Thai owned condo

[Me Yank]

Can a thai owner sell to farange thai company? If so, would thaat be part of the 59%? Thanks for any replies.

[KittenKong]

1) Yes

2) No (and you mean 49%)

Farang/Thai companies also follow the 49/51 maximum ratio, and so are considered to be Thai.

[fosseway]

Our Juristic person will not sign any clearance letters concerning a Thai 49/51% company until it is proven to be legitimate, meaning the 51% Thai shares have to be paid for with Thai funds, that is to say he will not be party to a transaction where the Lawyer and staff are signing blank share certificates.

[ThaiBob]

Our Juristic person will not sign any clearance letters concerning a Thai 49/51% company until it is proven to be legitimate, meaning the 51% Thai shares have to be paid for with Thai funds, that is to say he will not be party to a transaction where the Lawyer and staff are signing blank share certificates.

First time I have heard of that. Legally I do not understand how he cannot sign if the company has been properly registered. The legitimacy has already been determined by governmental agencies. Does juristic person have an agenda of some kind? Edited October 22, 2014 by ThaiBob

[inzman]

Sounds like he wants a payoff.

[Basil B]

I thought it was the land registry that had to check the legitimacy of a company before transferring the deeds.

If you have to ask the question then I assume you know very little of the Thai law regarding ownership of land and Thai companies, this is a mine field and it probably will be you who will get hurt.

If you are just buying for yourself, check with the Juristic person of the property you wish to buy and see if the Condominium is maxed out on the 49% of units that can bought in the name of foreigners, ( this is different thing to the 51% requirement as in a Thai company), I am sure that if the condominium has less than 50% foreign owners it needs nothing more then the Juristic person certifying that and the Condo cold be transferred to you in your own name.

Buying in your own name you will have to prove the funds came from outside Thailand.

Edited October 22, 2014 by Basil B

[fosseway]

Sounds like he wants a payoff.

Nothing like that, as I said the J.P. will not be party to signing a clearance letter for an illegally formed company, that is to say a company that cannot prove the 51% Thai ownership is genuine, and has actually been paid for by a Thai person.

He is just sticking to the law, Thai companies that are set up by a lawyer with him and his staff signing blank share certificates that are given to the foreigner to form the 51% Thai ownership is illegal, that is the reason, nothing at all to do with a payoff.

I fully understand that so many companies are formed this way, especially for a house purchase, we all know that foreigners can not buy houses in their own name, it has to be 51% Thai.

This is sometimes called a grey area, all is well with that as long as the powers that be keep looking the other way.

[ThaiBob]

Sounds like he wants a payoff.

Nothing like that, as I said the J.P. will not be party to signing a clearance letter for an illegally formed company, that is to say a company that cannot prove the 51% Thai ownership is genuine, and has actually been paid for by a Thai person.

He is just sticking to the law, Thai companies that are set up by a lawyer with him and his staff signing blank share certificates that are given to the foreigner to form the 51% Thai ownership is illegal, that is the reason, nothing at all to do with a payoff.

I fully understand that so many companies are formed this way, especially for a house purchase, we all know that foreigners can not buy houses in their own name, it has to be 51% Thai.

This is sometimes called a grey area, all is well with that as long as the powers that be keep looking the other way.

I understand his position but if the legality of the company has been determined by the proper governmental agency who is he to say otherwise? What is he going to do, review all the financial documents of the Thai shareholders and company structure? Edited October 22, 2014 by ThaiBob

[TheCruncher]

Sounds like he wants a payoff.

Nothing like that, as I said the J.P. will not be party to signing a clearance letter for an illegally formed company, that is to say a company that cannot prove the 51% Thai ownership is genuine, and has actually been paid for by a Thai person.

He is just sticking to the law, Thai companies that are set up by a lawyer with him and his staff signing blank share certificates that are given to the foreigner to form the 51% Thai ownership is illegal, that is the reason, nothing at all to do with a payoff.

