Clarification Required - Fet When Buying Via A Thai Company.

[Delight]

I have spoken to a couple of Farang –both have condos using the Thai company approach.Both claim that the F E T (Foreign Exchange Transfer form) was not required as
part of the purchase. One Farang purchased new from the developer-the other was a resale.

Therefore ,if so , then a condo can be bought and re -sold without the need for the FET. Where a resale is concerned the purchaser has no need to bring funds into Thailand.

Possibly it also simplifies inheritance process.

Can anybody clarify the position for certain?

[PattayaPhom]

FET is exactly that. Why would a Thai company need an FET to purchase a condo

[oracle]

A Thai company does not need a fet form to register ownership, that requirement is only for foreigners.

I don't think it make the inheritance proces easier but more complicated, your heirs do not inherit the condo unit itself but only shares in a Thai company, and that transfer is not as simple as it seems, and does not automatically give control, these shares are not bearer shares, this transfer has to be authorized by the company and the shares actually have to be transfrered at the dbd, then you need all kinds of documents making it a hassle, then dealing with maybe a majority Thai shareholders, a deceased foreign director unable to sign....

The company route for foreign property ownership is rubbish any way. I would personally never consider this option for a condo when I can own a condo in my own name. If foreign ownership is not available you go to the next condo. Then the risks of the gov changes the rules, the additional costs involved, besides the yearly costs for mainaining the company, the tax yoy must pay under the housing and land tax act for company owned properties, unless its sole purpose is a company office, but that is probably not the case. Check the condo regulations, if you can use it as a company address in the first place!

[Delight]

A Thai company does not need a fet form to register ownership, that requirement is only for foreigners.

I don't think it make the inheritance proces easier but more complicated, your heirs do not inherit the condo unit itself but only shares in a Thai company, and that transfer is not as simple as it seems, and does not automatically give control, these shares are not bearer shares, this transfer has to be authorized by the company and the shares actually have to be transfrered at the dbd, then you need all kinds of documents making it a hassle, then dealing with maybe a majority Thai shareholders, a deceased foreign director unable to sign....

The company route for foreign property ownership is rubbish any way. I would personally never consider this option for a condo when I can own a condo in my own name. If foreign ownership is not available you go to the next condo. Then the risks of the gov changes the rules, the additional costs involved, besides the yearly costs for mainaining the company, the tax yoy must pay under the housing and land tax act for company owned properties, unless its sole purpose is a company office, but that is probably not the case. Check the condo regulations, if you can use it as a company address in the first place!

Thanks for your reply

I take it then if a foreigner purchased a condo which was in a Thai Company –it is possible ,if both parties agree ,not to bring any funds into Thailand

Your statement:

The company route for foreign property ownership is rubbish any way

Consider this –if this device did not exist then condos in locations such as Pattaya etc. would simply not get built-unless the market can stand that most of 51% Thai National allocation of units will remain empty.

Edited March 22, 2013 by Delight

[oracle]

I know it works like this, and it is all possible in Thailand, but that does not make it all ok. Leave the condos empty, maybe the gov will allow a higher percentage of foreign ownership in certain areas, like they did in the period 1999 - 2004.

[Langsuan Man]

The purpose of a Foreign Exchange Transfer form is so that the money can legally be repatriated out of Thailand. Note the word legally

If you purchased a condo within the foreign quota then you would need a FET later on, but there is no requirement to obtain one, just to purchase a condo. All the seller wants is the cash and could care less where the money comes from. The land office also could care less where the money comes from to register the chanote, but if the buyer ever wants to prove that the money came from off shore then they will have produce the FET when the property is transferred and then the original is attached to the chanote that is kept on file at the land office

Alternately the land office will not accept a FET from a Thai company for the transfer of property in a company name, the chanote is going to be in the companies name and no FET will be attached to the Chanote

[Delight]

The purpose of a Foreign Exchange Transfer form is so that the money can legally be repatriated out of Thailand. Note the word legally

If you purchased a condo within the foreign quota then you would need a FET later on, but there is no requirement to obtain one, just to purchase a condo. All the seller wants is the cash and could care less where the money comes from. The land office also could care less where the money comes from to register the chanote, but if the buyer ever wants to prove that the money came from off shore then they will have produce the FET when the property is transferred and then the original is attached to the chanote that is kept on file at the land office

Alternately the land office will not accept a FET from a Thai company for the transfer of property in a company name, the chanote is going to be in the companies name and no FET will be attached to the Chanote

Thanks for your reply.

I feel the need to correct one of your statements.

The land office also could(not) care less where the money comes from to register the chanote

It is a essential that foreigners give evidence that they have brought money into Thailand.

This is a condition of ownership

19/1 and 19/1 5 of the condo Act states:

Section 19 (1): Aliens and Juristic persons which the law treats as aliens may own a condominium unit if they qualify as one of the following types of aliens or juristic persons:

(5) Aliens or juristic persons deemed by Thai law to be aliens, who have brought into the Kingdom foreign exchange or withdrawn the money from the non-resident Baht account or withdrawn the money from the foreign currency deposit account.

