA amendments. It is too early say for sure but it is an even bet that the next government will be anxious to get foreign investment rolling again to boost the economy and will attempt to distance itself from the Sarayud's capital controls and FBA amendments.

I would continue to avoid expensive restructurings until the political scene is clearer. A Thai lawyer I met recently who seems quite sensible told me that, even if the amendments are passed, the first line of screening for existing companies will be to check articles of association of companies with foreign shareholders to see, if they have any preferential voting rights. He said that changing the objectives of the company to eliminate Annex 1 and Annex 2 businesses, as some TV posters have suggested, is pointless and may even draw unwelcome attention to the company. Company objectives are usually very broad boilerplate and are not regarded by any one as a guide to what the company actually does. In any case, if you don't have a preference share structure, it wouldn't make any difference, since your company is entitled to do those businesses, many of which require a special licence anyway. Another view he expressed which is contrary to those of some TV posters who are advocating a very cautious approach is that it would be extremely difficult to go after a company majority held by a foreigner's legally married Thai spouse, if it is operating a genuine business, as that would deny a Thai-foreign couple the right to operate a family business which is the core business structure in Thailand. Capital for a wife's investment can be provided in the form a dowry.

The best advice seems to be: for those with preference share structures - restructure or be prepared to restructure to eliminate the prefs at short notice if the FBA gets amended; for those with no business or work permit or not filing accounts - fulfill these legal requirements that are nothing to do with the FBA amendments; for those operating a business legally and filing accounts - wait and see which way the wind blows.

Arkady, yet another admirer here heaping praise on a post of yours - I fully agree with this argument.

My only minor addition would be to suggest that 'seeing which way the wind blows' would involve waiting quite some time after/if the FBA is amended and see how things are actually implemented. Wait for a couple of court cases at least or some firm evidence of true implementation before rushing to do anything.

Thanks. Yes, sitting tight makes sense in most cases and waiting for an indication of how the amendments will be implicated, if you don't mind taking a risk that you mind end up being one of the test cases, yourself. I was away for a few weeks and in reviewing my mountain of back newspapers noticed a small paragraph quoting Kirk-krai's secretary at the Commerce Secretary saying that the ministry was still intent on pushing the FBA amendments through to become law in October. Now that the NLA committee has finished its own draft it has to go back to the cabinet before going through the formal readings at the NLA. These would not take long since the NLA has drafted the latest version itself. The Retail Act which will curb the expansion of foreign retailers seems to on the same track just ahead of the FBA amendments. That could probably be seen as a test case of the governement's resolve to push through anti foreign investment legislation while it faces a barrage of more pressing issues in the remaining months of its term. It is quite possible that it will do it anyway, since Sarayud seems totally dense on economic matters and Chalongphob has turned out to have little clout in the government. Obviously be prepared to get rid of preference share structures, preferably before the amendments become law and try to replace nominees that would stick out like sore thumbs. The newer your company is the more important this is. It's hard to imagine officials wanting to establish what was the financial position of a Thai shareholder 20 years ago! And do something about dormant companies and companies that haven't filed accounts or tax returns. The implementation of the law will mainly be left to the next government which may not agree with the amendments, although there is no guarantee of this since foreigner bashing is always a cheap way to get votes in any country and Thai democracy isn't exactly sophisticated.

[Capealava]

Through Thai Relationship. 2 houses , 2 condos and a track of land. My name is attached to most of the financial documents and the children on the house reg.

So does having your name in there reaaly mean anything if she decided to leave you?? Sorry about the pesimism but there is such a thing as reality