NEW LEASE LAWS IN THAILAND:
Foreign businesses can feel
relaxed now as the Act Governing the Lease of Immovable Property for
Commercial & Industrial Purposes has increased from 30-50 years
& allowed lease rights to be mortgaged as security. For investors
this means: a longer lease can accommodate long term business planning
& the right to mortgage the lease as security in order to receive
finance. Financial institutions can benefit because they can take a
lease right as security.
Regulations: 50 yrs now.
Only applies to immovable property for commercial & industrial
reasons. Only the owner can lease it. Lease must be in writing &
registered.
The Government Gazette Aug
2000: says the business must have one of the following.
1/. Commercial business with
at least 20m baht in investment
2/. Industrial businesses
qualify for promotion under the Investment Promotion Act.
3/.Other commercial or
industrial businesses beneficial to the economy. property leased must be
located in industrial are as set out in the City Planning Act or the
Industrial Estate Authority of Thailand. Land Dept must approve leases
over 100 rai. Foreign leases must comply as well with the Foreign
Business Act. Leases can be renewed after 50 years for another 50 years.
If the lessee dies the inheritor can take over. The lessee can sub lease
or transfer lease rights, either wholly or in part, to a third party.
MORTGAGE
OF LEASE RIGHT:
Since a lease right can be
mortgaged, if the debtor defaults on payments the lease may be seized
& sold at a public auction. Mortgagee may claim: 1/. The debtor has
failed to pay interest for 5 years; 2/. Mortgagor hasn't satisfied the
court that the value of the property is greater than the amount due
& 3/. There's no other registered mortgages or preferential rights
on the same property.
TO LEASE A HOUSE &
TO LEASE LAND:
We firstly check the title Deed & check any liens on the said
property. Then we take the lease to the Amphur together with the nor sor sam or Kanut and
have it registered. It is then stamped & the land cannot then be
sold unless the lease is cancelled. A lease without doing this is useless. The first lease should be done properly by a reliable
lawyer. ( We charge 10,000 baht if straight forward and not no travel costs ). Most wives would agree to these procedures
by explaining to them that if they died, they
would not want their husbands thrown out! You can also
sell a lease.
DOING IT YOURSELF: You can
register a 30 years lease at the land department yourself and amend it
but most times you may be better to use a lawyer as the lease will be in
Thai. If you cannot speak or read Thai then you may not even know what
youre signing so play safe and use a lawyer for every contract for your
own good. Your name will appear in the title and no one can cancel your
lease.
LEASING
VIA A LOAN TO YOUR COMPANY:
This is an excellent way to
lease if you have a company. An owner takes a lease out on a particular
piece of land he wants to own with his own money? he loans his company
money to buy the land and the lease in effect is owned by the company
via the buyer. This then becomes an asset of the company and can be
depreciated from his or her share registration & paid back at the
buyer's pleasure.
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On March 3rd 2000 the Thai Foreign Business Act of 1999 took effect.
(FBA).
This replaced the old Act of 1972.
In a company you need 7 partners but you can according to the
investment control 100% via B.O.I. (Board of Investment). However a
normal 2m baht Thai Company foreigners can have 6 foreign shareholders & 1
Thai but the Thai holds 51% shares. We can however safeguard your interests but
always its best to have 2 or even 3 Thai owners. We can
help you form the company and take care of all steps for you plus search the
Title Deeds & any other request like making sure their is no lien on the
property.
THAIS MARRIED TO FOREIGNERS - the
answer to your land buying problems?
BOI allows foreign companies to own land, usually factories. Don't
forget the Treaty of Amity, which virtually gives Americans the right to
own 100% of a company doing business
in Thailand. The Japanese use nominees a lot. There are people that buy in
someone elses name and put a mortgage on the property for the purchase
price to protect their interest. There are also concurrent land leases
that can be set up, as there is no restriction on foreigners owning
buildings (40% of a condo complex) and lastly theres those who trust
their wife or friend & use their name. Laws are worthless without enforcement, & Thailand
practices "selective" enforcement. Foreigners can buy property
in Thailand & please use a lawyer as sometimes Title Deeds are
false, or the building you buy is not on the deed or the land has
encroached on other land.