What is coming across from this post is that it appears to be perfectly possible and legal to re -sell condos that are in companies,potentially, many times, with no new money entering Thailand.

I suspect that the Thai authorities do not want this to occur.

Edited March 23, 2013 by Delight

[Langsuan Man]

The purpose of a Foreign Exchange Transfer form is so that the money can legally be repatriated out of Thailand. Note the word legally

If you purchased a condo within the foreign quota then you would need a FET later on, but there is no requirement to obtain one, just to purchase a condo. All the seller wants is the cash and could care less where the money comes from. The land office also could care less where the money comes from to register the chanote, but if the buyer ever wants to prove that the money came from off shore then they will have produce the FET when the property is transferred and then the original is attached to the chanote that is kept on file at the land office

Alternately the land office will not accept a FET from a Thai company for the transfer of property in a company name, the chanote is going to be in the companies name and no FET will be attached to the Chanote

Thanks for your reply.

I feel the need to correct one of your statements.

The land office also could(not) care less where the money comes from to register the chanote

It is a essential that foreigners give evidence that they have brought money into Thailand.

This is a condition of ownership

19/1 and 19/1 5 of the condo Act states:

Section 19 (1): Aliens and Juristic persons which the law treats as aliens may own a condominium unit if they qualify as one of the following types of aliens or juristic persons:

(5) Aliens or juristic persons deemed by Thai law to be aliens, who have brought into the Kingdom foreign exchange or withdrawn the money from the non-resident Baht account or withdrawn the money from the foreign currency deposit account.

What is coming across from this post is that it appears to be perfectly possible and legal to re -sell condos that are in companies,potentially, many times, with no new money entering Thailand.

I suspect that the Thai authorities do not want this to occur.

Well I bought a house using the company route and at no time did the Land Office inquire about the source of the funds for the purchase. The law that you are quoting deals with purchase in the "farang quota", and has nothing to do with purchases outside of the quota.

If you have ever been in a bank where a Thai literally fills up a shopping bag with cash for a purchase you will understand that there is nothing the government can do or will do about money laundering.... be it by a Thai or a foreigner

Edited March 24, 2013 by Langsuan Man

[BlackPuddingBertha]

The purpose of a Foreign Exchange Transfer form is so that the money can legally be repatriated out of Thailand. Note the word legally

If you purchased a condo within the foreign quota then you would need a FET later on, but there is no requirement to obtain one, just to purchase a condo. All the seller wants is the cash and could care less where the money comes from. The land office also could care less where the money comes from to register the chanote, .......

The purpose of the FET form is to prove that funds have been imported legally. A side-effect of this is that if you have this proof you can then export the funds one day, if you wish. But it is only a side-effect. The facility could even be removed by law, if the government wanted to.

The Land Office will not put a farang name on a chanote unless two conditions are satisfied:

1) this will not take the farang ownership in the building over the official quota (normally 49%)

and

2) you can prove with an FET that the money originally came from abroad (certification of source of income is also possible for those with work permits)

If those two conditions are not satisfied then you wont be buying in your name.

Edited March 24, 2013 by BlackPuddingBertha

[Delight]

The purpose of a Foreign Exchange Transfer form is so that the money can legally be repatriated out of Thailand. Note the word legally

If you purchased a condo within the foreign quota then you would need a FET later on, but there is no requirement to obtain one, just to purchase a condo. All the seller wants is the cash and could care less where the money comes from. The land office also could care less where the money comes from to register the chanote, .......

The purpose of the FET form is to prove that funds have been imported legally. A side-effect of this is that if you have this proof you can then export the funds one day, if you wish. But it is only a side-effect. The facility could even be removed by law, if the government wanted to.

The Land Office will not put a farang name on a chanote unless two conditions are satisfied:

1) this will not take the farang ownership in the building over the official quota (normally 49%)

and

2) you can prove with an FET that the money originally came from abroad (certification of source of income is also possible for those with work permits)

If those two conditions are not satisfied then you wont be buying in your name.

Thanks for your input

However can I ask that you re read my OP

It is reference acquiring a condo via a company and potential benefits of this particular system -not buying as a foreigner.

If you have a comment ref. my original request and subsequent thoughts then please post.

[BlackPuddingBertha]

It is reference acquiring a condo via a company and potential benefits of this particular system -not buying as a foreigner.

The two are closely related and in fact cannot really be disassociated from each other.

If you have a comment ref. my original request and subsequent thoughts then please post.

My reply was addressed to another poster, not to you, and was a follow-up to what he said. If you dont think it is relevant to you that's fine. It is however relevant to what the other poster was saying.

[harrry]

If you have a comment ref. my original request and subsequent thoughts then please post.

My reply was addressed to another poster, not to you, and was a follow-up to what he said. If you dont think it is relevant to you that's fine. It is however relevant to what the other poster was saying.

