Property Holding Company: annual costs.

[Bulldozer Dawn]

I am not interested in the discussion surrounding whether or not it is legal to hold a property in a company.

 

What I am interested in is the cost of the annual outgoings to keep the company compliant.  Audit, taxes etc.

 

I can buy a bare block in a good location for 750K and can build a house on it for 750K. 

 

I should be able to flip it on to a foreigner given the good location.

 

Doing so would be much easier if held in a company.

 

But I am interested in the annual costs of maintaining a the company, as it is a low value project and perhaps those costs, if too high, make it not financially viable to do so.

 

Anyone that is currently holding a house or other property in a company, what are your annual outgoings to keep it compliant?

[Langsuan Man]

I pay my lawyer 15,000 THB per year to file the required annual report.  Of the amount some is for the taxes, filings, and his fee.  Have never needed or cared about the breakdown, only that this is a pretty standard amount

 

During the year if I need my company "updated" it costs 1,000 THB.  Updating is rare and so far the only time I needed to do it was for the provincal water service  ( required so that they can charge you the commercial water rate versus the residence rate).  

 

Updating is probably required if you were selling the company but I have no direct knowledge of that 

[Bulldozer Dawn]

Thanks for your input LM.

 

Anyone else have experience holding a house with a company.

[THAIJAMES]

Depends on which area of Thailand.  In Chiang Mai 8000 to have an accountant file tax return certified by and auditor.  200 baht to get an updated company registration if you do it yourself at the Business Department.

[JohnC]

In Pattaya the average annual audit fee is 9000 baht plus 3000 baht tax , to sell the company you just need to change Company Director, fee is 10000 baht normally split 50/50 with the purchaser. 

[ST11]

Could anyone recommend me a lawyer in Phuket? My lawyer billed me B30,000 per year, I'm new in Phuket and looks like he found sully farang

[ExpatOilWorker]

3 minutes ago, ST11 said:

Could anyone recommend me a lawyer in Phuket? My lawyer billed me B30,000 per year, I'm new in Phuket and looks like he found sully farang

 

These guys seem to know a few lawyers in Phuket: http://www.bbc.com/news/magazine-34346620

 

[Bulldozer Dawn]

Thanks guys for your input so far.  

 

Ok so far we have a figure of between 8-9K for the audited returns and 3K for the tax.

 

1.  Who did you use for the 3 required directors?

2. Do you require one or two directors signatures on documents?  If only one, how do you protect yourself from a rogue director?

3. Did the lawyer/account attend the property settlement/transfer on your behalf?

[Gulfsailor]

When making this assessment you need to consider a future buyer may not want to take over the shares of your company, but may prefer to just own it in a private name (Thai) or set up own company or add it to an existing company. In all those instances your company will sell the property and you will need to liquidate and close the company thereafter. Closing a company will set you back 20,000 to 30,000. But the main cost will be the corporate income tax you then have to pay over the profit you intend to make on the property. During company ownership you annually depreciate the value, so you don't pay taxes, but when it comes to selling, you will be hit with a profit in the books of selling price minus book value. This tax is 15% (20% if profits exceed 3m THB).

 

[Bulldozer Dawn]

13 hours ago, Gulfsailor said:

When making this assessment you need to consider a future buyer may not want to take over the shares of your company, but may prefer to just own it in a private name (Thai) or set up own company or add it to an existing company. In all those instances your company will sell the property and you will need to liquidate and close the company thereafter. Closing a company will set you back 20,000 to 30,000. But the main cost will be the corporate income tax you then have to pay over the profit you intend to make on the property. During company ownership you annually depreciate the value, so you don't pay taxes, but when it comes to selling, you will be hit with a profit in the books of selling price minus book value. This tax is 15% (20% if profits exceed 3m THB).

 

Thanks very much for your information.

[topt]

18 hours ago, JohnC said:

In Pattaya the average annual audit fee is 9000 baht plus 3000 baht tax , to sell the company you just need to change Company Director, fee is 10000 baht normally split 50/50 with the purchaser. 

Is there a "standard" cost or a ball park figure for setting up the company in the first instance?

[KhunBENQ]

Two vulgar posts removed.

 

Please use appropriate language to comment on such services/lawyers.

[Bulldozer Dawn]

2 hours ago, topt said:

Is there a "standard" cost or a ball park figure for setting up the company in the first instance?

 

I just got a quote from a local accountant.  20K to set up and 25k ongoing each year.  Sounds expensive based on what others have posted here.

[topt]

2 hours ago, Bulldozer Dawn said:

 

I just got a quote from a local accountant.  20K to set up and 25k ongoing each year.  Sounds expensive based on what others have posted here.

Yes but those kind of figures are more like what I was expecting to read..............?

[Swiss1960]

Thanks guys for your input so far.  
 
Ok so far we have a figure of between 8-9K for the audited returns and 3K for the tax.
 
1.  Who did you use for the 3 required directors?
2. Do you require one or two directors signatures on documents?  If only one, how do you protect yourself from a rogue director?
3. Did the lawyer/account attend the property settlement/transfer on your behalf?

I pay 13k per year.

You need only 1 director (normally yourself), but can add more when needed, i.e. your wife. You can be director even if you are NOT majority shareholder.

Main protection is that YOU keep hold of the company stamp so nobody can create legal documents on behalf of the company AND you keep hold of chanote, blue book etc etc of your property.

Sent from my HTC 10 using Thaivisa Connect mobile app

[khunPer]

On 2/23/2017 at 6:22 PM, Bulldozer Dawn said:

Thanks guys for your input so far.  

 

Ok so far we have a figure of between 8-9K for the audited returns and 3K for the tax.

 

1.  Who did you use for the 3 required directors?

2. Do you require one or two directors signatures on documents?  If only one, how do you protect yourself from a rogue director?

3. Did the lawyer/account attend the property settlement/transfer on your behalf?

1) To my knowledge you only need one director, but you need minimum 3 shareholders (some years back you needed minimum 7 shareholders).

2) The board can decide what each director can sign for, i.e. some transactions needs to be signed by 2 directors, fx. land transfer or mortgage, and some directors can sign alone for everything but fx. land transfer or mortgage. (My comment: The directors in the co. ltd. I'm shareholder in, has different proxy powers; be careful who can sign alone for all, as they may be able to sign another bord-member (director), fx. you, out of the company-board.)

3) No, but it's probably up to an agreement between you and your lawyer.

 

The web-site "Samui for Sale" supply a lot of the information and questions you asks concerning forming a company and buying land. Here's a link to the page about forming a company, shareholders, proof of funds, and directors (minimum 1), etc.:

"Thai private limited company formation", from the menu you can navigate to the other pages...

[THAIJAMES]

For additional protection, you the director with signature authority can request at the business development department that no change in ownership or structure can be done with a power of attorney and that you must be personally present for any change in company structure or ownership.