Closing Company That Owns House

[wineman]

I bought my house the Company way because being a foreigner I cannot own the land on which the house stands. If, as Managing Director, I close the company and move permanently back to my native country,what will be the situation regarding the house?

[Gone]

I believe you would be better off selling it as a package maybe and then another foreigner can buy your house and just change company ownership and the sale of the house. This is really something you should be consulting a lawyer with though.

[craigt3365]

I think you'll do better with this if we move the topic over to the real estate forum. OK?

Topic Moved.

[Delight]

I am no expert ,but I suspect that you cannot just close a company which has assets (or liabilities).

You will need to dispose of the asset.

My thoughts are that the company could sell the land to a Thai National -who gets the house for free(worst case) or you sell the company(with land and house) for market price.

If you go for option 1 then you can close the company when the asset is disposed of.

I understand that closing a company is more expensive than creating a company.

[BrianCR]

Delight - correct answer, before a company can be closed down (with full board of director approval) all assets need to be disposed of and proceeds distributed to the companies shareholders

PS In a genuine company the directors would call an extraordinary general meeting, put the proposal (and reason) to the shareholders who would then be asked to vote! As soon of the documents will be required by you to close down your "company" a Thai lawyer will be needed

Edited May 7, 2013 by BrianCR

[rayongchelsea]

Beware of the taxes if disposal is made to an individual and not as a company.

[p_brownstone]

Your Post really makes no sense.

If "your" Company has a House as its main (only?) Asset why are you simply asking how to "Close the Company"?

Why would you want to abandon the original Investment and walk away (or try to?).

Thai Company Law is not as immature as some here may try to imply.

Patrick

Edited May 7, 2013 by p_brownstone

[mr.buffalo]

I am doing exactly the same thing as the OP. My friend's Thai wife is buying my house and I have been told it is going to cost roughly 24k baht to wind down the company and transfer owenership.

[jbrain]

I am doing exactly the same thing as the OP. My friend's Thai wife is buying my house and I have been told it is going to cost roughly 24k baht to wind down the company and transfer owenership.

Closing down the company may cost approximate 25.000 Baht if you can find a reasonable priced accountant, most will charge 30.000 +.

Transfer of the house is completely separate and has to paid at the land registration office, I guess transfer tax and some other taxes will come to a total of about 5% of value set by the land office.

[fakename]

Seems like a company with a house would have more value, than no company and a house.

[mr.buffalo]

Transfer of the house is completely separate and has to paid at the land registration office, I guess transfer tax and some other taxes will come to a total of about 5% of value set by the land office.

Yes you are quite correct about the transfer fee. My mistake.

[BrianCR]

Oh God, are you all listening to yourselves? Total rubbish, not that many "real companies" are closed down - maybe they are amalgamated into another company (with their assets intact) or maybe they are nominated companies, who are now about to understand the stupidity of what their expensive lawyer gained when he gave them assistance and advice that benefited him!

[Arkady]

The procedure to dissolve a company takes some time because the Commerce Minister needs to ensure there are no outstanding liabilities before allowing the assets to be divided up amongst shareholders. I think it takes 1-2 years.

[LeCharivari]

Decide what you intend doing with the house first.

If you are selling it and the buyer wants a company you will save the property transfer taxes (around 6%) and only pay a small fee to change directors/owners of the company (best scenario).

If you sell it to a nominee first then re-sell it you will pay property taxes each time (ie. twice), as well as company tax on the profits of the sale (worst scenario).

If the buyer of the house doesn't want the company you will be liable for property transfer taxes and company tax on the profits of the sale (middle scenario).

As has been pointed out, closing a company can take time although this depends on when you do it in the tax year.

You may also, if you are very unlucky, find that you are liable for local taxes on any property owned by a company which are not covered by your normal annual tax accounts - there is no obligation on the local office to tell you about this and they are chargeable in arrears, with interest, and if you bought a company and house together you could also be liable for any local taxes the previous owner may not have paid! Some areas charge these taxes, some don't. I was lucky to sell my company owned house to my Thai partner when property transfer taxes were briefly reduced to around 1% and then close the company. A few months later I was summoned to pay the local annual land tax (67 baht per rai per year if you own more than one rai) and was told that we were also liable for the local tax on company owned land, which with interest came to well over half a million baht; as the company had been closed, legally, and was a limited company, the accountant (from Bangkok) checked on the spot and told me that there was no liability for anything other than the 67 baht (plus a 6 baht fine for late payment).

[scorecard]

I am doing exactly the same thing as the OP. My friend's Thai wife is buying my house and I have been told it is going to cost roughly 24k baht to wind down the company and transfer owenership.

