Naam Posted July 2, 2014 Share Posted July 2, 2014 If the company is legit (i.e. trading and active), this is perfectly safe and OK since any company has the right to have its own premises. If it is just a sleeping company created just to buy the house, there could be problems in theory. But I doubt it will happen unless you have a large beachfront plot in Phuket. I am told the most common way the authorities find sleeping companies, is to look at the tax records. If you do not pay annual taxes on the company, that is a huge red flag. Create some income, the company generates, and pay taxes on that income. Spidermike Chaiyaphum, Thailand Sent from my iPad using Thaivisa Connect Thailand mobile app every company, even "sleeping" ones pays taxes. Link to comment Share on other sites More sharing options...
JesseFrank Posted July 2, 2014 Share Posted July 2, 2014 Which part of, it is not legal to register a Thai company with the sole purpose of owning a property, do you guys not understand. Take a look in the ask the lawyer forum, the question was asked and answered there recently. Byeeeee what part of nobody is stupid enough to establish a company with the sole purpose of owning landed property is it you don't understand? So you mean all those thousand of companies registered only to own a house, including yours, do real trading and the trading on their balance sheet is not something the accountant just dreamed up to make the company " look " legal ? Link to comment Share on other sites More sharing options...
Naam Posted July 2, 2014 Share Posted July 2, 2014 I would not go down this route. 1. The company has to be majority owned by Thais, although you can have sole signing rights. The Thais could, however get together and outvote you...... 2. If you are buying an existing company, it is difficult to find out of there are any debts taken on by the company, which could come back to bite you in the bum. 3. It is illegal for Thais to simply act as names on the company's list of shareholders unless they have paid money into the company for the shares. 4. There is no guarantee that at some point all these companies will be more closely looked at, and if they were set up solely to circumnavigate the laws of foreign ownership, you might be in for a few difficulties. The safest option is to take a 30 year lease on the land and make sure it is entered in the land departments records. The house you can own outright as your asset. It is very easy to buy stuff in Thailand, but it is very difficult to sell later, particularly as a lot of newbies pay over the odds for a property, and then have the mindset that property should always increase in value. The properties you see advertised are only a percentage of the properties that the owners would like to sell. I have heard so many times, "I wish I could sell this house" But they have resigned themselves to either living there, or trying to rent it out. Which leads me to Rent is by far the safest option, and gives you total flexibility about where to live. 1. The company has to be majority owned by Thais, although you can have sole signing rights. The Thais could, however get together and outvote you.... no they can't because usually you hold their share transfer certificates (signed blank). that of course does not prevent them to get together and have a beer And all those blank share transfer certificates have an ID card attached that has long been expired, there for is rendered useless you seem to know a lot about the 84,000 companies (status dec 2012) established companies mainly to acquire and use landed property. must have been one big investigative job. or is your claim based on the information of a friend who was told by a friend that he heard about a company who's share transfer certificates are useless? Link to comment Share on other sites More sharing options...
JesseFrank Posted July 2, 2014 Share Posted July 2, 2014 (edited) 1. The company has to be majority owned by Thais, although you can have sole signing rights. The Thais could, however get together and outvote you.... no they can't because usually you hold their share transfer certificates (signed blank). that of course does not prevent them to get together and have a beer And all those blank share transfer certificates have an ID card attached that has long been expired, there for is rendered useless you seem to know a lot about the 84,000 companies (status dec 2012) established companies mainly to acquire and use landed property. must have been one big investigative job. or is your claim based on the information of a friend who was told by a friend that he heard about a company who's share transfer certificates are useless? Naam, because you dream up some figures now doesn't make your ignorant comment more credible. MJM in soi chayapoon off third road was one of the biggest companies to register companies about 10 - 15 years ago. The owners of that company have been fugitives from law for the past 7-8 years ago, because they were involved in visa scams. Where do you think the owners of the companies registered by them got the ID cards from the shareholders renewed ? Edited July 2, 2014 by JesseFrank Link to comment Share on other sites More sharing options...
Naam Posted July 2, 2014 Share Posted July 2, 2014 dreamers are those who ignore prevailing reality and do not take into consideration how things in the Land of Smile(s) are handled. Link to comment Share on other sites More sharing options...
