Buying a house

[SingaporeSteve]

To answer your original question, I'd suggest looking at making your children directors of the company that you set up to own the land and house as well as yourself. That way, they can sign for the company including the eventual sale and transfer of any assets.

 

Also, increasingly, at least in Chonburi, companies are being required to declare a rent income and pay taxes on that income even if its you living in the property - the days of non trading property owning companies are behind us - therefore assume that your annual tax bill will go up from the estimates you have seen.

 

The question of Thai nominee's is easily handled and any competent lawyer can describe it better than me, but it involves a scenario where you lend them the money for their capital registration (at least on paper) and documents are signed to that effect. This apparently means they are no longer nominees in Thai law - probably not the best way of describing it which is why you really should get some good advice from a decent law firm.

 

Furthermore, on the eventual sale, the company would be required to pay taxes based on any profit achieved in exactly the same way that a traditional company would do - only exemption here would be if the eventual buyer bought the company outright that owns the land and house as against just the assetts.

Cheers

[Guest]

>>>Sorry fly, but the big multi-national corporations down to the farang small villa, condo, home or business owner use the above methods of purchase and have done so for many years quite successfully and without the slightest hickup - <<<

 

 

 

well, and lots of people have been scammed out of their savings by less than clean lawyers and land developers. and it's not just foreigners, but thais as well.

purchasing real estate is even under the best circumstances more than hazardous here in thailand even for locals, so, yeah, there are lots of potential hick ups.

[Guest]

About the idea of issuing preference (non-voting) shares to the thai shareholders, the 51% thai ownership requirement must not allow for this otherwise why go thru the trouble of issuing share transfer contracts

I know preference share structures are permitted. The preference shares do have voting rights (they are not non-voting), but those rights are reduced.

 

Remember the economic basis of preference shares. They are paid before common stock, but, in return, they have reduced rights to profits. Just like a loan is paid before stock, and has no claim on profits.

 

To the comment below yours, about a Judge looking through the transaction. Correct me if I am mistaken, but that is a common law concept. This is a civil law jursidiction, and there is no concept of trust or equity here. I think the issue is one of establishing that the shareholder is real, meaning that he or she paid for their shares. Hence the need to keep the share capital law.

 

As to powers of attorney, I know they are revocable, even if they say they are not. I know this from experience at our bank when we had to very quickly cancel an irrevocable power of attorney granted to an employee who was abusing it - 'nuff said about that.

 

If we established anything here, it is that there are alot of different ideas out there about how to do this and risks with doing it. Hence, my original post on the subject.

[Guest]

OK, this makes sense, at least it is internally consistent. Although I am not sure I would loan money to the designee shareholders (I saw a letter recently from one of our outside lawyers where he carefully used that term). I think it would be best if the Thai who held most of the preference shares invested his "own" money (not alot if the company is thinly capitalized) or at least there wasn't evidence that it was his own money.

[eee]

Hey there Gadfly. As a banker do you believe that the economy of Thailand will crash in the near future as people on the board suggest. A dumb question huh? How stable is thailands economy? I might hold off on the purchase of a condo. thanx...eee

[Guest]

This is the best info page i have found so far:-http://www.pattayaelegantproperties.com/propertylaws.html

Thank you to everyone who has posted advice,i listen and respect all of it.

I am suprised with all the members of this board, it apears no one owns a house,or if they do it must be in a Thai persons name.

I plan on asking all the ex pats in the local golf society for advice on a good lawyer,i shall then go see at least two lawyers and get legal advice,its certainly a minefield.

I return in three weeks to Los,so i will post anything that i find out.

I just want to say,that having bought a condo,its far easier,and if your not bothered what you own,,,,BUY A CONDO!!!!!!!!

Many people have advised renting,i shall easily get back what i paid for my condo,so all its cost me is the interest that i would have earned if i had invested the money in a bank.

I do think long term,buying is best,providing you shop around,i spent a long time looking,eventually i bought my condo from a bank,they often have some real bargains.

[gummigut]

This is from memory.

 

From 99 to 2002 roughly 3,200 new condo units came to the market. Last year 5,200 condo units hit the market. This year is supposed to be something like the same. Up to and including last year, good developments were 100% or close to 100% sold before completion.

 

This year it's now down to 40%. Dramatic drop. This is why you see a lot of development companies in the paper saying now is the right time to buy. They are also offering things like 250,000 flat screen TV's and nice surround sound stereo systems if you buy the high end condos now. High end condo units sales are lagging and not looking to get better next year as eevn more supply hits the market. Unfortunately there is not enough concentration in the mid-market I believe. The mid market though I think is the most dangerous as those developments probably don't have good management companies (general statement) so due diligence has to be done in this segment.

 

Now, I can't find jack on secondary market sales (I've been looking, but not hard yet. In the next week, I'm going to be doing some in-depth analysis on the condo market).

 

While I think the Thai economy is going to slow down, many folks who are building the premium condos (those we'd like to acquire) are rich. Thais are very inelastic with downward price pressure (they'd rather sit on an underperforming asset, then sell it at a discount and use the money to do something more productive).

 

If you have the time, the best thing to do is to research the market and see what's available and coming online. Use something like Harrison (real estate company who is marketing some nice condos) to show you what's out there. Then bide your time and see if any banks are liquidating after you get a feel for the market. Then, even if the economy goes to the shits, you should still do okay.

 

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[JJsushi]

Why in the world would an individual want to own property in a country that has a convoluted property ownership system for foreigners is beyond me. Unless I wanted to start a family in Thailand I would rent a home and call it a day. That way if my fortunes or Thailands changes in a negative way I can simply walk away.

[gummigut]

Convoluted for everything but Condos. But yes it's a risk.

 

It's something to do though if you make Thailand home for a significant part of the year. It also gets money out of the US but that's another topic.

 

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[SingaporeSteve]

Gadfly1 said:

OK, this makes sense, at least it is internally consistent. Although I am not sure I would loan money to the designee shareholders (I saw a letter recently from one of our outside lawyers where he carefully used that term). I think it would be best if the Thai who held most of the preference shares invested his "own" money (not alot if the company is thinly capitalized) or at least there wasn't evidence that it was his own money.

 

Not sure I follow your meaning here. The reason you have them sign a document saying you lent them the money is so that they get around the question of nominees. Therefore they have no claim on the shares unless by some wierd practice they repay the loan to you, which is unlikey to ever happen and for that they own 10% or so of a company where they have no signing rights and have already signed a resignation form revoking their shareholding. Key here is not to use anyone close to you e.g girlfriend as the true nominees are just paid a fee to use their name and they forget about it. Girlfriends/wifes etc can turn nasty but the average clerk working in a lawyers office is not going to rock the boat, particularly as they are guilty in law if they actually state that they were a nominee.

 

Cheers