Help Please

[stuxv]

I am afraid it is a property question again.

My wife and I are both UK citizens living in the UK

We are in the process of having a house built in Thailand with the plan to retire there in three years.

We have gone down the setting up a company route, so far we have spent 2 million THB with another three to pay.

With the crackdown on Thai shareholders my solicitor is recommending that we are removed from the list of shareholders in the company, get the land registered and then transfer back to us.

This strikes me as very risky as we could lose a great deal of money.

I have asked my solicitor to withold any more payments until this is sorted out.

This is very worrying to me as we are not wealthy and stand to lose out big time.

Can anyone here make any suggestions as to the best way to go to lessen the damage please?

[niggle]

I am afraid it is a property question again.

My wife and I are both UK citizens living in the UK

We are in the process of having a house built in Thailand with the plan to retire there in three years.

We have gone down the setting up a company route, so far we have spent 2 million THB with another three to pay.

With the crackdown on Thai shareholders my solicitor is recommending that we are removed from the list of shareholders in the company, get the land registered and then transfer back to us.

This strikes me as very risky as we could lose a great deal of money.

I have asked my solicitor to withold any more payments until this is sorted out.

This is very worrying to me as we are not wealthy and stand to lose out big time.

Can anyone here make any suggestions as to the best way to go to lessen the damage please?

I am in a similar position. My laywer advises the wait and see option as yours does so that it can be seen how it all pans out. Certainly the target is foreign investors who then change use of the land but the truth is that no-on really knows yet.

i dont know how you stand regarding witholding furher payments.

It has also been muted to me the similar option that has been suggetsed to you. I think yes it is a further risk but it may be an only option though I am not sure about whether they would be able to transfer the land back to you as this would reinstate you as a foreign land owner which we cannot be. I think the only option is to wait and see. Lawyers alsways find a way round things, after all they are making big bucks in the land deals and they will not let this lucrative business go easily.

[GuestHouse]

1. Ask your lawyer if there is anything within the contract to build that allows you to withold payments or place the project on hold until clarrification on this matter can be made.

2. Ask your lawyer to explain what happens to the Company Assets when you close this company you are founding (Do the 51% Thai Share Holders have the right to take 51% of the Company Assets?). Get your lawyer to explain to you exactly how share holders can be prevented from taking their share of the assets if at some time in the future the assets are disposed of.

3. This idea of putting the assets in the name of the lawyer sounds extremely risky to me. I would not do so under any circumstances. Nor, while we are on the subject, would I give my Thai Lawyer Power of Attourney - Just incase that idea comes up in discussions.

[pepi1]

It sounds as if you have not formed the co yet. If so you are very lucky. Remember Thai lawyers ,In my opinion ,see us as rich pickings. As long as they get money then job done. I dont think they or agents are interested about possible recommendations- only whats in it now. Keep it simple -buy in your wifes name- you lease for 30 years--make sure there is a clause whereby you will have acess over that land to your house All in my opinion

[stuxv]

It sounds as if you have not formed the co yet. If so you are very lucky. Remember Thai lawyers ,In my opinion ,see us as rich pickings. As long as they get money then job done. I dont think they or agents are interested about possible recommendations- only whats in it now. Keep it simple -buy in your wifes name- you lease for 30 years--make sure there is a clause whereby you will have acess over that land to your house All in my opinion

Many thanks for the ideas so far, the wifes name is not an option as my wife is English not Thai, the Co is formed but the land registry has not been done yet.

[Dragonman]

It is difficult to give an opinion without sight of the Contract. Was the 2 million paid to the Developer, or is it for actual building costs undertaken to date? Is the Developer a large reputable Company? You really need to stall if the contract allows. If worst comes to worst I see the best option would be to enter into a 30 year lease with the Developer, which includes a clause for you, or your appointee, to acquire at nominal value at any time during the lease.

I would say discuss this with your lawyer, but if his suggestion is the best he can come up with, don't bother.

[stuxv]

It is difficult to give an opinion without sight of the Contract. Was the 2 million paid to the Developer, or is it for actual building costs undertaken to date? Is the Developer a large reputable Company? You really need to stall if the contract allows. If worst comes to worst I see the best option would be to enter into a 30 year lease with the Developer, which includes a clause for you, or your appointee, to acquire at nominal value at any time during the lease.

I would say discuss this with your lawyer, but if his suggestion is the best he can come up with, don't bother.

Many thanks Dragonman, the 2 million is for building costs to date, another payment is due at the end of the month.

If the developer agrees to a thirty year lease should I re negotiate the cost as he was selling the land originally?

[pepi1]

Dont forget if developer does give the ok to lease land, insert clause that you have a right of way across the land at all times to the house. Also many developers dissapear just before end of project. I am very worried for anybody thinking of buying in Thailand. God knows what is going to happen to all the people who have bought thro. Ltd Cos. Me , I would cash in as quickly as possible, try to not lose too much money and purchase in a English speaking country

[Dragonman]

It is difficult to give an opinion without sight of the Contract. Was the 2 million paid to the Developer, or is it for actual building costs undertaken to date? Is the Developer a large reputable Company? You really need to stall if the contract allows. If worst comes to worst I see the best option would be to enter into a 30 year lease with the Developer, which includes a clause for you, or your appointee, to acquire at nominal value at any time during the lease.