I fully understand that so many companies are formed this way, especially for a house purchase, we all know that foreigners can not buy houses in their own name, it has to be 51% Thai.

This is sometimes called a grey area, all is well with that as long as the powers that be keep looking the other way.

The shareholder structure of a company are none of a JP's business, there are government agencies to determine the legality of company.

If he would refuse to sign a clearance letter with me for that reason he would have his day in court faster than he can say genuine.

[fosseway]

Our Juristic person will not sign any clearance letters concerning a Thai 49/51% company until it is proven to be legitimate, meaning the 51% Thai shares have to be paid for with Thai funds, that is to say he will not be party to a transaction where the Lawyer and staff are signing blank share certificates.

First time I have heard of that. Legally I do not understand how he cannot sign if the company has been properly registered. The legitimacy has already been determined by governmental agencies. Does juristic person have an agenda of some kind?

I am taking here about our condo that is at the max of 49% Foreign ownership. If a Thai co-owner wants to sell to a foreigner, he has to either put it in an existing company or form a new one, either way the funds for 51% the sale price, must to be proven to paid for by a Thai. Without that being the case our J.P will not sign the clearance letter.

If a company has been registered at companies house in Chonburi, it does not automatically mean it is legitimate. company house will only be able to check the share certificates, if they conform to the 51/49% rule the company will of course be registered, problems would then only arise if the company was to be investigated.

A friend of mine was cheated out of a 25 Million Baht property that was in his company name, set up in the grey area as described above. he took the person to court and won the case, however, the judge ruled that he had up to two years to sell the property, of course to a Thai or a genuine Thai formed company. He will of course have to do just that, but at a knockdown price maybe.

[fosseway]

Sorry about this subject getting a little complicated. Lets say for example, a Thai co-owner in our building wants to sell a condo to a foreigner for 10 Million Baht, The clearance letter has to state the name of the seller, and the name of the buyer. ie Thai and Foreigner. The condo is now at 49% F.O. so it can only be sold by the Thai person to a Thai company that is 51% Thai owned. The condo, if allowed to be transferred via the 'Grey Area' route would then then become part of this company. It would become a Land Office issue if the condo transfer was deemed illegal by way of an investigation in the future. It could then cause problems for our JP if he was seen to have approved the sale. For that reason he will not approve it. This is also a condo rule that was agreed by committee, several years ago, and subsequently at an AGM.

I think you have all had enough of me bleating on about this, but is is a subject that I am involved in as a committee member, and find it interesting. So this will be my last post on the subject, and hope as a relative newcomer to this site I have not appeared to be 'Teaching Granny how to suck eggs'

[KittenKong]

Sorry about this subject getting a little complicated. Lets say for example, a Thai co-owner in our building wants to sell a condo to a foreigner for 10 Million Baht, The clearance letter has to state the name of the seller, and the name of the buyer. ie Thai and Foreigner. The condo is now at 49% F.O. so it can only be sold by the Thai person to a Thai company that is 51% Thai owned. The condo, if allowed to be transferred via the 'Grey Area' route would then then become part of this company. It would become a Land Office issue if the condo transfer was deemed illegal by way of an investigation in the future. It could then cause problems for our JP if he was seen to have approved the sale. For that reason he will not approve it. This is also a condo rule that was agreed by committee, several years ago, and subsequently at an AGM.

The building can have as many rules as it likes but I dont see how your JP could have any legal problems about approving a sale to a Thai company. Also the JP is in no position to verify the details of the finances of the company anyway.

So I suspect that this is just a rule that has been introduced in your condo to put off people who wish to buy in company name, and which has no validity in law. I expect someone will challenge it in court at some point.

[ThaiBob]

Sorry about this subject getting a little complicated. Lets say for example, a Thai co-owner in our building wants to sell a condo to a foreigner for 10 Million Baht, The clearance letter has to state the name of the seller, and the name of the buyer. ie Thai and Foreigner. The condo is now at 49% F.O. so it can only be sold by the Thai person to a Thai company that is 51% Thai owned. The condo, if allowed to be transferred via the 'Grey Area' route would then then become part of this company. It would become a Land Office issue if the condo transfer was deemed illegal by way of an investigation in the future. It could then cause problems for our JP if he was seen to have approved the sale. For that reason he will not approve it. This is also a condo rule that was agreed by committee, several years ago, and subsequently at an AGM.