JesseFrank Posted July 2, 2014 Share Posted July 2, 2014 dreamers are those who ignore prevailing reality and do not take into consideration how things in the Land of Smile(s) are handled. Have you noticed that since May 22 many things have started to get handled drastically different from the past.? Especial the things that were handled in a "Land of smiles" specific way . Link to comment Share on other sites More sharing options...
Robert24 Posted July 2, 2014 Share Posted July 2, 2014 Which part of, it is not legal to register a Thai company with the sole purpose of owning a property, do you guys not understand. Take a look in the ask the lawyer forum, the question was asked and answered there recently. Byeeeee I think what you mean is that a company structure that was created by a foreigner with the only purpose to purchase property, i.e. he owns 49% of the company structure but paid for 100% of the land/property purchase, no financial contribution by the other shareholders, no activity by the other directors, absolutely no other business by this company, such a company may be considered as not acceptable and the government may force you to sell the land/property or force you to sell the 49% of the shares of the company to another Thai person. However say you have a Thai wife who is also a shareholder of this company who also contributed financially to the funds/capital of the company with which later the property was purchased, then this is considered as acceptable. There are thousands of such constructs in Thailand and I assume many are perfectly legal. If you are interested to do this, I suggest you speak to a lawyer and they will help you establish the right legal structure. 1 Link to comment Share on other sites More sharing options...
JesseFrank Posted July 2, 2014 Share Posted July 2, 2014 (edited) Which part of, it is not legal to register a Thai company with the sole purpose of owning a property, do you guys not understand. Take a look in the ask the lawyer forum, the question was asked and answered there recently. Byeeeee I think what you mean is that a company structure that was created by a foreigner with the only purpose to purchase property, i.e. he owns 49% of the company structure but paid for 100% of the land/property purchase, no financial contribution by the other shareholders, no activity by the other directors, absolutely no other business by this company, such a company may be considered as not acceptable and the government may force you to sell the land/property or force you to sell the 49% of the shares of the company to another Thai person. However say you have a Thai wife who is also a shareholder of this company who also contributed financially to the funds/capital of the company with which later the property was purchased, then this is considered as acceptable. There are thousands of such constructs in Thailand and I assume many are perfectly legal. If you are interested to do this, I suggest you speak to a lawyer and they will help you establish the right legal structure. Robert, the company has to have an income. Does your company have an official income ? When you file your balance sheet your accountant will add some business deals to the balance sheet that haven't actually happened, but the revenue department is happy because they see a balance sheet and an income. It is almost impossible for them to check all those thousands of companies if the declarings are legit. You don't pay any tax however since a certain amount, I think the first 150,000 Baht of earnings is tax free. The amount you pay to the accountant is only his fee. As Naam says, that is how things are done in Thailand, but for the past 5 years or so every year there has been a big government wig that has made some noise that the will start to crack down on this practice, only to be silenced a few weeks later. You will have noticed that the guys that came in power 22 May are not the type that get easily silenced, and they have taken big steps already in only 6 weeks time. So why would this not be their next step ? Edited July 2, 2014 by JesseFrank Link to comment Share on other sites More sharing options...
khunPer Posted July 2, 2014 Share Posted July 2, 2014 Which part of, it is not legal to register a Thai company with the sole purpose of owning a property, do you guys not understand. Take a look in the ask the lawyer forum, the question was asked and answered there recently. Byeeeee I think what you mean is that a company structure that was created by a foreigner with the only purpose to purchase property, i.e. he owns 49% of the company structure but paid for 100% of the land/property purchase, no financial contribution by the other shareholders, no activity by the other directors, absolutely no other business by this company, such a company may be considered as not acceptable and the government may force you to sell the land/property or force you to sell the 49% of the shares of the company to another Thai person. However say you have a Thai wife who is also a shareholder of this company who also contributed financially to the funds/capital of the company with which later the property was purchased, then this is considered as acceptable. There are thousands of such constructs in Thailand and I assume many are perfectly legal. If you are interested to do this, I suggest you speak to a lawyer and they will help you establish the right legal structure. Robert, the company has to have an income. Does your company have an official income ? When you file your balance sheet your accountant will add some business deals to the balance sheet that haven't actually happened, but the revenue department is happy because they see a balance sheet and an income. It is almost impossible for them to check all those thousands of companies if the declarings are legit. You don't pay any tax however since a certain amount, I think the first 150,000 Baht of earnings is tax free. The amount you pay to the accountant is only his fee. As Naam says, that is how things are done in Thailand, but for the past 5 years or so every year there has been a big government wig that has made some noise that the will start to crack down on this practice, only to be silenced a few weeks later. You will have noticed that the guys that came in power 22 May are not the type that get easily silenced, and they have taken big steps already in only 6 weeks time. So why would this not be their next step ? I think you (JesseFrank) are mixing personal income tax and corporate tax. However corporate (company) tax has been reduced after 2012 to help especially smaller companies, beginning at 15% (under 1 million baht net profit) or 20% (some special rates apply for specified companies, like SET listed, international banking etc.), but there is not a 150,000 baht or like tax-free bottom; that is due for personal income tax only. Even small companies with a minor net profit pay corporate tax. Link to comment Share on other sites More sharing options...
