Looking for help about property 'investment'

[Apothecary]

I was wondering if anyone could help confirm the following as I'm struggling to find clear information on the web:

- If a genuine legitimate company purchases a property in Thailand, does the Capitalisation of the company need to be equal or above the appraised price of the property?

- When signing at the Land Office for the purchase of a property, does a company director need to attend? Can this be done under power of attorney with a lawyer? Would the signed name in the transfer document and title deed be the (1) company itself or (2) the director (or person acting on behalf) of the company?

- At the point of sale does it need the same person to be present who signed in (1).

- If a company owns the property and a Director resides in the property, does that director need to pay rental income to the company? Is there any fixed amount for this?

- Is it easy to setup a 30 year lease from the company to the director? Is such a lease filed with a government office or is it only between the company and that director? If this is in place does the Director still need to pay rental income back to the company?

Thanks in advance for any help.

[trogers]

"genuine legitimate company"

Majority Thai-owned or otherwise?

[Apothecary]

"genuine legitimate company"

Majority Thai-owned or otherwise?

A legitimate company providing business services employing over 12 Thai staff for over 6 years. 51% Thai Shareholding.

Edited October 4, 2015 by Apothecary

[blackcab]

I will explain what the company I work for does. To avoid confusion, the company is 100% owned and directed by Thai people.

1. The capitalization of the company can be below the purchase price of the asset. At incorporation the company I work for was capitalized for 2 million baht. Shortly after incorporation the company purchased property with a declared value of about 40 million baht. The company supplied the land office with the minutes of a meeting where one of the company directors agreed to loan the purchase price to the company without interest.

2. A power of attorney can be used, however I would strongly advise against this course of action. I personally know someone who had 15 million baht stolen by their lawyer. The lawyer simply kept the money and didn't complete the transaction. The chanote will be in the name of the company.

3. If you are not using a power of attorney it depends on what your company documents say. The first page of the DBD registration will list the company directors and it will also state how many directors are required to bind the company to a contract. You need the appropriate number to attend - however the land office will more than likely not allow the director who made the loan to be party to the transfer at the land office if that is possible.

4. If the property is owned by the company and it is used as a director's residence there is no obligation to pay rent to the company - however there is an obligation to pay housing and land tax. The obligation exits whether the company receives any income from the property or not, and whether the company makes profit or not. This is because the tax law does not regard a company director living in a building owned by the company as owner occupied. You are required to declare yourself for this tax at the tax office. If you do not have a rental agreement the tax office will use its own judgement to assess the market rate for rent and tax you accordingly.

5. I can't answer your question about leases as I have no experience in this area - however I'm sure another member will be along shortly to help.

[MaeJoMTB]

it doesn't matter who sign, your farang signature has no value in Thailand.

Please don't judge others by your own low standards. You will invariably be wrong - as you have demonstrated in this case.

http://www.thaivisa.com/forum/topic/856992-defrauded-by-my-wife-and-criminals-in-thailand-bbc-special-report/

This thread has a fairly common theme for foreigner business that operate in Thailand.

But I'm sure your 'better standards' will make your experiences different.

[Apothecary]

http://www.thaivisa.com/forum/topic/856992-defrauded-by-my-wife-and-criminals-in-thailand-bbc-special-report/

This thread has a fairly common theme for foreigner business that operate in Thailand.

But I'm sure your 'better standards' will make your experiences different.

The whole point of looking for accurate advise is to avoid this kind of misfortune.

[blackcab]

it doesn't matter who sign, your farang signature has no value in Thailand.

Please don't judge others by your own low standards. You will invariably be wrong - as you have demonstrated in this case.

http://www.thaivisa.com/forum/topic/856992-defrauded-by-my-wife-and-criminals-in-thailand-bbc-special-report/

This thread has a fairly common theme for foreigner business that operate in Thailand.

But I'm sure your 'better standards' will make your experiences different.

We are talking about different things. I'm referring to myself as being able to sign business and banking documents. Where I work my signature authorising a transaction can cover a considerable sum of money.