The building can have as many rules as it likes but I dont see how your JP could have any legal problems about approving a sale to a Thai company. Also the JP is in no position to verify the details of the finances of the company anyway.

So I suspect that this is just a rule that has been introduced in your condo to put off people who wish to buy in company name, and which has no validity in law. I expect someone will challenge it in court at some point.

I agree. Is the Condominium Management Committee majority farang/foreign? Keeping the Committee "friendly" to the JP might be the real reason for his reluctance to approve a legal transaction.

[fosseway]

Sorry guys I did say I would not make anymore comments, but felt I had to clarify this for the final time. Please see the cut and paste below extracted from www.samuiforesale a well respected Thai law company . My point here even from my first post was to say that anyone in our condo committee plus our J.P. will not be party to sanctioning a company that is (Quote) a front for foreign ownership. This is illegal ! To challenge this by taking our J.P, or anyone for that matter, to court would be unwise at best. 12 Buying real estate in foreign controlled Thai company

Up to the 2006 land office guidelines issued jointly by the Ministry of Interior and the Land Department it was common practice for foreigners to form a Thai company for the purchase of land or condominium beyond the foreign ownership quota in Thailand. As long as the company had majority Thai shareholdings there were no restrictions when purchasing a property and the partly foreign owned company was treated like any other Thai company. Currently the government is restricting this illegal use of Thai companies and nominee shareholding structures by foreigners. Under new regulations for land offices and business registration departments the officials must now follow procedures when confronted with a Thai company with any foreign shareholders involved or a foreign director authorized to sign or co-sign on behalf of the companay. The procedures must prevent the illegal use of Thai nominee shareholders and front companies by foreigners.

The practice of holding companies for property purchases by foreigners is currently much less common. When a foreigner under the new land office procedures is advised to buy a property in Thailand on a Thai company name the foreigner will generally not appear on the company formation documents (Memorandum of Association/ shareholder list). Only after the property has been transferred to the 100% Thai company up to 49% of the (preference) shares will be transferred to the foreigner. Note that a Thai company formed merely as a front for foreign property ownership is illegal and leads to unlawful foreign ownership. A company that owns a real estate property must appear to be a normal active company running a business and file yearly balance sheets and correct accounting. It may not be a dormant property holding company.

[whatawonderfulday]

Our Juristic person will not sign any clearance letters concerning a Thai 49/51% company until it is proven to be legitimate, meaning the 51% Thai shares have to be paid for with Thai funds, that is to say he will not be party to a transaction where the Lawyer and staff are signing blank share certificates.

Erm, I think you should write;

"should not sign" or perhaps "I believe he would not sign".

[Rimmer]

Moved to the Real Estate Forum

[KittenKong]

Sorry guys I did say I would not make anymore comments, but felt I had to clarify this for the final time. Please see the cut and paste below extracted from www.samuiforesale a well respected Thai law company . My point here even from my first post was to say that anyone in our condo committee plus our J.P. will not be party to sanctioning a company that is (Quote) a front for foreign ownership. This is illegal ! To challenge this by taking our J.P, or anyone for that matter, to court would be unwise at best.

"Under new regulations for land offices and business registration departments the officials must now follow procedures when confronted with a Thai company with any foreign shareholders involved or a foreign director authorized to sign or co-sign on behalf of the companay."

As your quote from samuiforsale makes quite clear, it is the responsibility of the Land Office and Business Registration Departments to ensure that companies are correctly structured and that property purchases made by them are legal. It is not the business of the building JP or the committee to do this.

Of course the JP and the committee can choose to take a position on it, if they wish, but they may be leaving themselves open to legal proceedings if they discriminate as a result as they are not competent to verify the status of the company.