Wind down the company and transfer ownership are different subjects:

- Wind down means close the company / deregister the company as a juristic entity. And yes there are fees involved. I've been checking this recently because I will soon have no further use for 'my' company. Lawyers (I wouldn't actually use a lawyer for this purpose, because their fees are outrageous for what is a quite mechanical process, but does involve several steps, and does involve various govt. agency costs plus costs of advertisements in several newspapers a number of times), and good accountants have told me that it is unwise to just stop sending annual company reports, annual tax returns etc., and if you do this you are at risk of some backlash, especially from the Thai Revenue Dept. (tax). Fees I've been quoted:

- Thai lawyers - 90,000Baht / 60,000Baht plus the actual costs involved at several Thai Gov't agencies, costs of newspaper adverts. etc.

- Farang lawyer (in Pattaya) 185,000Baht plus the actual costs involved at several Thai Gov't agencies, costs of newspaper adverts. etc., plus 15% surcharge.

- Thai accountant 20,000 plus the actual costs involved at several Thai Gov't agencies, costs of newspaper adverts. etc.

- Transfer ownership means that the company continues but the shareholders have all changed:

- Very simple on-line process to change the shareholders names, no real need to have lawyers involved but probably wise to have a good accountant who is familiar with this subject involved. Also there are a number of better real estate agencies, in Pattaya, and I guess elsewhere, who are knowledgeable and experienced in this matter.The actual on-line transfer of shareholders names is very simple and quick and the gov't., fees involved (on-line) are quite small.

- Accountant will of course charge a fee.

- Outgoing shareholders also sometimes charge a fee for the new shareholders to 'buy the company name'. Plus of course if the company has assets (and/or liabilities) then these items would also be part of the costs to 'buy the company'.

Would you please share whether 24,000Baht includes everything (fee from the person doing the close down work and the fees at govt. agencies, newspapers etc.).

Edited May 7, 2013 by scorecard

[wineman]

Your Post really makes no sense.

If "your" Company has a House as its main (only?) Asset why are you simply asking how to "Close the Company"?

Why would you want to abandon the original Investment and walk away (or try to?).

Thai Company Law is not as immature as some here may try to imply.

Patrick

Patrick, they are for me to know and you to wonder about.

[wineman]

Thanks all for looking and for your helpful comments.

[p_brownstone]

Your Post really makes no sense.

If "your" Company has a House as its main (only?) Asset why are you simply asking how to "Close the Company"?

Why would you want to abandon the original Investment and walk away (or try to?).

Thai Company Law is not as immature as some here may try to imply.

Patrick

Patrick, they are for me to know and you to wonder about.

An intelligent and well thought out response - I did not know one could "own" a Company in Thailand whilst still in Primary School.

Patrick

[canman]

If anyone is interested in contacting a good reasonably priced property / companies lawyer in Pattaya PM me for the details. I used this lady on recommendation of a friend and cannot fault her. I have also passed her details onto another board member who used her and was happy with her work.

[LeCharivari]

I am doing exactly the same thing as the OP. My friend's Thai wife is buying my house and I have been told it is going to cost roughly 24k baht to wind down the company and transfer owenership.

Wind down the company and transfer ownership are different subjects:

- Wind down means close the company / deregister the company as a juristic entity. And yes there are fees involved. I've been checking this recently because I will soon have no further use for 'my' company. Lawyers (I wouldn't actually use a lawyer for this purpose, because their fees are outrageous for what is a quite mechanical process, but does involve several steps, and does involve various govt. agency costs plus costs of advertisements in several newspapers a number of times), and good accountants have told me that it is unwise to just stop sending annual company reports, annual tax returns etc., and if you do this you are at risk of some backlash, especially from the Thai Revenue Dept. (tax). Fees I've been quoted:

- Thai lawyers - 90,000Baht / 60,000Baht plus the actual costs involved at several Thai Gov't agencies, costs of newspaper adverts. etc.

- Farang lawyer (in Pattaya) 185,000Baht plus the actual costs involved at several Thai Gov't agencies, costs of newspaper adverts. etc., plus 15% surcharge.

- Thai accountant 20,000 plus the actual costs involved at several Thai Gov't agencies, costs of newspaper adverts. etc.

- Transfer ownership means that the company continues but the shareholders have all changed:

- Very simple on-line process to change the shareholders names, no real need to have lawyers involved but probably wise to have a good accountant who is familiar with this subject involved. Also there are a number of better real estate agencies, in Pattaya, and I guess elsewhere, who are knowledgeable and experienced in this matter.The actual on-line transfer of shareholders names is very simple and quick and the gov't., fees involved (on-line) are quite small.

