Buying property in Koh Tao- Thailand

[KohTaoAllTheWay]

I have a question that I am sure has been answered here somewhere before but I cannot find it so I will ask here...

My husband and I are buying 10% of a well established business in Koh Tao and are also going to be running it. There are several foreign owners, some that live on the island some in Europe. All up I believe including us there are 4 farang shareholders. My question is, if we were to buy property using the company would be vulnerable to the other shareholders or is there some way around this? We are just trying to avoid setting another one up, although we do plan to eventually start our own company to do more business, it would be a pain to have to do it so soon. We have our eye on a property and it would be frustrating to have to wait for another!

Thank you in advance!

[Khun Jean]

I thought the whole island was a natural park and everyone is basically a squatter.

Just check if there is a chanote land title, if not then forget about it or be prepared to donate often.

Th 10% of a well established business is a favorite sales technique.

[JesseFrank]

If you buy property using a company in which you have 10% shares, then I believe that your property is for 90% owned by the other shareholders.

[KittenKong]

"My husband and I are buying 10% of a well established business in Koh Tao and are also going to be running it. There are several foreign owners, some that live on the island some in Europe. All up I believe including us there are 4 farang shareholders."

You dont know for sure how many there are? You've never met them all? Yet you are getting into bed with them? And you're even considering buying other properties via a company structure of which you only own a tiny part? You are braver than I am.

Other potentially illuminating questions:

Who owns the Thai 51% of this company? How is the voting arranged? Who is arranging your work permits?

[PattayaPhom]

Dont buy anything on Koh Tao, it will be a very expensive learning curve.

[Showbags]

Train wreck approaching....

[KohTaoAllTheWay]

Okay just to clear things up a little...

the 40% shareholders are very good friends of ours who we have known a long time and who have been running the place for 10yrs with a great track record on the island. I am not sure which to terms to use to describe the form of the company, but this company is actually owned by another company that our friends also owns. I know all the other owners except one who is living in Europe and who hasn't been on the island for years. They are all well known and respected in the community and we share many friends in common. We are not new to the island, we just haven't lived there before long term. Of course we are simply going into the 10% to give us a small level of security, we will also be making a wage to run the venue and I realise the 10% is our incentive. This is just a foot hold to get onto the island and the business is not about to disappear after 10yrs of successful trade with a great relationship with the Thai families on the island. The owners are just tired of running it and have other businesses to concentrate on. We have spent 2 yrs researching and going over there since the offer was made, it has not been made light heartedly.

Now that I have justified my decisions, I ask this...

I realise that the laws are complex with land on the island, but I also have many, many friends who own property on the island and have sold many properties with no issues. It is all about who you know on Koh Tao and apparently we are in the right network. My thoughts just turned to whether it was possible to buy property (even though technically I shouldn't be able to) using this company without risking the other western shareholders having any ownership rights, selling rights and so on. I am waiting for an answer from a few friends on the island, but just thought I would get some useful and productive help from the forum.

Our work permits, visas and everything else is being paid for by the company and sent to us this week. They are using the same accountant and lawyer all the businesses use on the island.

Reading some of the comments above, I think it would be better to start our own company now and buy property using that company. My only issue reading through some of the info I can find on Thai companies is that I will need to employ a fair few Thais, however the business I plan to start only requires me and is for the children on the island... ?

[yankee99]

Like others have said you will own 10% of your property. If you are naive in thinking that with multiple partners things cant go south up to you. Personally i am not that lazy to hand a lawyer 20,000 baht and say form a company to protect my money.

good luck

[Jubes]

You must be in with the right network or else you wouldn't be asking this question on TV would you?

[PattayaPhom]

I think you confirmed yourself the risk of buying on Koh Tao with your comment " its who you know '" that is basically a soft way of saying corruption for land purchase. Yes youll need another company but my experience of Koh Tao property albeit 7 years ago is you cant purchase land with a Chanote...maybe things have changed?