When one reads "this is my last comment" on an internet forum it often means that the person making the comment cant really back up what they have written, and knows it.

[ThaiBob]

Koh Samui, Phuket, are completely different situations where large foreign interests are gobbling up the most desirable properties. The situation in Pattaya is different and it's business as usual for the Thai-foreign company structure, if you can believe the published press reports anyway.

[Me Yank]

Sorry guys I did say I would not make anymore comments, but felt I had to clarify this for the final time. Please see the cut and paste below extracted from www.samuiforesale a well respected Thai law company . My point here even from my first post was to say that anyone in our condo committee plus our J.P. will not be party to sanctioning a company that is (Quote) a front for foreign ownership. This is illegal ! To challenge this by taking our J.P, or anyone for that matter, to court would be unwise at best.

"Under new regulations for land offices and business registration departments the officials must now follow procedures when confronted with a Thai company with any foreign shareholders involved or a foreign director authorized to sign or co-sign on behalf of the companay."

As your quote from samuiforsale makes quite clear, it is the responsibility of the Land Office and Business Registration Departments to ensure that companies are correctly structured and that property purchases made by them are legal. It is not the business of the building JP or the committee to do this.

Of course the JP and the committee can choose to take a position on it, if they wish, but they may be leaving themselves open to legal proceedings if they discriminate as a result as they are not competent to verify the status of the company.

When one reads "this is my last comment" on an internet forum it often means that the person making the comment cant really back up what they have written, and knows it.

If I correctly understand the replies, a thai condo owner can sell to a thai company and the Thai company replaces the Thai owner on the 51@.

[donx]

I thought that clearance letters from the JP are only required for sales to a foreigner. Since the Thai company isn't considered a foreigner and since the sale would not be part of the 49% foreign owned maximum can't the seller and buyer simply go to the land office without any clearance letters from the JP? Or am I wrong and every condo transaction regardless of whether the sellers and buyers are Thai or foreigners needs these clearance letters?

I never bought a condo so that is why I'm asking.

[KittenKong]

You need the debt-free letter regardless of who is buying/selling.

[donx]

You need the debt-free letter regardless of who is buying/selling.

Can't this debt-free letter be obtained without knowing anything about the buyer since I assume this only pertains to the seller being debt-free?

[KittenKong]

You need the debt-free letter regardless of who is buying/selling.

Can't this debt-free letter be obtained without knowing anything about the buyer since I assume this only pertains to the seller being debt-free?

Yes.

[Me Yank]

Moved to the Real Estate Forum The condo is in pattaya. That is the reason I put in pattaya forum.

[KittenKong]

Moved to the Real Estate Forum

The condo is in pattaya. That is the reason I put in pattaya forum.

But the question and answer apply to any Thai condo building, anywhere in Thailand, not just in Pattaya.

[huawei]

Thai company owned condo must be the worse scenario for purchasing a property out there !

[Me Yank]

Moved to the Real Estate Forum

The condo is in pattaya. That is the reason I put in pattaya forum.

But the question and answer apply to any Thai condo building, anywhere in Thailand, not just in Pattaya.

YES, but the land office is in Jomtien that would be in volved.

[donx]

Post #2 by KittenKong gives you the answer you need. And this will be the case no matter what land office in Thailand you need to deal with.

By the way, there isn't really a such thing as a farang Thai company. We understand that you mean a Thai company that has foreign directors, but in light of your question this is why the ownership will not be considered part of the 49% allowable foreign owned portion. The company is considered a Thai entity.

[Me Yank]

Post #2 by KittenKong gives you the answer you need. And this will be the case no matter what land office in Thailand you need to deal with.

By the way, there isn't really a such thing as a farang Thai company. We understand that you mean a Thai company that has foreign directors, but in light of your question this is why the ownership will not be considered part of the 49% allowable foreign owned portion. The company is considered a Thai entity. Thank you for the reply. Your reply is c lear.