NOT THE BEST OPTION FOR FOREIGNERS BUYING PROPERTY IN THAILAND AS AT 2017

STARTING A COMPANY TO HOLD YOUR HOUSE

You may be told by some that you can have a Thai Company to use as an umbrella to hold your property once pruchased. This is correct. However if you start a company you must conduct a business and the Labour office will inspect you. This means you must have 4 employees and they will be interviewed. Ths means some law companies have offered their staff to form your company when in fact all they are after is the cost of the company from you. YOU ARE TO BLAME not them if you find yourself in hot water so do not do this just to hold a house. ALL foreign owned companies are being investigated AND the law stating about having companies to use as an umbrella are now being investigated and rightfully so. These rules have always been in force--they are not new and we tell everyone do not listen to the first person you ask. In every western country a Company is also used with regards to supporting a business. In Thailand this is the same & Thais hold the majority shares and have a right to those shares when it comes to profit at the end of the year. 

Forming a Thai company

Some people will say this is the best idea for a foreigner to hold a house in ones name. However with a Thai company yes you can hold a property within the structure of the company. However be warned that if your books show nil profit after 3 years then you may be asked especially by immigration & the Commercial Reg via the tax dept why?? This may affect your visa and the status of your company after that period so be warned if you are told its easy to do. It is, however its also easy for the Commercial Registration Dept to fine you if you are not in profit mode or even take the property from you??? Wait and see.

Are normally 3% -5% but some charge 10%. Watch out also as some realties charge both the seller and the buyer & even hike the price up and have deals with the owners. We do not do this.

Why a Thai company

For Thai Companies who are already paid up and have a proper business the owners can have a property in their companies. If they sell then the property must be removed or sold with the Company. Some Law and Real Estate Companies and Developers will try to sell properties and allow you to leave in their companies. The downside of this is that some of these companies will extort yearly funds off the owner to the point where the owner will be left high and dry. OR when the owner wants to change the status of the property to somewhere else the holding Company will demand a payment of 100,000baht +. For those of you who go down this road just remember: every Real Estate Company wants a sale no matter what. if you do not have a good contract on the ins & outs of your property in such a company then do not do it.

There is a way around this but please write to us.

What if I use a Thai company

Have your lawyer not theres look at the contract and advise you! Remember you need to be able to get your property out when you want or change the status as well as not incurring unusual costs???? & also rmember a Company can be here today and gone tomorrow as well so alls these facts are worth considering. To change the land status a fee you may incur may be high but again ask your legal adviser.

Costs to use a Thai company

Well here again its up to the Law Office and if they are reputable the costs should vary from 10-20,000baht for contract without government fees. Remember Bangkok fees are dearer than Chiangmai fees but again be careful and check every detail with YOUR lawyer or ask us.

Costs to take property out of a Thai company

Well here again its up to the contract and also the land office transfer costs can be high?

Option for foreigner married to Thai

Yes OK to have in the spouses name but please have a lease on the property is case your spouse paases away before you. This will at least protect you as you may find the spouses brothers and sisters will want the house?? you paid for.

PAYMENT & REMITTING FUNDS TO THAILAND:

A deposit of 10- 30% is usually required to secure a property and total payments should be made within 30-60 days (see your lawyer first) but normally once the transfer has gone through. If signing a purchase agreement then up to 30% down & 70% following transfer. Normally the seller will pay the changeover tax which starts at 2.5%. However if the seller has owned the house longer than this [period it is discounted. Some Land Offices will charge up to 8% depending on the area and office. An agreement can be made between buyer and seller than each pay 50%. You can obtain longer periods but you will probably be required to pay a higher deposit. Deposits are normally non refundable, except by default of the vendor, so bear in mind that once the deposit is placed you are committed.

This situation also prevails for the vendor. He must refund your deposit and pay a penalty of an equal amount if he defaults on the contract. Deposit in escrow is still rare in Thailand, but it is becoming an increasingly recognized way of proceeding. It generally trades off greater security for the buyer's deposit versus a weakened claim for damages in the event of vendor default. 