Edited February 12, 2014 by PattayaPhom

[KohTaoAllTheWay]

Like others have said you will own 10% of your property. If you are naive in thinking that with multiple partners things cant go south up to you. Personally i am not that lazy to hand a lawyer 20,000 baht and say form a company to protect my money.

good luck

Yes which is why I won't be purchasing it through the current company Yankee. I don't understand your lazy comment? I am forming a new company to start my own business later down the road, is using a lawyer lazy? Should I become one first?

Edited February 12, 2014 by KohTaoAllTheWay

[KohTaoAllTheWay]

You must be in with the right network or else you wouldn't be asking this question on TV would you?

Yeah Jubes you really showed me! This forum is full of bored bullies. I can't believe I actually bothered to use it.

[brain150]

1. You or a company can NOT own land on Koh Tao ! [period]
2. Ownership rights are traded on Koh Tao and NOT the land itself.

3. Buying anything without having full controll over it is simply naive [if not outright stupid]

4. When money gets involved, friends are usually the worst partners for business.

This is not meant personal or rude ... it's a simple truth that could keep people out of a lot of trouble and hassle.

Sadly people stop being rational when falling in love.

[iancnx]

I love Koh Tao, and would like one day to get a small holiday chalet. Don't be put off by the TV cynics and bullies. Let us know how you get on. Be good to get some first hand experience rather than armchair experts swilling Chang for breakfast.

[iancnx]

1. You or a company can NOT own land on Koh Tao ! [period]

2. Ownership rights are traded on Koh Tao and NOT the land itself.

3. Buying anything without having full controll over it is simply naive [if not outright stupid]

4. When money gets involved, friends are usually the worst partners for business.

This is not meant personal or rude ... it's a simple truth that could keep people out of a lot of trouble and hassle.

Sadly people stop being rational when falling in love.

Have you got first hand experience? Have you lived there? The traded ownership rights you mention, is this process handled by lawyers or best friends and partners? Be good to learn more about this. Thanks.

[KohTaoAllTheWay]

1. You or a company can NOT own land on Koh Tao ! [period]

2. Ownership rights are traded on Koh Tao and NOT the land itself.

3. Buying anything without having full controll over it is simply naive [if not outright stupid]

4. When money gets involved, friends are usually the worst partners for business.

This is not meant personal or rude ... it's a simple truth that could keep people out of a lot of trouble and hassle.

Sadly people stop being rational when falling in love.

Thanks brain, appreciate the honesty and the tone I am obviously going to have to keep researching and weighing up the pros and cons. You may be right, I hope not

As for friends and business. I've been in business a long time in Australia and have dealt with plenty of good and bad deals. I don't invest anything I am not willing to lose!

Thanks again though, appreciated!

[Showbags]

Same really with any company anywhere...whom ever the shareholders are..are owners of the company and all of its assets essentially.

You may be able to write this and that agreement into the Articles, but do you really want that complication for something completely separate from the business operation ?

The lazy comment above referred to you being 'possibly' to lazy to hand over some dosh to form another company and run it as what is required to run it....just take the easy option with what is already present and formed and save the extra hassle....but the extra hassle I think would be essential.

[Khun Jean]

That everyone is doing business and has 'ownership' rights still means that it is mostly illegal and you set yourself up to be hassled and even deported if you got into let's say a small disagreement with your neighbor. Thais have a lot less to loose and are often flexible enough to cope with the changing demands and situations.

Even if you are flexible, the law does not allow you to in the same extend, so you start with a large disadvantage.

If you have a workpermit and you are a manager don't go talk to tourist and shake hands with them, or sell them a drink, or etc...

The workpermit laws are beyond silly and even picking your nose can be categorized as 'work' when they want to.

If this is your first time doing business in Thailand, give yourself a maximum amount that you will spend and don't go over it until you are settled.

That means at least a year (longer is better).

After that, when you familiarized yourself with the ownership laws and having a company(not with nominees, real 51% Thai investors that can show their bank accounts when asked) that does real business (files taxes) and have real employees (at least 4 for every foreigner workpermit).

Listen to lawyers but CHECK WHAT THEY SAY!!! Ask for passages from the law books if needed.

You are on your own, accept that. Everyone else is seeing you as a target to extract money from.