The purpose of a Foreign Exchange Transfer form is so that the money can legally be repatriated out of Thailand. Note the word legally

If you purchased a condo within the foreign quota then you would need a FET later on, but there is no requirement to obtain one, just to purchase a condo. All the seller wants is the cash and could care less where the money comes from. The land office also could care less where the money comes from to register the chanote, but if the buyer ever wants to prove that the money came from off shore then they will have produce the FET when the property is transferred and then the original is attached to the chanote that is kept on file at the land office

Alternately the land office will not accept a FET from a Thai company for the transfer of property in a company name, the chanote is going to be in the companies name and no FET will be attached to the Chanote

Thanks for your reply.

I feel the need to correct one of your statements.

The land office also could(not) care less where the money comes from to register the chanote

It is a essential that foreigners give evidence that they have brought money into Thailand.

This is a condition of ownership

19/1 and 19/1 5 of the condo Act states:

Section 19 (1): Aliens and Juristic persons which the law treats as aliens may own a condominium unit if they qualify as one of the following types of aliens or juristic persons:

(5) Aliens or juristic persons deemed by Thai law to be aliens, who have brought into the Kingdom foreign exchange or withdrawn the money from the non-resident Baht account or withdrawn the money from the foreign currency deposit account.

What is coming across from this post is that it appears to be perfectly possible and legal to re -sell condos that are in companies,potentially, many times, with no new money entering Thailand.

I suspect that the Thai authorities do not want this to occur.

Lets get one thing straight. You have not purchased anything. The house belongs to a company. You have an interest in that company but do not own anything else. The company may buy and sell the house or condo but it remains in the locl ownership part. At any time the deal may be investigated as they are doing in Phuket with some Russian companies and if the real thai shareholders cannot be found the whole lot can be considered fraudulent. It may not have happened yet but it can happen. You have not bought land or a condo you cannot sell anything other than your shares in the company.

[Delight]

Thanks
for your input Harrry

As I read it ,you are suggesting that the concept of buying property via a company - a company set up for that sole purpose -is a potentially dodgy approach.

I have been advised that post 2006 it is actually illegal.

However the OP referred to the process buying such existing Thai companies - without the need to bring new money into Thailand. Possible or not?

Edited March 24, 2013 by Delight

[harrry]

Thanks

for your input Harrry

As I read it ,you are suggesting that the concept of buying property via a company - a company set up for that sole purpose -is a potentially dodgy approach.

I have been advised that post 2006 it is actually illegal.

However the OP referred to the process buying such existing Thai companies - without the need to bring new money into Thailand. Possible or not?

As he is buying shares of course. The house or condo will remain in Thai ownership.

THe company could also sell the house or condo and buy another one also as Thai ownership. It could also buy another condo and keep both.

If the company is trying to sell the condo it owns to a foreigner the foreigner will have to then show the FET and there must be sufficient space in the condo for it to go to the foreign owned part.

Generally the way taken is to sell the whole company to the new buyer complete with its assets and liabilities.

Edited March 24, 2013 by harrry

[BlackPuddingBertha]

As I read it ,you are suggesting that the concept of buying property via a company - a company set up for that sole purpose -is a potentially dodgy approach.

I have been advised that post 2006 it is actually illegal.

Only someone with something to gain would tell you otherwise.

However the OP referred to the process buying such existing Thai companies - without the need to bring new money into Thailand. Possible or not?

You dont need to show the source of funds when you buy a company. You dont need to show the source of funds when a company buys a property. You can pay with cash in a bag if you like.

Maybe this explains why such deals are popular with the sort of people who have cash in bags.

But have you examined the way this hypothetical company is going to be structured? Are you aware that you have to have majority Thai shareholders and that nominee structures are illegal? I think this is an important point, and one that would put me right off the idea of doing it.

[Delight]

As I read it ,you are suggesting that the concept of buying property via a company - a company set up for that sole purpose -is a potentially dodgy approach.

I have been advised that post 2006 it is actually illegal.

Only someone with something to gain would tell you otherwise.

However the OP referred to the process buying such existing Thai companies - without the need to bring new money into Thailand. Possible or not?

You dont need to show the source of funds when you buy a company. You dont need to show the source of funds when a company buys a property. You can pay with cash in a bag if you like.

Maybe this explains why such deals are popular with the sort of people who have cash in bags.

But have you examined the way this hypothetical company is going to be structured? Are you aware that you have to have majority Thai shareholders and that nominee structures are illegal? I think this is an important point, and one that would put me right off the idea of doing it.

I ,out of academic interest, contacted a web law firm for their take on what is going on -i.e. blatant breaking of Thai Law and specifically asked why the Thai authorities turned a blind eye.

The response was 'Money makes the World go round'

I guess if action was going to be taken against this illegal activity -it would have been taken already.

[BlackPuddingBertha]

I guess if action was going to be taken against this illegal activity -it would have been taken already.

Maybe.

I can give you a list of a hundred things that have always been illegal in Thailand but for which only in the last few years has the law ever been enforced.

Who knows what will be next on the list? I certainly dont. Personally I would choose to avoid this problem completely by purchasing the official and legal way. Others can do as they please, of course.