- Accountant will of course charge a fee.

- Outgoing shareholders also sometimes charge a fee for the new shareholders to 'buy the company name'. Plus of course if the company has assets (and/or liabilities) then these items would also be part of the costs to 'buy the company'.

Would you please share whether 24,000Baht includes everything (fee from the person doing the close down work and the fees at govt. agencies, newspapers etc.).

The fees you have been quoted are exorbitant.

Three years ago, when I closed my company following the sale/transfer of the house we owned jointly as directors through the company to my Partner's sole name, it cost me 13,000 baht for the final annual company accounts, 16,500 baht to close the company and 13,000 baht in closing and annual company taxes mainly due to profit from the sale of the house - a total of 42,500 baht.

As subsequently confirmed (coincidentally) by a Revenue Department official (see my previous post) this was all above board and the correct procedures were followed. The lawyer I used was Khun Jirat (Visan) Voradilok of the Attorney's House on North Pattaya Road; he also did the property/house transfer for a fee of 7,000 baht - well worth paying, as although I have done simple land transfers myself his doing so more than paid for itself by minimising the transfer tax.

FYI there are no "farang lawyers" in Pattaya qualified to practice in Thailand, and of those who advertise their services at least one has been struck off in the UK for incompetence.

Edited May 8, 2013 by LeCharivari

[jacko45k]

A lot of talk regarding winding up the company....but considering what the OP wants to do, why not just sell it on, house included.

That was always an advantage of company ownership, the ease of selling it.

[lucjoker]

to sell the land and house and to close the empty company will cost you about 120 000 baht(tax and closure) and it takes about 1 year,has to be published 3 times in the news papers.( i did it ,sold my house to a thai lady)

All the rest you hear is BS.

Check it out with a good lawyer..

[kevvy]

land tax will be 6% as I just sold my company house

[JimmyGreaves]

Ok, First I have to move my partner as a company shareholder and replace her with another family member. Then I want to put the land in her name (under usufruct/lease). Should I get married before the land changes name (50/50 rule) and does this have any implications before transferring the land as no money will be involved? Althou pegh I know the land office will hit me for tax. The building permit on the house was in the company name so got no idea where I stand on that. In Hua Hin so will see a lawyer after hopefully getting some feedback here. Then as the OP wants to do will close the company.

[comserve]

I am doing exactly the same thing as the OP. My friend's Thai wife is buying my house and I have been told it is going to cost roughly 24k baht to wind down the company and transfer owenership.

It cost me 10,000 baht to close a company through a lawyer under similar circumstances.

I still get the company's office annual or bi-annual requests for a return (which I simply ignore.

[jbrain]

I am doing exactly the same thing as the OP. My friend's Thai wife is buying my house and I have been told it is going to cost roughly 24k baht to wind down the company and transfer owenership.

It cost me 10,000 baht to close a company through a lawyer under similar circumstances.

I still get the company's office annual or bi-annual requests for a return (which I simply ignore.

If you still receive the annual return requests it means you company is still active for the revenue office, and you might one day expect a knock on the door.

When your company get's closed you receive an official document with some stamps from a government agency, to confirm it's closed down.You will also have a liquidation Balance sheet stamped by the revenue office.

I hope you have that document, otherwise I guess tha lawyer made good use of your 10.000 Baht in one or another gogo-bar.

[scorecard]

I am doing exactly the same thing as the OP. My friend's Thai wife is buying my house and I have been told it is going to cost roughly 24k baht to wind down the company and transfer owenership.

Wind down the company and transfer ownership are different subjects:

- Wind down means close the company / deregister the company as a juristic entity. And yes there are fees involved. I've been checking this recently because I will soon have no further use for 'my' company. Lawyers (I wouldn't actually use a lawyer for this purpose, because their fees are outrageous for what is a quite mechanical process, but does involve several steps, and does involve various govt. agency costs plus costs of advertisements in several newspapers a number of times), and good accountants have told me that it is unwise to just stop sending annual company reports, annual tax returns etc., and if you do this you are at risk of some backlash, especially from the Thai Revenue Dept. (tax). Fees I've been quoted:

- Thai lawyers - 90,000Baht / 60,000Baht plus the actual costs involved at several Thai Gov't agencies, costs of newspaper adverts. etc.

- Farang lawyer (in Pattaya) 185,000Baht plus the actual costs involved at several Thai Gov't agencies, costs of newspaper adverts. etc., plus 15% surcharge.