JesseFrank Posted July 2, 2014 Share Posted July 2, 2014 Which part of, it is not legal to register a Thai company with the sole purpose of owning a property, do you guys not understand. Take a look in the ask the lawyer forum, the question was asked and answered there recently. Byeeeee I think what you mean is that a company structure that was created by a foreigner with the only purpose to purchase property, i.e. he owns 49% of the company structure but paid for 100% of the land/property purchase, no financial contribution by the other shareholders, no activity by the other directors, absolutely no other business by this company, such a company may be considered as not acceptable and the government may force you to sell the land/property or force you to sell the 49% of the shares of the company to another Thai person. However say you have a Thai wife who is also a shareholder of this company who also contributed financially to the funds/capital of the company with which later the property was purchased, then this is considered as acceptable. There are thousands of such constructs in Thailand and I assume many are perfectly legal. If you are interested to do this, I suggest you speak to a lawyer and they will help you establish the right legal structure. Robert, the company has to have an income. Does your company have an official income ? When you file your balance sheet your accountant will add some business deals to the balance sheet that haven't actually happened, but the revenue department is happy because they see a balance sheet and an income. It is almost impossible for them to check all those thousands of companies if the declarings are legit. You don't pay any tax however since a certain amount, I think the first 150,000 Baht of earnings is tax free. The amount you pay to the accountant is only his fee. As Naam says, that is how things are done in Thailand, but for the past 5 years or so every year there has been a big government wig that has made some noise that the will start to crack down on this practice, only to be silenced a few weeks later. You will have noticed that the guys that came in power 22 May are not the type that get easily silenced, and they have taken big steps already in only 6 weeks time. So why would this not be their next step ? I think you (JesseFrank) are mixing personal income tax and corporate tax. However corporate (company) tax has been reduced after 2012 to help especially smaller companies, beginning at 15% (under 1 million baht net profit) or 20% (some special rates apply for specified companies, like SET listed, international banking etc.), but there is not a 150,000 baht or like tax-free bottom; that is due for personal income tax only. Even small companies with a minor net profit pay corporate tax. Maybe you're right, I'm not an accountant and would even have problems reading a balance sheet correctly, that was only what I heard. However I can post here a company balance sheet from this year right now, from a company that owns a house, and the yellow revenue department receipt attached to it reads 0.00 Baht . And it has been like this for many years. Link to comment Share on other sites More sharing options...
SDM0712 Posted July 2, 2014 Share Posted July 2, 2014 I've heard that it's possible to loan the money to a Thai "friend" as a mortgage to buy what you want, and then rent the property back from them on a 30 (+30 possibly) year lease... In this way, you have right of abode, and your friend cannot sell without paying you back to discharge the mortgage... Anyone else know anything about this arrangement? Yep, seen many like this, and the company route, and a number of other "clever " methods. Although there are potential pitfalls, I have never come across anyone that had a problem later on, and have never heard of one either. On the company route it's got to be 51% Thai owned, but I've always suggested something like a 60/40 split since it's less obvious. As long as they don't have voting shares and you do, it doesn't really matter because although you do not have majority ownership, you do have majority control and that is what's important. Use Thais that you know or your lawyer knows as a not so good second option, if the IDs cards have expired and you can't find them when you want to do a transfer it might be a problem. SDM Link to comment Share on other sites More sharing options...
