Yeah it went all funny, my connection says 'very good' though!?!?
Re: companies, we were told you can't, unless the new boss was setting himself up for a nice little earner. Hope that's the case.
SJ
Lease agreements
lease agreements
There is no difference between a trading company and a company formed to hold a property title. All companies must show a profit or they are automatically closed. When you pay your accountant each year for your accountants that should include an element of taxation. Any company with a farangh holding a work permit must now show an annual turnover of a minimum of 2 million baht and therefore must register for vat. Note this only seems to apply to companies with a farangh holding a work permit, I guess as a Thai national does not need a work permit they also do not have to pay vat and maybe income tax, well Thaksin seemed to think so. A lease I believe is the sensible option, it is what the Thai government are content with, make sure to include all the correct clauses and you should be as safe as ‘Houses?’ What is regularly overlooked with company setups is the majority shareholders, they must be able to prove that they had enough funds to cover the value of their share of the initial capitalisation, ie; a company formed to buy a 10 million baht house with one million shares each issued at 10 baht, if a shareholder holds say 1000 shares they must prove that they have 10,000 baht of liquid funds at the time of the capitalisation & they must prove where the funds came from, no loans from a farangh for the day. This can be checked retrospectively. Finally voting rights are now determined by the number of shareholders, there are no funny non voting rights or clauses allowed whereby they take away a shareholder voting rights, so think about it! 51/49? Where could the guy who bought his house through a company with 49% of the shares be sitting at any time in the future after an emergency general meeting has been called compared to the one who has a lease with guaranteed renewal rights? You did not know the meeting was being held, OH! Maybe that is because your address is here but you were in blighty! They only gave you 24 hrs notice and you were away, convenient that. The 51% of shareholders rights voted against you! And you were in attendance, your 49% counted for nothing, OH! except of course you are entitled to 49% of the proceeds from the house you thought you owned but has just been sold to a Thai by vote for 10% of its true value. Let’s hope that not to many Thais understand this, or at least not to many Thai ladies eh!
Re: lease agreements
Most people pay tax by the farang renting the house back off the company.clive wrote:All companies must show a profit or they are automatically closed. When you pay your accountant each year for your accountants that should include an element of taxation. Any company with a farangh holding a work permit must now show an annual turnover of a minimum of 2 million baht and therefore must register for vat. Note this only seems to apply to companies with a farangh holding a work permit
A company only has to have 2M Baht registered capital if the farang wants to get a WP and is not maried to a Thai. If married to a Thai its 1M Baht.
This is nothing to do with turnover, VAT etc.
I don't believe the law has changed to this? Do you have a source reference please.Finally voting rights are now determined by the number of shareholders, there are no funny non voting rights or clauses allowed whereby they take away a shareholder voting rights
SJ
Guys
Do you really think this official is going to refuse to transfer land into company setups that are legitimate and by doing so upset dozens of very rich powerful thais who are selling to foreigners ? Think about it .
"I,m sorry Khun rich powerful person but I make up my own rules and do not follow our countries laws .I understand it will lose you 300m baht worth of sales this year but i,ve made up my mind and am sticking to it
"
How long do you think it will be before someone has a word in his shell like ?
With regard to companies with nominees who do not have the funds .This is illegal but who commits the crime ? The lawyer who knowingly set up a company structure that broke his own laws ? The developer who sold land to a company that was not legit ? The shareholders that lied on paper saying they had the funds ? or the shareholder living in their lovely home in paradise who did everything correctly and can prove they have sufficient funds to own their percentage ? How could they possibly know that the other shareholders were providing false testimonies and documentation ? Even thinking about dealing with it would give any officials such a headache that they would simply tell you all to sort it out yourselves and provide proof that you had done it so they could stamp the paperwork and go back to eating and sleeping .
All this can be avoided by having a legit set of shareholders or a legit lease of course .
Crazy 88
Do you really think this official is going to refuse to transfer land into company setups that are legitimate and by doing so upset dozens of very rich powerful thais who are selling to foreigners ? Think about it .
"I,m sorry Khun rich powerful person but I make up my own rules and do not follow our countries laws .I understand it will lose you 300m baht worth of sales this year but i,ve made up my mind and am sticking to it
"How long do you think it will be before someone has a word in his shell like ?
