Does A Company Have To Pay Rent?

[rishi]

Hi,

I have a couple of questions to this forum.

The scenario can be stated like this: We (my Thai wife and me farlang) have a ltd co, which currently runs only a service business, my wife can handle very well on her own. However, I have a WP that allows me to do "IT-consultancy, teach and instruct in computer usage, develop software" and am currently working on getting ready to put that into income-generating usage.

We are about to buy the company residency - a shophouse in Chiang Mai - including chanote deed. Paying in full would bring me beyond the limit of "Don't invest more in Thailand than you can handle to walk away from" - so I am only paying half and my wife is getting a loan from the bank (Kasikorn) on the other half. I know that interest is a cost, that could be avoided, but I prefer to keep sufficient funds in my homecountry to sleep well at night. The business in its present shape can handle the mortgage and I sort of believe that proceeding in the same manner as hithertho, also the next steps will work out - so that the bank loan might get terminated in let's say 2 years.

I'd prefer the house to be in the comapany's name, but this is out of the question for Kasikorn Bank. The company would have to be in existence minimum 2 years (we have 22 months to go). I'm not concerned with the human aspects of making investments in my wife's name - we're partners for good and her family would do their best to do the best they can to help me out in case she should die before me - I'm merely concerned with the authorities view on my situation, in case she actually should die before me.

My questions go like this:

1) Can we both be legally registered owners of the house? If that's the case - how do I do?

2) Does a company have to pay rent? - Or maybe it's more relevant to ask: Does my wife, and maybe I, have to pay income tax corresponding to a rent, Revenue Department considers adequate?

3) What do I need to do in order to be able to pocket the money, when selling the house in case my wife has died?

4) Would it be wise to let the company take over the house/land at a later stage - why/why not?

Any reply appreciated.

Edited April 6, 2006 by rishi

[Dragonman]

Hi,

I have a couple of questions to this forum.

The scenario can be stated like this: We (my Thai wife and me farlang) have a ltd co, which currently runs only a service business, my wife can handle very well on her own. However, I have a WP that allows me to do "IT-consultancy, teach and instruct in computer usage, develop software" and am currently working on getting ready to put that into income-generating usage.

We are about to buy the company residency - a shophouse in Chiang Mai - including chanote deed. Paying in full would bring me beyond the limit of "Don't invest more in Thailand than you can handle to walk away from" - so I am only paying half and my wife is getting a loan from the bank (Kasikorn) on the other half. I know that interest is a cost, that could be avoided, but I prefer to keep sufficient funds in my homecountry to sleep well at night. The business in its present shape can handle the mortgage and I sort of believe that proceeding in the same manner as hithertho, also the next steps will work out - so that the bank loan might get terminated in let's say 2 years.

I'd prefer the house to be in the comapany's name, but this is out of the question for Kasikorn Bank. The company would have to be in existence minimum 2 years (we have 22 months to go). I'm not concerned with the human aspects of making investments in my wife's name - we're partners for good and her family would do their best to do the best they can to help me out in case she should die before me - I'm merely concerned with the authorities view on my situation, in case she actually should die before me.

My questions go like this:

1) Can we both be legally registered owners of the house? If that's the case - how do I do?

2) Does a company have to pay rent? - Or maybe it's more relevant to ask: Does my wife, and maybe I, have to pay income tax corresponding to a rent, Revenue Department considers adequate?

3) What do I need to do in order to be able to pocket the money, when selling the house in case my wife has died?

4) Would it be wise to let the company take over the house/land at a later stage - why/why not?

Any reply appreciated.

1.No, but you can have an interest by "your" Company taking a 50 year lease on the property.

2. Yes, best to have economic rent as can be offset by Company tax relief. Accountant will advise the exact profit/loss scenario.

3.Get a good Will where you are Statutory heir.

4. Depends on personal circumstance whether you trust wife or Company Law.

Presumably you already have a lawyer/accountant for your business set up.

[1bigeater56]

A good accountant and a good attorney are always important.

Not a recommendation from any experience but I've heard That Sunbelt Chiang Mai has a good business attorney.

[rishi]

Not a recommendation from any experience but I've heard That Sunbelt Chiang Mai has a good business attorney.

Might be so. They do have a good company setup staff, but by now it's about a month ago, since I told I sincerely needed to talk to an accountant, to discuss how the heck I was supposed to do my books. Yes, they do have such one, but even after insisting a couple of times, they haven't "had the time" to make an effort on behalf of my petty business.

They'll loose a potential customer , shortly.

[rishi]

3.Get a good Will where you are Statutory heir.

I've guessed that this Will-thing were something I'd better look into (before it were too late). I'm a bit tied up financially at the moment. Do you have a suggestion on how much money is involved in getting such a will set up and properly stamped by the relevant authorities?