Most farangs use their Thai wife and give property rights to them.
But if not married to a Thai lady then you can have a 30 year rental. Rental
total fee equals the purchasing price. The rental-contract is written in English and acknowledged by a
lawyer. This deal is a person-to-person basis. Problems may arise at
expiry date between heirs of both parties.
1/. Be careful. Check utilities as
sometimes theres no phone lines & never believe it until you have
written proof of phone lines are going in.
2/. Learn which areas flood and which don't. A developer will not tell you. Don’t listen to pub talk. Rent before
buying if you have time or ask the neighbours.
3/. A land lease NOT filed with the land department (and 1% fee paid) is
only valid for 3 years regardless of the term of the lease. All lease
for a period over 3 years MUST be registered at the Land Office and
written in Thai. You have also to pay fees calculated on the TOTAL
amount of rent agreed upon and for the full period (eg.: rent 1000 baht
x 12 months x 30years = 360.000 baht)
4/. Check out the history of the area and talk to the neighbours
where you want to buy.
5/. Ask the Land Dept if there are any proposed additional road works
or projects in this area in the distant future.
6/.If buying any house/ land check out the title or "chanote".
Never buy or pay a deposit down until you have a clear contract and
there is indeed a title. Again never listen to a sales rep in a moo baan
that the title is going thru or will be available after 3 months ---
chances are there will never be one. They just want the commission.
7/. Most deposits are non refundable.
8/. If obtaining a loan make sure you have before you place a deposit
or down payment.
9/. If you told that there is only one unit left in the Estate forget
buying.
Those who want to sign a lease-contract and don't want to register
it, should know that such a contract is automatically void at the death of
one of the signatory (this means that such a contract is NOT
transmissible without prior agreement of the other party.)
While a contract registered at the land office is transmissible &
if one signatory dies, & the contract is not cancelled, the heirs of the
estate have to respect it. This is Ok if the lease is transferable and
every time a transfer is made, the Land Office must be notified.
If no record of your lease with the developer, then any private
agreement between the 2 parties will not be legally binding. If the
developer wants to play you out, he can. The Land Office uses only one
language - Thai. Even your name in the contract has to be in Thai. The
"fee" is actually government tax & you pay the Land Office
equivalent to a little under 5% purchase price. A developer may want a
"deposit" equivalent to 1 year's maintenance fees. They say
you recover this amount from the person who buys the property from me.
But ask your Thai neighbours if they pay it as you will find they
don’t- its rubbish. Confusing-------- thats why you need our law
office.
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WHAT WE
ARRANGE:
Our company can setup
your company using our Thai lawyer or formulate leases, agreements etc that suit
your situation. If wanting to purchase or lease land do not sign any forms until
you talk to us, but please obtain a Title Deed and have it searched. We initiate
an investigation of your Title Deed for you and we give you a full Court/lien &
ownership report for your situation, in English.
. If you want a company or work
permit we give you a step by step English translation guide on all the steps we
take for you, ensuring full confidence in our services. There are no hidden
costs. Remember you do not need a work permit if you are not
going to work or are only coming to Thailand to retire in your house otherwise
you need a 2 million baht company min and must show the 2m baht. You can now
open a 1m baht company. Total costs for this is 35,000 baht
including VAT for a standard 2m baht company.
However you will need an "O" non immigrant visa or "B" non
immigrant visa if working in Thailand which you can obtain after your company is
formed. After one year in business we can then assist you to obtain a 1 year
visa in Thailand. For further information on Visas go to [ THAILAND
VISAS ]. Do not start a company if you cannot or do not think you will
make a profit after 3 years.
We arrange a 30 year
lease & assist with renewal and prenuptial agreements to cover you while you
are alive. This is sometimes preferable then buying a house and condo using a
company. Again we arrange with our Thai lawyer all the work for you.
US TODAY FOR DETAILS 