[PattayaPhom]

I love Koh Tao, and would like one day to get a small holiday chalet. Don't be put off by the TV cynics and bullies. Let us know how you get on. Be good to get some first hand experience rather than armchair experts swilling Chang for breakfast.

Agreed there are a mass of cynics on this website that know nothing yet spout off the same old rubbish. However take heed, Koh Tao is a different kettle of fish, we wouldnt even touch it when I worked in Samui.

[12DrinkMore]

Why can't you just run the place and make a wage?

[mikebike]

To OP: caution to using existing company: who are the Thai 51%? You know 'most' of the farrang partners, but they make up ONLY 49% of the company. Controlling interest is held by Thais and it would be a good idea to find out who they are and realise that they could mortgage 'your' property at any time, without notice to you and leave you holding the proverbial bag.

You need to 100% understand the property laws of Thailand AND the special rules which apply to Koh Tao yourself and not rely on the word of others. You need to do much more due diligence than you would in your home country.

Edited February 12, 2014 by mikebike

[mmh8]

Okay just to clear things up a little...

the 40% shareholders are very good friends of ours who we have known a long time and who have been running the place for 10yrs with a great track record on the island. I am not sure which to terms to use to describe the form of the company, but this company is actually owned by another company that our friends also owns. I know all the other owners except one who is living in Europe and who hasn't been on the island for years. They are all well known and respected in the community and we share many friends in common. We are not new to the island, we just haven't lived there before long term. Of course we are simply going into the 10% to give us a small level of security, we will also be making a wage to run the venue and I realise the 10% is our incentive. This is just a foot hold to get onto the island and the business is not about to disappear after 10yrs of successful trade with a great relationship with the Thai families on the island. The owners are just tired of running it and have other businesses to concentrate on. We have spent 2 yrs researching and going over there since the offer was made, it has not been made light heartedly.

Now that I have justified my decisions, I ask this...

I realise that the laws are complex with land on the island, but I also have many, many friends who own property on the island and have sold many properties with no issues. It is all about who you know on Koh Tao and apparently we are in the right network. My thoughts just turned to whether it was possible to buy property (even though technically I shouldn't be able to) using this company without risking the other western shareholders having any ownership rights, selling rights and so on. I am waiting for an answer from a few friends on the island, but just thought I would get some useful and productive help from the forum.

Our work permits, visas and everything else is being paid for by the company and sent to us this week. They are using the same accountant and lawyer all the businesses use on the island.

Reading some of the comments above, I think it would be better to start our own company now and buy property using that company. My only issue reading through some of the info I can find on Thai companies is that I will need to employ a fair few Thais, however the business I plan to start only requires me and is for the children on the island... ?

your decision may be justified but the national park the peroperty has been built on is a another thing. I am pretty sure the whole place is national park and I hope the day comes soon when the anti corruption focueses on the illegal builds knocks them down etc.

[Mooner]

Be careful when owning things on national parks.

The land to be determined as national park must not be owned or legally possessed by any person other than a public body.

Within the national park, no person shall:
(1) hold or possess land, nor clear or burn the forest;

[metaben]

Just from a legal stand point (not including problems specific to Koh Tao and Thailand).

The company could buy the land/rights and lease it/them (full contract) back to you for x amount of time.

This is the only way I can see.

Edited February 12, 2014 by metaben

[iancnx]

So it looks like my holiday chalet is going to be bamboo and teak .... One day

[KohTaoAllTheWay]

Awesome found it! The way to get hold of property in Koh Tao, it is close enough to buying it and it is legal if done the right way ...

The island of Koh Tao is owned by the government of Thailand, who assigned lifelong land papers to the local community around 50 years ago. These land papers are called Por Bor Tor 5 and they give the Thai owner a lifelong title lease to either keep the land or sell it to any other Thai National. Over time, it has been demonstrated that 95 per cent of locals holding their Por Bor Tor 5 land title consider that the land is their own do not accept the claim of government ownership.It is possible for a Non-Thai national to obtain these land papers legally by registering a Thai Limited company. These companies must be 51 per cent Thai-owned, however, so you should al always be extremely certain who you are entering into agreement with. It is also strongly advised that an experienced local lawyer when buying property in Koh Tao as certain irregularities can sometimes arise.