With regard to companies with nominees who do not have the funds .This is illegal but who commits the crime ? The lawyer who knowingly set up a company structure that broke his own laws ? The developer who sold land to a company that was not legit ? The shareholders that lied on paper saying they had the funds ? or the shareholder living in their lovely home in paradise who did everything correctly and can prove they have sufficient funds to own their percentage ? How could they possibly know that the other shareholders were providing false testimonies and documentation ? Even thinking about dealing with it would give any officials such a headache that they would simply tell you all to sort it out yourselves and provide proof that you had done it so they could stamp the paperwork and go back to eating and sleeping .
All this can be avoided by having a legit set of shareholders or a legit lease of course .
Crazy 88
I can only tell you what I know to be the case. If anybody wants prove positive check with a lawyer the same as I do. The people who run around Hua Hin telling you that they have just had a problem with this and that property deal here are the ones who accept doing things in an out of the ordinary and incorrect way & they are nearly always Farangh! The vast majority of rich Thai families here actually try to abide by the rules, they are the ones that you do not hear about. They act in a proper & decent manner and only "assist" the sytem to get it moving when it comes to a stop. The majority of them do not pay Thai officials to circumvent the rules, but purely to speed the thing up and if you think theses people are worried about losing the occasional miniscule land sale to a farangh you are wrong. Most of the land sales in this country are now between Thai families selling huge plots for big money who then develop the land and sell the homes mostly to Thai purchasers, in fact most of the ones I know are not really interested in selling land to farangh, land sales to farangh are usually completed by so called agents, Thai or farangh who do not own the land and are desperate for the commison, once again as I have said before what plonker buys a house or land of someone he has just met in a bar! All of the winging I hear about breaking the rules with land and property deals come from the farangh, if they are to stupid to check things out that is their problem. You are in a foreign country with different values and rules. You will also find that most of the complaints are from Hua Hin, there is also a problem in Pattaya but not to the same extent as here and the problem is much less in Phuket. There are less agents in Phuket and most of the agents follow the rules and advise their clients to do the same. You will also find that most developers in Phuket do not deal with the so called bar agents, preferring to deal with the professional agents instead. If any agents here are reading this please take note! When you sell someone a property who was brought in by a tuk tuk driver you have no recourse to anyone else when the customer/developer relationship breaks down, but of course that never happens here does it.
Good post Clive
I buy or lease only where there is a thoroughly checked clear and debt free land title .It is so easy to check or have someone independent check for you.I occasionally break my rule and buy land with loans against it but as in all cases I buy in cash at the land office once the deed is in my hand,in the right name .I do not mind a good faith deposit to secure for a few days if required .Most importantly on house and land packages involving staged payments USE A LAWYER ,do the job right ,then sit in YOUR swimming pool and crack open a cold one .
Crazy 88
I buy or lease only where there is a thoroughly checked clear and debt free land title .It is so easy to check or have someone independent check for you.I occasionally break my rule and buy land with loans against it but as in all cases I buy in cash at the land office once the deed is in my hand,in the right name .I do not mind a good faith deposit to secure for a few days if required .Most importantly on house and land packages involving staged payments USE A LAWYER ,do the job right ,then sit in YOUR swimming pool and crack open a cold one .
Crazy 88
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KelpieKiss
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Arcadian, you've not mentioned this but are you selling property in the UK to buy a house in Thailand? If your aim is to leave the property to your children you should be very careful with a Thai lease. In my opinion, you'd be much better of renting out your property in the UK and using the money to rent out a nice place in Thailand. Then you can leave your UK house to your kids with no hassle. If you're not selling up in the UK then never mind.Arcadian wrote:SJ, I am having an inheritance clause which will eventually leave the property to our children, perhaps I should add that we are an English couple, so there will be no complications pertaining to Thai claimants. Is there anything else I should consider putting in the agreement?
Just remember that no matter what goes in the lease, your kids could have a very hard time trying to claim ownership and then sell a house that is on a lease. Remember it has to be written in Thai too.