marcusd Posted July 2, 2014 Share Posted July 2, 2014 I would not go down this route. 1. The company has to be majority owned by Thais, although you can have sole signing rights. The Thais could, however get together and outvote you...... 2. If you are buying an existing company, it is difficult to find out of there are any debts taken on by the company, which could come back to bite you in the bum. 3. It is illegal for Thais to simply act as names on the company's list of shareholders unless they have paid money into the company for the shares. 4. There is no guarantee that at some point all these companies will be more closely looked at, and if they were set up solely to circumnavigate the laws of foreign ownership, you might be in for a few difficulties. The safest option is to take a 30 year lease on the land and make sure it is entered in the land departments records. The house you can own outright as your asset. It is very easy to buy stuff in Thailand, but it is very difficult to sell later, particularly as a lot of newbies pay over the odds for a property, and then have the mindset that property should always increase in value. The properties you see advertised are only a percentage of the properties that the owners would like to sell. I have heard so many times, "I wish I could sell this house" But they have resigned themselves to either living there, or trying to rent it out. Which leads me to Rent is by far the safest option, and gives you total flexibility about where to live. 1. The company has to be majority owned by Thais, although you can have sole signing rights. The Thais could, however get together and outvote you.... no they can't because usually you hold their share transfer certificates (signed blank). that of course does not prevent them to get together and have a beer The safest option is to take a 30 year lease on the land and make sure it is entered in the land departments records. again objection Your Honour. usufructs or superficies (especially the latter which is transferable without any time limit) are exponentially safer than any lease. both methods are of course also entered in the records of the land department and the chanote. the general has government officials going through records looking for companies like this and Thai nominees.Be careful. Link to comment Share on other sites More sharing options...
khunPer Posted July 2, 2014 Share Posted July 2, 2014 (SOME QUOTES DELETED, AS OTHERWISE TOO MANY...) Robert, the company has to have an income. Does your company have an official income ? When you file your balance sheet your accountant will add some business deals to the balance sheet that haven't actually happened, but the revenue department is happy because they see a balance sheet and an income. It is almost impossible for them to check all those thousands of companies if the declarings are legit. You don't pay any tax however since a certain amount, I think the first 150,000 Baht of earnings is tax free. The amount you pay to the accountant is only his fee. As Naam says, that is how things are done in Thailand, but for the past 5 years or so every year there has been a big government wig that has made some noise that the will start to crack down on this practice, only to be silenced a few weeks later. You will have noticed that the guys that came in power 22 May are not the type that get easily silenced, and they have taken big steps already in only 6 weeks time. So why would this not be their next step ? I think you (JesseFrank) are mixing personal income tax and corporate tax. However corporate (company) tax has been reduced after 2012 to help especially smaller companies, beginning at 15% (under 1 million baht net profit) or 20% (some special rates apply for specified companies, like SET listed, international banking etc.), but there is not a 150,000 baht or like tax-free bottom; that is due for personal income tax only. Even small companies with a minor net profit pay corporate tax. Maybe you're right, I'm not an accountant and would even have problems reading a balance sheet correctly, that was only what I heard. However I can post here a company balance sheet from this year right now, from a company that owns a house, and the yellow revenue department receipt attached to it reads 0.00 Baht . And it has been like this for many years. A company do not need to have a profit, and without a profit no corporate tax is paid. Many biopharma or IT companies can show loss for years and people still invest in their shares on the stock market, expecting their products one day will hit on the market. However it is not advisable to run a small Thai company for (mainly) property ownership without some kind of net profit, at least sometime, and most accountants will also make sure there are some taxable net profit, at least after a couple of years. As I mentioned in my previous post, it is advisable – and in my opinion important – that a Thai limited company or partnership with major foreign ownership (up to 49%) includes other activities, than just being owner of a land plot leased to a foreigner (who often is both shareholder and director); hereunder having at least one Thai employee and showing some (small) profit. For your info, I am shareholder in a Thai limited company, which among other activities also invests in land plots and lease them out. Link to comment Share on other sites More sharing options...