But there is a solution to this issue. When any company purchases Koh Tao real estate and obtain the original Por Bor Tor 5 land-title paper, the owner can return it to the Thai government and receive an official updated lease from the Surat Thani Treasury Office.

A token fee and tax per rai (40m2) must then be paid annually, and when this is carried out correctly the lease is automatically renewable every 15 to 30 years – depending on the size and location of your land.

There we have it people! I am very please with myself

Edited February 12, 2014 by KohTaoAllTheWay

[iancnx]

Uuuhuhhhh, cannot wait for the expert response to this one

[amitsch]

Cant believe the bullshit some people post here!!!
Koh Tao a National Park??? Haha, what a crap!

I live here or 7 years now and i am currently planning on buying property myself.

The special situation (history of a prison island and no Chanote but only Tor Bor 5 landtitles) of Koh Tao makes it very, very tricky and you will not be the actual owner of the land - at least no just yet.... In fact every 7/11 and all the 40-50 diveshops are in fact illegal!
This is sth you have to accept and account for if investing on Koh Tao, but it does not automatically mean that you cant make a living with investment - its just some Poker Play involved.
Dont have the time to go into detail but feel free to send me a PM and i'll get in touch if you need further info. I actually just had a meeting with the Accountant that many people here use and got some pretty interesting info about the lawyer that so many use - not knowing exactly if we're talking about the same persons... Not all business owners are using the same connections!

Just be very very careful if you dont know the thai partners and your posts above indicate you dont know enough just yet!!!! ;-)

[KohTaoAllTheWay]

Oh I am waiting iancnx For those of you who gave me plenty of Sh!t on this topic, I would like to thank you. I may never have actually had the motivation to have found the Por Bor Tor 5, which by the way, applies to many of the islands in Thailand

[JesseFrank]

Awesome found it! The way to get hold of property in Koh Tao, it is close enough to buying it and it is legal if done the right way ...

The island of Koh Tao is owned by the government of Thailand, who assigned lifelong land papers to the local community around 50 years ago. These land papers are called Por Bor Tor 5 and they give the Thai owner a lifelong title lease to either keep the land or sell it to any other Thai National. Over time, it has been demonstrated that 95 per cent of locals holding their Por Bor Tor 5 land title consider that the land is their own do not accept the claim of government ownership.It is possible for a Non-Thai national to obtain these land papers legally by registering a Thai Limited company. These companies must be 51 per cent Thai-owned, however, so you should al always be extremely certain who you are entering into agreement with. It is also strongly advised that an experienced local lawyer when buying property in Koh Tao as certain irregularities can sometimes arise.

But there is a solution to this issue. When any company purchases Koh Tao real estate and obtain the original Por Bor Tor 5 land-title paper, the owner can return it to the Thai government and receive an official updated lease from the Surat Thani Treasury Office.

A token fee and tax per rai (40m2) must then be paid annually, and when this is carried out correctly the lease is automatically renewable every 15 to 30 years – depending on the size and location of your land.

There we have it people! I am very please with myself

Take a look here

http://www.thaivisa.com/forum/topic/166466-maybe-a-lawyer-or/?p=1789059

Next is Por Bor Tor 5 - This land is either farm or forest land not under ownership or control of the land office. This land is administered by a local village leader who oversees possession rights and boundaries. Sales are carried out under the supervision of this village leader and recorded locally only. This land can�t be built upon.

And here

http://www.thaivisa.com/forum/topic/235614-purchase-of-por-bor-tor-5-land/?p=2467561

PBT5 has to be in a Thai name. Cant own it in a company name or do any form of long registered lease. The only documentation is a slip of paper that's a receipt for the land tax you have to pay annually. This has the owner's, the person who pays the tax on the land, name on it. But the receipt doesnt even say where the land is or give any hint of dimensions, boundaries etc. When you buy it need to get the Pu Yai or Kamnan to witness the sale and say they agree that the seller isnt trying to sell a bit of the neighbours land without his knowledge.