I would say discuss this with your lawyer, but if his suggestion is the best he can come up with, don't bother.

Many thanks Dragonman, the 2 million is for building costs to date, another payment is due at the end of the month.

If the developer agrees to a thirty year lease should I re negotiate the cost as he was selling the land originally?

You could try, but I doubt they would agree. Don't forget you will be able to acquire the land for a nominal amount if Laws change in the next 30 years, or if you find a trustworthy Thai friend. If they agree to this lease, register the structure as yours.

pepi1, whilst it does no harm in putting a clause regarding access into the lease, access is in fact implicit under Thai Law. Hence if you own a property you are guaranteed access.

[stuxv]

It is difficult to give an opinion without sight of the Contract. Was the 2 million paid to the Developer, or is it for actual building costs undertaken to date? Is the Developer a large reputable Company? You really need to stall if the contract allows. If worst comes to worst I see the best option would be to enter into a 30 year lease with the Developer, which includes a clause for you, or your appointee, to acquire at nominal value at any time during the lease.

I would say discuss this with your lawyer, but if his suggestion is the best he can come up with, don't bother.

Many thanks Dragonman, the 2 million is for building costs to date, another payment is due at the end of the month.

If the developer agrees to a thirty year lease should I re negotiate the cost as he was selling the land originally?

You could try, but I doubt they would agree. Don't forget you will be able to acquire the land for a nominal amount if Laws change in the next 30 years, or if you find a trustworthy Thai friend. If they agree to this lease, register the structure as yours.

pepi1, whilst it does no harm in putting a clause regarding access into the lease, access is in fact implicit under Thai Law. Hence if you own a property you are guaranteed access.

Many thanks guys, this is a new site to me and it has been a help already, I hope to contribute what I can over the next couple of years and then meet a lot of you when I out there full time.

There was a post in the Phuket Gazette today that seems to offer hope. I could cut and paste it but I am a luddite and this interweb gizmo still scares me

[Rinrada]

This is prob it...

Wednesday, June 7, 2006

Land Office moves to allay property bust fears

PHUKET: The Chief of the Phuket Provincial Land Office (PPLO), Supot Suwannachote, has moved to reassure businesspeople that the closer inspection of companies wanting to register land titles, as ordered by the Ministry of Interior, does not mean that transfers of ownership will be refused.

He stressed that he did not want to see a slowdown in Phuket’s booming property industry. “If your company is genuinely 51% Thai-owned, then there is no problem.”

K. Supot denied that all applications by companies with foreign shareholders are being put on hold, or that applications are being sent to Bangkok for examination.

“The first thing we do is check with the Provincial Business Development Office (BDO) whether the company has been properly set up, with foreigners owning no more than 49%.

“Where the company has a Thai MD [Managing Director] or has both Thai and foreign MDs, there is no problem. But when a Thai-registered company has a foreigner as its Managing Director, we check more carefully. For example, we check with the BDO whether the shareholding has changed so that the foreign share exceeds 49%.

“So far, we have not sent a single case up to Bangkok,” he said. Details of some applicant companies with foreign shareholders might be sent to the BDO for further checks, he said, but these checks should not take more than a month to complete. Since the order was issued on May 15, however, no cases have been sent to the BDO for checking.

The PPLO receives between 100 and 120 applications for change of ownership of land every day, he said, though most of these are transfers from one Thai to another or people wanting to register loan or lease agreements.

Since the original uproar over the tightening of checks on land transfers, matters have gone rather quiet in the property community, with concern over the brakes being put on business having, apparently, abated. Stuart Reading, Assistant Vice-President of Finance at Laguna Resorts & Hotels (LRH), said that LRH was not particularly concerned as most of its sales were on a leasehold basis, and thus did not require a change in land ownership.

But, he added, “I’m not aware of any transfers we’ve done in the past week that have [run into problems]. From what I understood this was mainly aimed at foreign developers. We’re a Thai company, so we are legally able to acquire and develop land, because we are a public company.”

BDO Chief Veerachai Tantiwathanavallop denied that checks on companies would take a month, as suggested by K. Supot. “It will take only a minute or so,” he said. “Just give me the name of the company and its registration number and I can tell you.” He confirmed that he had, to date, received no queries from the PPLO.

He noted that when people apply to set up companies, he explains to them that in order to register a Thai company the foreign shareholding must be no more than 49%.

He said that, theoretically, a company could increase its foreign shareholding to more than 49% but that it would then have to be re-registered as a foreign company, which would limit it to just 49 areas of business, all effectively in exports. “I have never had a single application of this nature,” he added.

The registration of new companies in Phuket continues apace. A total of 157 new limited-liability companies were registered in May. Of these, 50% were registered to do property business, and of those, 70% had foreign investors