spidermike007 Posted July 2, 2014 Share Posted July 2, 2014 If the company is legit (i.e. trading and active), this is perfectly safe and OK since any company has the right to have its own premises. If it is just a sleeping company created just to buy the house, there could be problems in theory. But I doubt it will happen unless you have a large beachfront plot in Phuket. I am told the most common way the authorities find sleeping companies, is to look at the tax records. If you do not pay annual taxes on the company, that is a huge red flag. Create some income, the company generates, and pay taxes on that income. Spidermike Chaiyaphum, Thailand Sent from my iPad using Thaivisa Connect Thailand mobile app every company, even "sleeping" ones pays taxes. I meant to create some actual business the company conducts. Associate it with something apart from just the property it holds. And then pay taxes on that. It is called the art of deflection. Spidermike Chaiyaphum, Thailand Sent from my iPad using Thaivisa Connect Thailand mobile app Link to comment Share on other sites More sharing options...
BlackJack Posted July 3, 2014 Share Posted July 3, 2014 the law requires that 51% be Thai and as major share holders they are responsible for the running of the company since when and where are shareholders responsible to run their company? please dear Sir, stop torturing me. i beg of you! I see you have had a face lift? We are talking about buying a house using a Thai company not running a company just a small point Link to comment Share on other sites More sharing options...
KittenKong Posted July 3, 2014 Share Posted July 3, 2014 what part of nobody is stupid enough to establish a company with the sole purpose of owning landed property is it you don't understand? There are plenty of people in Thailand stupid enough to do this. 2 Link to comment Share on other sites More sharing options...
oTwoPies Posted July 3, 2014 Share Posted July 3, 2014 My mindset is very very simple:- If you cannot afford to lose it do NOT buy it! cheers Link to comment Share on other sites More sharing options...
chris2004 Posted July 3, 2014 Share Posted July 3, 2014 I could never understand why anyone would buy a house (their biggest financial transaction) under an illegal scam. Unless you can easily afford to lose your house how can you sleep at night knowing that at any time the authorities could reclaim your house. Link to comment Share on other sites More sharing options...
Casual1 Posted March 5, 2015 Share Posted March 5, 2015 Slightly off topic, but hopefully someone knows the answer because they have done it/currently do it yearly...what required forms do you need to file with the IRS at tax time if you have "said" company and only have a house in "said" company name? Thanks Link to comment Share on other sites More sharing options...
Langsuan Man Posted March 6, 2015 Share Posted March 6, 2015 Slightly off topic, but hopefully someone knows the answer because they have done it/currently do it yearly...what required forms do you need to file with the IRS at tax time if you have "said" company and only have a house in "said" company name? Thanks There is no IRS in Thailand And the Internal Revenue Service in the US or the Inland Revenue Service in the UK could care less what you own in Thailand You have an accountant or lawyer do the paperwork to "pay" your annual taxes to the Department of Business Development, Ministry of Commerce but most of these companies are legally structured so that they don't make a profit so no taxes are due, just an annual audit to show that they did not make a profit Link to comment Share on other sites More sharing options...
swissie Posted March 6, 2015 Share Posted March 6, 2015 Put your mind at ease and gain some peace of mind (instead of following the guesswork trail that is already in full swing in this thread). In this sub-forum, look at "USEFRUCT' (I know, it should read Usufruct), and then focus in on post # 37. In a nutshell, there is everything you need to know about the matter. Above all, it is a reflection of the current state of affairs in Thailand as far as this matter is concerned. I would like to stress the point of "the current state of affairs". Cheers. Link to comment Share on other sites More sharing options...
SDM0712 Posted March 26, 2015 Share Posted March 26, 2015 Slightly off topic, but hopefully someone knows the answer because they have done it/currently do it yearly...what required forms do you need to file with the IRS at tax time if you have "said" company and only have a house in "said" company name? Thanks There is no IRS in Thailand And the Internal Revenue Service in the US or the Inland Revenue Service in the UK could care less what you own in Thailand You have an accountant or lawyer do the paperwork to "pay" your annual taxes to the Department of Business Development, Ministry of Commerce but most of these companies are legally structured so that they don't make a profit so no taxes are due, just an annual audit to show that they did not make a profit Under US Law American citizens are required to advise the IRS in the US of any financial set up like this that they have anywhere in the World. The point is a relevant one and something my American clients have to deal with. SDM Link to comment Share on other sites More sharing options...
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