Recommended ownership structure for land?

[Cosmo88]

I'm contemplating purchasing land (chanote) to be used for residential or small commercial building at a later stage. No Thai wife involved. No employees in any potential company.

I would be interested to hear from people having recent experience of land purchase about their opinions on recommended detailed ownership structures. For example, is a Thai company formation with partly preferential shares considered OK today (i.e. control by shares vs. control by votes)?

Apologies if this topic has been discussed to death, but I'm in particular interested in any recent trends.

[RubbaJohnny]

You may wish to explore the usufruct option which has many posts here and elsewhere.

You still need a Thai to hold the chanote as in all busness transactions or marriage finding a trustworthy partner is the key.

[Naam]

You may wish to explore the usufruct option which has many posts here and elsewhere.

You still need a Thai to hold the chanote as in all busness transactions or marriage finding a trustworthy partner is the key.

i [not so] humbly beg to disagree and claim the OP does not need a Thai but a Thai company as owner of the land.

[Naam]

For example, is a Thai company formation with partly preferential shares considered OK today (i.e. control by shares vs. control by votes)?

no it is not OK because nowadays preferential shares are raising red flags not only at many land offices but also with the registrar of companies.

you have three options:

-mentioning option 1 might be violating forum rules,

-option 2 is "usufruct",

-option 3 is "superficies".

option 3 is preferable to any other option!

http://www.thailawonline.com/en/property/superficies.html

[JesseFrank]

You may wish to explore the usufruct option which has many posts here and elsewhere.

You still need a Thai to hold the chanote as in all busness transactions or marriage finding a trustworthy partner is the key.

i [not so] humbly beg to disagree and claim the OP does not need a Thai but a Thai company as owner of the land.

Why do you think that these days you have to jump through many hoops to get a piece of land registered in a dormant Thai company, and that if a foreigner is listed as director of the company, the landoffice will refuse to do the registration ?

[Naam]

You may wish to explore the usufruct option which has many posts here and elsewhere.

You still need a Thai to hold the chanote as in all busness transactions or marriage finding a trustworthy partner is the key.

i [not so] humbly beg to disagree and claim the OP does not need a Thai but a Thai company as owner of the land.

Why do you think that these days you have to jump through many hoops to get a piece of land registered in a dormant Thai company, and that if a foreigner is listed as director of the company, the landoffice will refuse to do the registration ?

an incorrect statement as far as Chonburi province is concerned. but even if other land offices refuse it's a piece of cake to change directorship which is done without any involvement of the land office.

[Cosmo88]

Thanks for comments and recommendations so far.

I note that the "usufruct" and "superficies" options are "lease" / "right to use" principles, and not about "ownership".

As an investor I'm not interested in such. I'm only interested in proper freehold ownership.

Shall I take it that ownership through minority-owned Thai company is considered too risky today, due to some recent changes in law and/or its enforcement?

[JesseFrank]

You may wish to explore the usufruct option which has many posts here and elsewhere.

You still need a Thai to hold the chanote as in all busness transactions or marriage finding a trustworthy partner is the key.

i [not so] humbly beg to disagree and claim the OP does not need a Thai but a Thai company as owner of the land.

Why do you think that these days you have to jump through many hoops to get a piece of land registered in a dormant Thai company, and that if a foreigner is listed as director of the company, the landoffice will refuse to do the registration ?

an incorrect statement as far as Chonburi province is concerned. but even if other land offices refuse it's a piece of cake to change directorship which is done without any involvement of the land office.

For at least the past 4 years Pattaya will refuse registering land on a new set up company with a foreigner as director. I heard same applies to other districts.

What they do now is use a company that exists of Thais only, and even then they have to jump through hoops, and as you say after the registration change the director.

If it was all legal, why would they need to go to such an extend?

[Langsuan Man]

What are these "hoops" that you are talking about ?

It is just a form with new names that is submitted to the Department of Business Development, under the Ministry of Commerce and takes about a month to get new papers issued with new stock holders and a new director

[JesseFrank]

What are these "hoops" that you are talking about ?

It is just a form with new names that is submitted to the Department of Business Development, under the Ministry of Commerce and takes about a month to get new papers issued with new stock holders and a new director

I didn't say anything about jumping hoops to change directors. I'm saying jumping hoops to get land registered in a new set up company, since now the shareholders have to proof that they have the funds to purchase the property, and as far as I know a company ltd with the sole purpose to own a piece of land is illegal in Thailand.