- Thai accountant 20,000 plus the actual costs involved at several Thai Gov't agencies, costs of newspaper adverts. etc.

- Transfer ownership means that the company continues but the shareholders have all changed:

- Very simple on-line process to change the shareholders names, no real need to have lawyers involved but probably wise to have a good accountant who is familiar with this subject involved. Also there are a number of better real estate agencies, in Pattaya, and I guess elsewhere, who are knowledgeable and experienced in this matter.The actual on-line transfer of shareholders names is very simple and quick and the gov't., fees involved (on-line) are quite small.

- Accountant will of course charge a fee.

- Outgoing shareholders also sometimes charge a fee for the new shareholders to 'buy the company name'. Plus of course if the company has assets (and/or liabilities) then these items would also be part of the costs to 'buy the company'.

Would you please share whether 24,000Baht includes everything (fee from the person doing the close down work and the fees at govt. agencies, newspapers etc.).

The fees you have been quoted are exorbitant.

Three years ago, when I closed my company following the sale/transfer of the house we owned jointly as directors through the company to my Partner's sole name, it cost me 13,000 baht for the final annual company accounts, 16,500 baht to close the company and 13,000 baht in closing and annual company taxes mainly due to profit from the sale of the house - a total of 42,500 baht.

As subsequently confirmed (coincidentally) by a Revenue Department official (see my previous post) this was all above board and the correct procedures were followed. The lawyer I used was Khun Jirat (Visan) Voradilok of the Attorney's House on North Pattaya Road; he also did the property/house transfer for a fee of 7,000 baht - well worth paying, as although I have done simple land transfers myself his doing so more than paid for itself by minimising the transfer tax.

FYI there are no "farang lawyers" in Pattaya qualified to practice in Thailand, and of those who advertise their services at least one has been struck off in the UK for incompetence.

Thanks for sharing and quite interesting, also thanks for the name of Khun Jirat.

Since I posted my earlier comments on this subject I've been approached by two farang who are interested to take over the company name. In both cases they would pay all costs of the share transfer etc., but if I go this route I will ensure there are no 'loose ends' which come back at me at some future date.

Your comment on 'farang lawyers' is also very interesting. I'm aware of a farang in Pattaya who claims to be a qualified lawyer, he offers short term financing but as a security the borrower has to actually transfer the Thai company to him as the farang shareholder and to the Thais he nominates, with his 'promise' that he will then transfer the company back to the borrower when the loan is repaid. No further comment needed.

Thanks again.

[rayongchelsea]

10000 baht to close a company, no way..what was your annual audit fee?

[LeCharivari]

to sell the land and house and to close the empty company will cost you about 120 000 baht(tax and closure) and it takes about 1 year,has to be published 3 times in the news papers.( i did it ,sold my house to a thai lady)

All the rest you hear is BS.

Check it out with a good lawyer..

BS? I must have dreamt it all!

The amount of tax you pay when selling a house obviously depends on the value of the house and this has nothing to do with the cost of closing a company. On a property valued at 10 million baht, for example, you'll pay around 600,000 in tax but on a property valued at 2 million you'd pay around 120,000.

This transfer tax is only for selling the house and has nothing to do with any taxes and charges for closing the company. They are two totally separate transactions and should.be billed completely separately, so the idea that the cost of the two together should be "about 120,000 baht" is nonsense.

How long it takes to close the company and how much it costs is as I outlined in my post and some of the steps are far simpler and cheaper than

some people seem to think - the newspaper ads, for example, can be in consecutive copies of a local paper.

Don't confuse things by treating the house sale and closing the company as one transaction, as lucjoker has.

[LeCharivari]

I am doing exactly the same thing as the OP. My friend's Thai wife is buying my house and I have been told it is going to cost roughly 24k baht to wind down the company and transfer owenership.

It cost me 10,000 baht to close a company through a lawyer under similar circumstances.

I still get the company's office annual or bi-annual requests for a return (which I simply ignore.

If you still receive the annual return requests it means you company is still active for the revenue office, and you might one day expect a knock on the door.

When your company get's closed you receive an official document with some stamps from a government agency, to confirm it's closed down.You will also have a liquidation Balance sheet stamped by the revenue office.

I hope you have that document, otherwise I guess tha lawyer made good use of your 10.000 Baht in one or another gogo-bar.

Agreed. 10,000 baht just to close the company is possible (just, and a bargain!) as long as that doesn't include your tax and final accounts which would be at least another 10,000 or 20,000. If you only paid 10,000 altogether you could have a problem.