You are referencing fraud, which could have happened if the victim was Thai or farang. Your example shows there is rampant bad practice and that everyone needs to be on their guard. What it doesn't do is demonstrate that a farang signature has no value in Thailand.

[NickJ]

The land offices are not all the same. I think I know what you are asking.....Some will accept a POA. The problem is that when a company that has been set up in order to buy land and then have a house built on it for a foreigner....The managing director, usualy a farang has to sign a paper as the MD.....thus , working without a work permit. So the paper is legaly worthless and tge company can have problems.......The way around this is to sign the paper while in another country and fed ex it in.....or have minutes of the companies meetings stating this.

[MaeJoMTB]

it doesn't matter who sign, your farang signature has no value in Thailand.

Please don't judge others by your own low standards. You will invariably be wrong - as you have demonstrated in this case.

http://www.thaivisa.com/forum/topic/856992-defrauded-by-my-wife-and-criminals-in-thailand-bbc-special-report/

This thread has a fairly common theme for foreigner business that operate in Thailand.

But I'm sure your 'better standards' will make your experiences different.

We are talking about different things. I'm referring to myself as being able to sign business and banking documents. Where I work my signature authorising a transaction can cover a considerable sum of money.

You are referencing fraud, which could have happened if the victim was Thai or farang. Your example shows there is rampant bad practice and that everyone needs to be on their guard. What it doesn't do is demonstrate that a farang signature has no value in Thailand.

What it shows is that a forged signature on a document to change company director can be used to remove/sell/steal all company assets without any recourse in law to recover them.

As far as I can see there is no way to protect yourself from this, except by having no assets in Thailand.

But you're right, the skin colour and racial background of the victim doesn't initially appear important.

But I really wonder if the courts would treat a Thai in the same way?

Anyway, do you really want to buy property for your company, when one simple fraudulent signature can lose it?

(remember the Thai lawyer who witnessed the signature is still in business, no come back on him)

Edited October 4, 2015 by MaeJoMTB

[Apothecary]

What it shows is that a forged signature on a document to change company director can be used to remove/sell/steal all company assets without any recourse in law to recover them.

As far as I can see there is no way to protect yourself from this, except by having no assets in Thailand.

But you're right, the skin colour and racial background of the victim doesn't initially appear important.

But I really wonder if the courts would treat a Thai in the same way?

Anyway, do you really want to buy property for your company, when one simple fraudulent signature can lose it?

(remember the Thai lawyer who witnessed the signature is still in business, no come back on him)

I am uncertain if it requires a copy of ID card / Passport to change the director of a company. Assuming a person could fake to be a director, would they then need to have the land title deed in their possesion? If it was so easy to conduct fraud would it not be happening all the time and not just to foreigners?

Based on MaeJoMTB's assumption condominiums might also be risky.

One other step to make it more secure may be to eastablish a 30 year lease from the company.

BlackCab.. I really wish to thank you for providing the seemingly only intelligent and downright helpful reply amongst all the responses. Thank you. If i could buy you a beer i would

Edited October 4, 2015 by Apothecary

[derator01]

A troll post has been removed from view, along with some appropriate replies.

[MockingJay]

Ask the lawyer!

[nsimmons]

Ask the lawyer!

Read this and RUN!!

http://www.thaivisa.com/forum/topic/804067-phuket-court-rules-secured-or-collective-leases-are-void/

[blackcab]

Ask the lawyer!

Read this and RUN!!

http://www.thaivisa.com/forum/topic/804067-phuket-court-rules-secured-or-collective-leases-are-void/

The OP asked about a 30 year lease. There are no problems at all with a single lease and no problems with a term of up to 30 years.

Your post references the 30+30+30 system, which is an entirely different thing.

[adamcoulson]

Try asking the land office, they are always very helpful……..

[trogers]

Ask the lawyer!

Read this and RUN!!

http://www.thaivisa.com/forum/topic/804067-phuket-court-rules-secured-or-collective-leases-are-void/

The OP asked about a 30 year lease. There are no problems at all with a single lease and no problems with a term of up to 30 years.