[stgrhe]

The correct answer is that you cannot purchase land in Thailand without a hugh investment in Government bonds and a ministral approval. You may have habitation rights and the most common is by leasing (actually hire) but there are three more options; right of habitation, usufruct and superficies.

Controlling land the company route is illegal.

[Naam]

Thanks for comments and recommendations so far.

I note that the "usufruct" and "superficies" options are "lease" / "right to use" principles, and not about "ownership".

As an investor I'm not interested in such. I'm only interested in proper freehold ownership.

Shall I take it that ownership through minority-owned Thai company is considered too risky today, due to some recent changes in law and/or its enforcement?

-foreigners can't own land by "proper freehold ownership",

-there have been no recent changes of the laws concerning landownership,

-no proven enforcement (expropriation or fines) of the law exist,

-risk acceptance/aversion is based on individual perception,

-holding superficies rights does not differ from owning freehold but is risk free,

-holding land by a Thai majority owned company is not risk free,

-controlling a Thai company with foreign owned preferential (voting) shares is risky.

[lucjoker]

just buy land that is already in a company,transfer of director and done.

Workes fine 6 months ago.costs 7000 bht

[fletchsmile]

Thanks for comments and recommendations so far.

I note that the "usufruct" and "superficies" options are "lease" / "right to use" principles, and not about "ownership".

As an investor I'm not interested in such. I'm only interested in proper freehold ownership.

Shall I take it that ownership through minority-owned Thai company is considered too risky today, due to some recent changes in law and/or its enforcement?

-foreigners can't own land by "proper freehold ownership",

-there have been no recent changes of the laws concerning landownership,

-no proven enforcement (expropriation or fines) of the law exist,

-risk acceptance/aversion is based on individual perception,

-holding superficies rights does not differ from owning freehold but is risk free,

-holding land by a Thai majority owned company is not risk free,

-controlling a Thai company with foreign owned preferential (voting) shares is risky.

There are some exceptions on when foreigners can hold land: eg BOI and IEAT, and certain oil companies

OP might want to check out pages 46-53 of the attached. Particularly p.48

http://www.tilleke.com/sites/default/files/2011_TLB.pdf

Cheers

Fletch

[Naam]

Cosmo88

No employees in any potential company

i.e. BOI and IEAT =

[fletchsmile]

Cosmo88

No employees in any potential company

i.e. BOI and IEAT =

So that just leaves the oil rig in the back yard under the Petroleum Act then

[Naam]

Cosmo88

No employees in any potential company

i.e. BOI and IEAT =

So that just leaves the oil rig in the back yard under the Petroleum Act then

unmanned

[marcusd]

Thanks for comments and recommendations so far.

I note that the "usufruct" and "superficies" options are "lease" / "right to use" principles, and not about "ownership".

As an investor I'm not interested in such. I'm only interested in proper freehold ownership.

Shall I take it that ownership through minority-owned Thai company is considered too risky today, due to some recent changes in law and/or its enforcement?

I have a Thai company where I own not 1 share. Technically I don't own,it. But I can up to 39% without danger.

I am the. Bank with a registered mortgage with special conditions. No,issues. My,mortgage to me is on the chanote.

See a competent solicitor.

Marcusd. Via tapatalk

[Cosmo88]

Thanks for comments and recommendations so far.

I note that the "usufruct" and "superficies" options are "lease" / "right to use" principles, and not about "ownership".

As an investor I'm not interested in such. I'm only interested in proper freehold ownership.

Shall I take it that ownership through minority-owned Thai company is considered too risky today, due to some recent changes in law and/or its enforcement?

-foreigners can't own land by "proper freehold ownership",

-there have been no recent changes of the laws concerning landownership,

-no proven enforcement (expropriation or fines) of the law exist,

-risk acceptance/aversion is based on individual perception,

-holding superficies rights does not differ from owning freehold but is risk free,

-holding land by a Thai majority owned company is not risk free,

-controlling a Thai company with foreign owned preferential (voting) shares is risky.

--

These are good points, but I still have an issue with "holding superficies rights does not differ from owning freehold but is risk free".

This appears to be true w.r.t. the "usage" of the property. However, when looking at asset tradability on an open market, I think they are quite different.

Who would be interested to buy a residential or commercial property on land that utilizes a superficies right...?

Or am I missing something?

[Naam]

but I still have an issue with "holding superficies rights does not differ from owning freehold but is risk free".

what i meant is that the "rights" you enjoy do not differ from freehold whereas "lease" and "usufruct" and "company" are burdened with a bunch of negative attachments.

[nithisa78]

Interesting and intelligent. Thank you.