Sale Of Single House From Foreign Held Company

[wood]

Hi, We are new to this forum and hope you all take it easy with what may be repeated and straight forward question,

Q. Due to current real estate uncertainties, my Thai wife, who incidentally has all her own money and rarely needs mine, is looking to buy a single property on less than 1 Rai. She has good business foresight and sees these as good times to buy, albeit with caution.

We have discovered through the company registrars that the Chanote title is held by a company which has only 2 non thai directors - yes true !

If she buys the property and at the same time the company is closed, will any liabilities carry over with the property and hence make it subject to any action where she may lose it.

Thanks for any help offered.

[Mobi]

I'm no expert but do have some experience in these matters.

I would think that if you suceeded in transferring the land into your wife's name, then you would have no liability or responsibility with regards to the comapny that previously owned the land.

However, I think you may well find that the company will not be able to transfer the land if it has foreign shareholders. In my case, I had to get rid of the foreign shareholding before the land could be transferred.

I assume you are not thinking of just buying the company - and if so my advice to you is don't.

I really recommend you get a good lawyer - it'll be worth it in the long run.

[wood]

I'm no expert but do have some experience in these matters.

I would think that if you suceeded in transferring the land into your wife's name, then you would have no liability or responsibility with regards to the comapny that previously owned the land.

However, I think you may well find that the company will not be able to transfer the land if it has foreign shareholders. In my case, I had to get rid of the foreign shareholding before the land could be transferred.

I assume you are not thinking of just buying the company - and if so my advice to you is don't.

I really recommend you get a good lawyer - it'll be worth it in the long run.

[wood]

I'm no expert but do have some experience in these matters.

I would think that if you suceeded in transferring the land into your wife's name, then you would have no liability or responsibility with regards to the comapny that previously owned the land.

However, I think you may well find that the company will not be able to transfer the land if it has foreign shareholders. In my case, I had to get rid of the foreign shareholding before the land could be transferred.

I assume you are not thinking of just buying the company - and if so my advice to you is don't.

I really recommend you get a good lawyer - it'll be worth it in the long run.

Ooops !!

Thanks for the reply, yes, this follows our line of thought and hope yours went relatively smoothly.

Absolutely will not go near the business.

Is it an expensive headache to do this type of purchase and how would this process work ?, i guess that from what you state, it is not possible for the house ( not the business ) to be sold as it is ?

Any legal opinions will be very much appreciated and may result in some work.

Thanks...

[Mobi]

If the land title deed (chanod) is registered in the name of a company, then it is the company that must sell and transfer the land to the buyer - no different to selling any other asset owned by a company. However, due to the restrictions of foreigners owning land and the recent crackdown, the land offices are unlikely to accept the transfer if the company has foreign shareholders.

In my case, I got there in the end, but it was a bit of a headache, and I needed good legal assistance.

All this is the company's problem - not you'rs. The seller has to sort out their company shareholding if they wish to sell their land, and it should all be for their expense.

Don't forget that tax is payable on the transfer of land.

[Chang_paarp]

There is a problem for the sale if the land is sold to one of the directors or their immediate family. smon43(?) asked a similar question recently.

The long and the short of the transaction is that the sale needs to be well documented. An independent (non family) director needs to be appointed to the company if there is not one there currently. A motion of the directors to sell the land, and a realistic price paid. Then all the taxes paid.

Check with the legal folk to be sure.

[eljeque]

I did this for a friend yesterday. Our contract was to sell the shares of the company to her. She was then going to take the property out of the company. The day we were arranging to go to the land office, she decided that she did not want the company and instead wanted only the property out of the company.

The lawyer working for the agent originally wrote the contract for her to buy only the shares, and then he was gonig to hel her get the property into ehr name and out of the company, whch she would then be the share holder. On the day we were to do this, the lawyer told us that she could not sell the property out of the company and to herelf.

So, my account was busy selling the shares from my friend's name to the buyers while the agent was at the office transferring the house from the company into her name.

72 talangwah x 20,000 / tw x nearly 7% = 95,000 baht in taxes that she paid for the company as she was the one who wanted to take the proerty out of the company. Then, there were an additional 30K+ of other fees for her. She paid 130,000 at the land office. She looked at the agent and asked if I was going to pay a share. I toldhe agent that she very well knew we were selling only the shares of the company and that all of this falls on her, so it was off to the bank she went.

Next, she will have to close the company and pay company taxes. The agent is to charge her another 35,000 for this. I think thatis a little over the top, and beliee that about 20,000 would be a little more fair.

It cost my friend--I was a director as well, nothing at all, other than a 3,000 to the agent, and it cost her 165,000 all because she wanted to take the property out of the company.

The land office never asked about us (foreigners) selling the land from a company.

This was at the Pattaya Land Office in Suksabai Villa.

My suggestion to you is that you make sure that the sellers are selling the property, and then they are responsible for all of the companies fees. Now, it is not uncommon for the buyer and seller to share some fees, but that does not include the company fees or the nearly 7% (This is on a house that has been owned a short period of time.) The shared fees are on some of the other transaction costs.

[wood]

Thanks for your response eljeque, do you work in the legal profession ??

I am just a little concerned from reading this topic that no " qualified" legal members have commented, this question must be on the lips of all non thai land/property owners most of whom would have taken legal advice to buy.

It does not fill the market with much confidence.

[Dragonman]

Thanks for your response eljeque, do you work in the legal profession ??

I am just a little concerned from reading this topic that no " qualified" legal members have commented, this question must be on the lips of all non thai land/property owners most of whom would have taken legal advice to buy.

It does not fill the market with much confidence.

I have not replied previously as Mobi had pretty well said it all. It really may be a problem for the sellers not your wife. If they have nothing to hide go along to the Land Office with them and see for yourself the problems they may have. Depends on each individual Land Office.

[dsfbrit]

72 talangwah x 20,000 / tw x nearly 7% = 95,000 baht in taxes that she paid for the company as she was the one who wanted to take the proerty out of the company. Then, there were an additional 30K+ of other fees for her. She paid 130,000 at the land office. She looked at the agent and asked if I was going to pay a share. I toldhe agent that she very well knew we were selling only the shares of the company and that all of this falls on her, so it was off to the bank she went.

Could you please explain the calculation. I am considering removing land from the company to my Thai wife and doing the lease/usufruct thing.

I have 300 TW outside Pattaya bought at 5000/TW so that comes out at at 300TW x 5 x 7 % = 105,000 baht???

I have made the calculation twice and keep hoping I made a mistake!! When we put it 'into' the company I paid just around 50,000 baht. I guess the rate has changed has it in the last 2.5 years?

[wood]

Thanks for your response eljeque, do you work in the legal profession ??

I am just a little concerned from reading this topic that no " qualified" legal members have commented, this question must be on the lips of all non thai land/property owners most of whom would have taken legal advice to buy.

It does not fill the market with much confidence.

I have not replied previously as Mobi had pretty well said it all. It really may be a problem for the sellers not your wife. If they have nothing to hide go along to the Land Office with them and see for yourself the problems they may have. Depends on each individual Land Office.

Thanks,

a good suggestion, the visit to the land office is now arranged, i will keep you posted on this.

Two further related questions, could anyone advise what is a "reasonable" cost per month for a detached property management fee in Hua Hin and Samui

Is it normal, when you purchase ( as a thai ) outright the land to build a house and it is within a "complex", for you to have to take the "management fee" ?

Thanks again..