Could you please use paragraphs, makes it much easier to read.clive wrote:I can only tell you what I know to be the case. If anybody wants prove positive check with a lawyer the same as I do. The people who run around Hua Hin telling you that they have just had a problem with this and that property deal here are the ones who accept doing things in an out of the ordinary and incorrect way & they are nearly always Farangh! The vast majority of rich Thai families here actually try to abide by the rules, they are the ones that you do not hear about. They act in a proper & decent manner and only "assist" the sytem to get it moving when it comes to a stop. The majority of them do not pay Thai officials to circumvent the rules, but purely to speed the thing up and if you think theses people are worried about losing the occasional miniscule land sale to a farangh you are wrong. Most of the land sales in this country are now between Thai families selling huge plots for big money who then develop the land and sell the homes mostly to Thai purchasers, in fact most of the ones I know are not really interested in selling land to farangh, land sales to farangh are usually completed by so called agents, Thai or farangh who do not own the land and are desperate for the commison, once again as I have said before what plonker buys a house or land of someone he has just met in a bar! All of the winging I hear about breaking the rules with land and property deals come from the farangh, if they are to stupid to check things out that is their problem. You are in a foreign country with different values and rules. You will also find that most of the complaints are from Hua Hin, there is also a problem in Pattaya but not to the same extent as here and the problem is much less in Phuket. There are less agents in Phuket and most of the agents follow the rules and advise their clients to do the same. You will also find that most developers in Phuket do not deal with the so called bar agents, preferring to deal with the professional agents instead. If any agents here are reading this please take note! When you sell someone a property who was brought in by a tuk tuk driver you have no recourse to anyone else when the customer/developer relationship breaks down, but of course that never happens here does it.
Personally I'd not use the Compnay route, but, just to make things clearer. Even if a Thai Nominee owns 51%, you can establish teh Articles of Association so that any decission requires 75% of shareholders approval to make any decission. You cannot outvote them ,but they cannot outvote you.
Semper in excretia sumus solim profundum variat
Say you have a 1M Baht registered Limited Company.
To register land it needs to be a Thai company and not a foreign one, criteria for this is Thais need to hold 50%+1 share, to simplify its done as 51%.
The set up would be 10,000 shares @ 100 Baht each, Thai shareholders have 5,100 shares, foriegner has 4,900.
There's two catagories of shares 'ordinary' and 'preferred' (preferred have limited voting rights, dividend entitlement, and asset entitlement etc).
Company set up gives foreigner 'ordinary' shares which have voting rights of 1 vote per share, therefore 4,900 votes.
Thais have 'preferred' shares which under Thai law require a number of shares to obtain 1 vote. Company set up states that 10 shares = 1 vote, Thais have 5,100 share but only 510 votes.
Foreigner has control of the company.
SJ
To register land it needs to be a Thai company and not a foreign one, criteria for this is Thais need to hold 50%+1 share, to simplify its done as 51%.
The set up would be 10,000 shares @ 100 Baht each, Thai shareholders have 5,100 shares, foriegner has 4,900.
There's two catagories of shares 'ordinary' and 'preferred' (preferred have limited voting rights, dividend entitlement, and asset entitlement etc).
Company set up gives foreigner 'ordinary' shares which have voting rights of 1 vote per share, therefore 4,900 votes.
Thais have 'preferred' shares which under Thai law require a number of shares to obtain 1 vote. Company set up states that 10 shares = 1 vote, Thais have 5,100 share but only 510 votes.
Foreigner has control of the company.
SJ
according to my lawyer... annual Housing Tax in Thailand shall be levied against the house owner by the Hua Hin Municipality Office ("MO") , at the rate of 12.5% of the total actual rent income or rentable income per year (evaluated and assessed by the MO) whichever is higher.magnum wrote:Could someone advise on how much annual property tax is on leased property and where do I pay.
And this is perfectly legal also.Super Joe wrote:Say you have a 1M Baht registered Limited Company.
To register land it needs to be a Thai company and not a foreign one, criteria for this is Thais need to hold 50%+1 share, to simplify its done as 51%.
The set up would be 10,000 shares @ 100 Baht each, Thai shareholders have 5,100 shares, foriegner has 4,900.
There's two catagories of shares 'ordinary' and 'preferred' (preferred have limited voting rights, dividend entitlement, and asset entitlement etc).
Company set up gives foreigner 'ordinary' shares which have voting rights of 1 vote per share, therefore 4,900 votes.
Thais have 'preferred' shares which under Thai law require a number of shares to obtain 1 vote. Company set up states that 10 shares = 1 vote, Thais have 5,100 share but only 510 votes.
Foreigner has control of the company.
SJ
Two share classes are common all over the world.
It has been recommended elsewhere though that the falang limit his ownership to 39% as it attracts less attention. The key is in the Articles of Association which permit the real owner to control decisions.