Beyond the price, payment and closing schedules, it's important that a contract includes clauses to cover who will pay the legal fees, transfer fees and taxes (there is often a business tax and always an income tax assessment made at time of sale) as well as an understanding of the value at which the sale will be declared - this is typically (for tax reasons) at or close to the government minimum assessed value.

A foreigner buying a condo must transfer funds from a bank account out of Thailand in foreign currency and verify the  transfer on paper. The transfer of funds must be in the same name as the name that will appear on the final purchase contract ie. the buyer. Funds must be transferred into a Foreign Currency Account in Thailand opened in the Buyer's name. Use Bangkok Bank, Thai Farmers Bank and Siam Commercial Bank and make sure you tell them that the purpose of his or her opening a Foreign Currency Account is to purchase a condo in Thailand. This law is somewhat a catch 22 situation as the Foreign Banks usually will not write such a letter but don't worry. You can remit as much as you like to Thailand via your bank. Transfers out of this Foreign Currency Account in Thailand into a Thai Baht Account or some form of Thai Baht draft or check to the Seller must be made in amounts US$5000 or more in order to qualify for a "Tor Tor 3" Certificate issued by the Buyer's bank to verify that the originating funding came from outside Thailand in a currency other than Thai Baht. On the "Tor Tor 3" Certificate, it should state explicitly that the Thai Baht funds are used "to purchase a condominium" in Thailand. Taxes are payable by the buyer or seller of a condo in Thailand such as the Transfer Fee/Stamp Duty Tax of 0.5% usually payable by the seller upon the date of the actual sale or a Special Business Tax of 3.3% which is usually payable by the seller if the property has been owned for less than 5 years. By the way there is no limit on how much you can remit into a Thai account from overseas and no tax. Tax levied at 15% is on interest earnings only.

REMITTING FUNDS: If sending over funds to purchase a house you must tell the National Bank what you are using this money for with sums exceeding 2,000,000 baht quantities. If remitting funds from abroad to purchase property which is the law over sums of 2m baht It may save you  a headache when it comes to a divorce situation of whose funds were used to purchase the property. If you wish to know more than ask us.

MORTGAGES: CAN YOU BORROW MONEY

A foreigner cannot hold any mortgage in Thailand unless he/she has a company WITH FINANCIAL STATEMENTS so must be in business for one year minimum and have yearly audit and profit mode. Therefore a foreigner must use his wife to apply for the load in which case the house will be in her name. You can borrow around 60-80% from a Thai Bank depending on which one you use. There is a 1% service fee charge and interest is 4-7% depending on the bank & 1-12% for businesses but this rate does change. You must apply yourself. We cannot assist you with any mortgages so please ask your Bank. If you have a Thai wife then she can assist you.  It takes approx 1 month to be approved or longer.

Buildings apart from condominiums do not have any form of title document, but their sale or long lease can be registered at the Ampher (district) land office. Proof of ownership, must be established either from proof of construction or document showing previous sale-purchase (not to be confused with the House Registration document, which is only a register of the house's occupants). When buying a condo or property please remit through the National Bank and have record that you are using the money to purchase the property.

COMMISSIONS

Are normally 3% -5% but some charge 10%. Watch out also as some realties charge both the seller and the buyer & even hike the price up and have deals with the owners. We do not do this.

We highly recommend you obtain a Title search and House Inspection report before you purchase ANY property in Thailand. Cost 7000 baht Comprehensive Title search as well as House Inspection fee. 

WHY USE OUR SERVICES: 

	We work for you (Both Thai & foreign consultants )
	No hidden charges-everything is up front.
	Guaranteed conveyancy help &  Company, work permit & land  setup for foreigners
	Because you have the benefit of foreign help with our Thai lawyers and expat consultants
	Full house onsite appraisals. Cost is 3000 baht for a house under 2 years old & 5000 baht for older houses plus travel. This 5 page report with pics and recommendations is a must if you want to know what your house is really like..