Legitimate Company Land Ownership

[elsewheresoon]

I understand it is a legal wrangle when it comes to land ownership under a Thai company in which a foreigner controls less than 49%.

I know as a tool to only purchase a house this is not legal but what happens if the company (even 10% foreigner owned with correct preference shares) wishes to purchase land to construct a small building to use as the companies office with a house attached and the company purchases more land as an investment.

I don't see how the latter can be illegal as there are Thai public limited companies that obviously own land listed on the stock exchange and foreigners are permitted to buy up to a quota.

My main question is if the company is legitimate, the foreigner owns a small fraction of it with correct preference share structure how long would the company have to actually be acting and doing accounts so as not to have issues at the land office?

Also a Thai limited company by default is allowed to own land for whatever reason, are there restrictions on the business type that a Thailand limited company can undertake if a foreigner has a minority share?

[ubonjoe]

Moved to the real estate forum.

[digitalchromakey]

If the company is a legitimate, trading, tax paying, annually audited Thai company with the ownership as you write, then it shouldn't be a problem.

However it would doubtless run even smoother if there were no foreign shareholders listed at all when the company goes to the land office to make the purchase, company shareholders can always be changed again at a later date.

[Robert24]

It's not illegal to have a minority foreign ownership in a company that also owns land and property. But you may want to check with a lawyer how to proceed in detail if you have a specific project.

[doublephil]

I can not see why you would have any problem. I have a 39% shareholding and I am a Director of a Thai company and purchasing land was straightforward and easy at the Land Office. Being a foreign national made no difference at all - I signed all the necessary forms and papers together with my Co-Director (Thai) - and all they required from me was a copy of the ID page of my passport + a copy of the Non-B Visa page. Other people may have had different experiences - but I am sure - in principle - it is allowed and should not be difficult.

[aboctok]

I can not see why you would have any problem. I have a 39% shareholding and I am a Director of a Thai company and purchasing land was straightforward and easy at the Land Office. Being a foreign national made no difference at all - I signed all the necessary forms and papers together with my Co-Director (Thai) - and all they required from me was a copy of the ID page of my passport + a copy of the Non-B Visa page. Other people may have had different experiences - but I am sure - in principle - it is allowed and should not be difficult.

Ahhh, so that's why they call you doublephil.

[Maestro]

Is the purchase of real estate one of the objectives of the company mentioned in the articles of association?

[lucjoker]

i was with my lawyer (Pattaya) yesterday ,and asked him about thai companies and owning land and building a house .

He told me : farang can not own land in his name.Starting a company to control the land is bending the law .

Also the shareholders must be thai with money (and be able to prove it) not let say an office worker of the lawyer (who is already in 20 other

companies ) The lawyer will have to explain how they could be in 20 companies with such a small salary.

The government is now asking land office to make a list of all companies with farang directors ,the list will be send to BKK and they will take

aktion . If you are not 100% ok you will have to stop your company (costs about 175 000 bht) and sell the land (house) to a Thai within 180 days.

He advised to close the company and sell it to my thai wife.

When i told him my wife can not buy land unless she proves it is her money (and not mine ) he smiled ,and asked how i know this ?

So , who knows more about this .I have my company for 7 years ,allway paid taxes (also on the house we build on it ) and did balance sheet every year.

Thanks

[timewilltell]

I understand it is a legal wrangle when it comes to land ownership under a Thai company in which a foreigner controls less than 49%.

I know as a tool to only purchase a house this is not legal but what happens if the company (even 10% foreigner owned with correct preference shares) wishes to purchase land to construct a small building to use as the companies office with a house attached and the company purchases more land as an investment.

I don't see how the latter can be illegal as there are Thai public limited companies that obviously own land listed on the stock exchange and foreigners are permitted to buy up to a quota.

My main question is if the company is legitimate, the foreigner owns a small fraction of it with correct preference share structure how long would the company have to actually be acting and doing accounts so as not to have issues at the land office?

Also a Thai limited company by default is allowed to own land for whatever reason, are there restrictions on the business type that a Thailand limited company can undertake if a foreigner has a minority share?

Well you see the Thais have a problem. They want foreign investment but they don't want foreign control. They know that on the whole Thais are devious and quite a few will take full advantage of your investment to your detriment. The government also gas a problem with drafting laws since there is insufficient trained talent to draft them considering the impact on other laws has to be taken into account. They do not have a competent long standing civil service structure that enables the drafting of comprehensive laws. So the result is that laws are passed that are usually quite subject to interpretation.

With Thai companies they have stopped foreigners having a controlling interest in shareholding but to stop any control by foreign directors would stem the flow of foreign investment which is undesirable so there is no law on that. On the other hand if you are a small business then they use their 'discretion' to say you are circumventing or bending the law because every Thai is brainwashed that foreigners should not be able to have anything to do with property otherwise Somchai the rice farmer and KULLASAK the fisherman will not be able to own his own home for all the foreigners owning everything. The fact that the rich Chinese - Thai pass these laws and own upwards of 98% of the land available for purchase is an irony beyond their limited understanding. So unless you are a big business you should have nothing to do with any business owning land because it is not fair to poor Somchai and you are an evil bar steward. They can't be bothered to change the law because it gives them a headache but will get you anyway because like Ariel no foreigner has any voice in Thailand nor any assistance against this injustice from their own governments who give every assistance to legal Thais residing in farang land. Not fair but true.