Your post references the 30+30+30 system, which is an entirely different thing.

What would happen should the lease outlast the company?

[Thunderbirds20]

Contact Frank Steiner on Facebook. He can answer all your questions! Tell him Allen sent you

[ozyjon]

Good luck.

[phil2407]

Thai lawyers - better you do yourself then if goes tits up - only your fault - they will suck all money off you and not give a """it

[nithisa78]

http://www.thaivisa.com/forum/topic/856992-defrauded-by-my-wife-and-criminals-in-thailand-bbc-special-report/

This thread has a fairly common theme for foreigner business that operate in Thailand.

But I'm sure your 'better standards' will make your experiences different.

The whole point of looking for accurate advise is to avoid this kind of misfortune.

Wouldn't this do better on, 'Ask the lawyer?'

[Chewbacka]

Thank you for the informative post Black Cab.

Wishing the OP best of luck. I would recommend that you consult with a few Thai lawyers and compare the feedback they give you. If you don't know any then a bit of asking around should enable you to get some contacts. If you are in Phuket and need some then PM me.

The OP has an established company so the capitalisation can be lower than the value of the property however for anyone else reading this looking to set up a company simply to hold property as an asset this might not be possible. The company I work for had a client who was advised that the capitalization of the company should be slightly more than the value of the property in order to avoid scrutiny. As we know the government is starting to look into "foreign companies" (defined as 49% non-Thai shareholding) that are set up to hold property assets and don't actually have any business transactions.

As a side note, anyone looking to own a property and set up in business here could look into taking over an existing company that holds the property they want to buy as an asset and then using that company structure to run their business. A company that has regular transactions and files the audits and tax returns avoids government scrutiny. Also buying a company that holds property as an asset means very low transfer fees (about 5,000 THB) as the transfer involves only changing the directorship of the company and a visit to the land office with associated taxes and fees is not necessary.

[KittenKong]

As a side note, anyone looking to own a property and set up in business here could look into taking over an existing company that holds the property they want to buy as an asset and then using that company structure to run their business. A company that has regular transactions and files the audits and tax returns avoids government scrutiny. Also buying a company that holds property as an asset means very low transfer fees (about 5,000 THB) as the transfer involves only changing the directorship of the company and a visit to the land office with associated taxes and fees is not necessary.

It also means that you take on any and all debts and liabilities that the company has, known or unknown.

That is one can of worms that I would never want to be part of.

[Apothecary]

Thank you for the informative post Black Cab.

Wishing the OP best of luck. I would recommend that you consult with a few Thai lawyers and compare the feedback they give you. If you don't know any then a bit of asking around should enable you to get some contacts. If you are in Phuket and need some then PM me.

The OP has an established company so the capitalisation can be lower than the value of the property however for anyone else reading this looking to set up a company simply to hold property as an asset this might not be possible. The company I work for had a client who was advised that the capitalization of the company should be slightly more than the value of the property in order to avoid scrutiny. As we know the government is starting to look into "foreign companies" (defined as 49% non-Thai shareholding) that are set up to hold property assets and don't actually have any business transactions.

As a side note, anyone looking to own a property and set up in business here could look into taking over an existing company that holds the property they want to buy as an asset and then using that company structure to run their business. A company that has regular transactions and files the audits and tax returns avoids government scrutiny. Also buying a company that holds property as an asset means very low transfer fees (about 5,000 THB) as the transfer involves only changing the directorship of the company and a visit to the land office with associated taxes and fees is not necessary.

Hi Chewbacka,

My accountant says that capitilsation doesn't need to be above the property value. If it is then there would be no need for a director's loan to the company as it *could* have enough money to buy it outright.

Taking over an existing company and changing it's trading nature may not be as easy as it sounds. The DBD document states the purpose and activities of the business. Work permits if applicable also state the role of the worker. It may be quite an effort to revise all this. Not saying it can't be done but it may be a pile of paperwork and/or legal fees.