Sent from my iPad using ThaiVisa app

Edited September 25, 2014 by timewilltell

[lucjoker]

looks like i'm 1 of the rare farang owning a house via company?

[inzman]

looks like i'm 1 of the rare farang owning a house via company?

You aren't rare, just living in your own little bubble of complacency like thousands of other Falangs. At the whim of the Thai government this could all come crashing down upon you. It's their country and they make the rules, however skewed they are. Be aware and tread carefully.

[Robert24]

I've been hearing about this so called crackdown on nominee companies long time but so far nothing has happened. Also if you have a legitimate company with a real business that on the side also has property,I don't think there is anything illegal with this.

However if you do have a legal structure that can be viewed as nominee, then you just need to have a plan B to either sell the property to a Thai person or sell you shares in the Thai company to a Thai person. I think the government will give you a timeframe ( I think 12 months) in which you can change the structure without any fines occurred.

[dsfbrit]

Robert24, that is roughly how I see it as well. I had some friends come to visit me here in Pattaya a while ago. They were thinking of retiring out here and buying a house. They are married to each other and are both English.

They liked my house and wanted to buy one similar. I nearly had to strangle them to stop them buying anything. I kept telling them that although I 'owned' the land via the company method, I had a plan B to hand it over to my Thai wife if the wicked grim repossessor came knocking at my door to claim the land back.

They could do nothing though as they would have to put it in the name of a Thai and possibly lease it back for 30 years - why would they want to enter into an agreement like that?

So that is my plan B, it will be quite costly to shut down the company and set up the 30 year lease (up to 500K Baht I was advised a few years ago) and put the land in my wife's name. Not the end of the world though!

To the OP though I would suggest that if you have any doubts or the reason you are buying land is not 100 percent on the level, then don't buy any land. It is simply not worth the hassle.

My friends have now moved to Spain where ironically they are renting, as Property ownership in Spain is even more precarious than it is in the LOS!

[lucjoker]

Robert24, that is roughly how I see it as well. I had some friends come to visit me here in Pattaya a while ago. They were thinking of retiring out here and buying a house. They are married to each other and are both English.

They liked my house and wanted to buy one similar. I nearly had to strangle them to stop them buying anything. I kept telling them that although I 'owned' the land via the company method, I had a plan B to hand it over to my Thai wife if the wicked grim repossessor came knocking at my door to claim the land back.

They could do nothing though as they would have to put it in the name of a Thai and possibly lease it back for 30 years - why would they want to enter into an agreement like that?

So that is my plan B, it will be quite costly to shut down the company and set up the 30 year lease (up to 500K Baht I was advised a few years ago) and put the land in my wife's name. Not the end of the world though!

To the OP though I would suggest that if you have any doubts or the reason you are buying land is not 100 percent on the level, then don't buy any land. It is simply not worth the hassle.

My friends have now moved to Spain where ironically they are renting, as Property ownership in Spain is even more precarious than it is in the LOS!

What happens to plan B ,when you find out that your wife can not buy your property (nor Company) if she can not prove the money is hers ?

It seems to be forbidden to "donate" money to your wedded wife . That's why you will have to state in an official letter that the money belongs to your wife AND

she has to prove it by bankbooks ...salaries......

I can give it to my thai-farang children dough,but then it is locked in their name and not easy to sell.

[Robert24]

Well one option in such a scenario is to keep the company but sell your wife your shares in the company say for 1 baht per share. I'm sure there are more options to sort it out.

[dsfbrit]

LucJoker, it was 9 years ago I recall, 2005, when just one of Thaksin's junior ministers said they were going after people who had bought a house and land in the company name. There were thousands of posts similar to yours, which 9 years ago may have concerned me. Since then, every now and then, there is the occasional 'scare' that the authorities may come and do all sorts of terrible things to us 'landowners'.

However, for about 5 years it became a bit of a hobby of mine looking at my options and had opinions from a lot of sources.

I would have to reference so many threads on TV and other forums and personal correspondence to various law firms in LOS to make my case and to be honest I cannot be bothered any more.

In the 9 years since this all started, there has not been a single 'repossession' and even this 'crackdown' is aimed mainly at the businesses in the arena of the tourist industry.

Robert24, I haven't looked at all the notes I made for several years now. I will re-read them over the next weeks. My assessment at the time was that as long as you have enough money to sort it out, then a fix can be found.

I cannot remember all the details now, but I seem to recall that once the business is closed down after the land and house have been removed, that when I sign the 30 year lease at the Land Office, I have to sign a piece of paper saying the money is not mine and I have no claim to the land. I seem to recall that the whole event, closing the company, paying the taxes and setting up the 30 year lease came to around 500K.

It may have been a bit less than that, but on my house which I paid about 5 million Baht for, I think that was about the right figure.

I did recently discuss this with my lawyer and he says not to do anything for now, just wait and see what unfolds. He only contacted me as he has a lot of clients who have companies in the 'tourist' arena and he was really trying to contact them to let them know about the 'crackdown', but found it easier to send the email to all the companies on his list.

Otherwise he would not have bothered me at all.

I am now 60 years old and the 30 year lease would be fine for me now as I will be 90 when it expires - I suspect I will expire before then!

However, when I first moved in here I was only 48, so I figured 78 may be a bad time for me to be renegotiating a lease or I would have done the 30 year lease thing then.

[Maestro]

Removed a troll post.