Foreign, Thai, company ownership..means?

[geezer2005]

When looking at condos for sale, they state they are either Foreign, Thai, or company ownership
 

Does that make any difference to the potential buyer?

[eXplosief]

Yes. As the names suggest as a foreigner you can only by those apartments in foreign name. 

It has to do with the law stating foreigners can not own land. So less the 50% of the apartments can be owned by foreigners. 

As a foreigner you can also not own more then 49% of a company. 

[geezer2005]

21 minutes ago, eXplosief said:

Yes. As the names suggest as a foreigner you can only by those apartments in foreign name. 

It has to do with the law stating foreigners can not own land. So less the 50% of the apartments can be owned by foreigners. 

As a foreigner you can also not own more then 49% of a company. 

OK, so as a foreigner, you can only purchase a condo that is labelled as "Foreign Ownership"

[sulu]

8 minutes ago, geezer2005 said:

OK, so as a foreigner, you can only purchase a condo that is labelled as "Foreign Ownership"

Not sure about that. As the other gentleman mentioned, Thai ownership of units must be more than 50% of the total.

So theoretically, if 60% of a 100 unit building were Thai owned and a foreigner bought 1 of the Thai owned condos, the building would still be more than 50% Thai owned.

I expect someone will be along with a more definitive answer.

[eXplosief]

14 minutes ago, geezer2005 said:

OK, so as a foreigner, you can only purchase a condo that is labelled as "Foreign Ownership"

Or you could start a company, of which you can not have a controlling share, that owns the condo. 

But there many threads on this topic and many people who know more on the topic and can probably better explain the details. 

[barnsey]

13 minutes ago, sulu said:

Not sure about that. As the other gentleman mentioned, Thai ownership of units must be more than 50% of the total.

So theoretically, if 60% of a 100 unit building were Thai owned and a foreigner bought 1 of the Thai owned condos, the building would still be more than 50% Thai owned.

I expect someone will be along with a more definitive answer.

The number of units is irrelevant. (Assuming they are NOT all the same size) The quotas cover the total sq metres of all the condos in total. A 100 condo building would not necessarily mean a 49 / 51 condo split. 

[geezer2005]

9 minutes ago, barnsey said:

The number of units is irrelevant. (Assuming they are NOT all the same size) The quotas cover the total sq metres of all the condos in total. A 100 condo building would not necessarily mean a 49 / 51 condo split. 

But if a condo is advertised for sale as foreign ownership, does this mean a foreigner can purchase this?

[barnsey]

7 minutes ago, geezer2005 said:

But if a condo is advertised for sale as foreign ownership, does this mean a foreigner can purchase this?

Assuming 51% of the REMAINING SURFACE AREA of the building is Thai owned then yes, otherwise it's false advertising? That's what lawyers are for I suppose. It's quite disturbing how many folk buy condos and don't actually understand the 51 / 49 % rule fully.

[Scuba+]

In some condo blocks the foreign quota is oversold so they may have to go back to max 49% quota which means foreign will need to be transferred to Thai which reduces the value. It could be you

 

 

[just hanging]

if you are in a condo, really try to get it in your name, but it will be more expensive but you do not have to do the yearly company paperwork.  If you have a house, you have no choice but go the company route

[JAI DEE MAK]

6 hours ago, scubascuba3 said:

In some condo blocks the foreign quota is oversold so they may have to go back to max 49% quota which means foreign will need to be transferred to Thai which reduces the value. It could be you

 

 

Correct this has not be mentioned a lot Here on PA treads very good of you to do so as there are a few condos out there in this predicament.

Bottom line get a reputable attorney to check everything out. you will need to pay but it could save you a lot of pain and suffering.

JDM

[usexpat46]

6 hours ago, scubascuba3 said:

In some condo blocks the foreign quota is oversold so they may have to go back to max 49% quota which means foreign will need to be transferred to Thai which reduces the value. It could be you

 

 

Do you know if it would be the last units sold in a foreign name or just the next foreign unit up for sale?  If its the latter then its possible that the very first unit sold to a falang many years back could not be sold in foreign name.

[Scuba+]

Do you know if it would be the last units sold in a foreign name or just the next foreign unit up for sale?  If its the latter then its possible that the very first unit sold to a falang many years back could not be sold in foreign name.

From what I read it's the first sales until foreign quota % reached, but hopefully a good lawyer can help as JDM said.

[just hanging]

1 hour ago, scubascuba3 said:

1 hour ago, usexpat46 said:

Do you know if it would be the last units sold in a foreign name or just the next foreign unit up for sale?  If its the latter then its possible that the very first unit sold to a falang many years back could not be sold in foreign name.

From what I read it's the first sales until foreign quota % reached, but hopefully a good lawyer can help as JDM said.

they did this with my friends expensive penthouse condo, he brought it at the building stage, wanted to sell it later to get a different one and they took his foreign owner away.  Wrong guy to do it too, good lawyer and fixed quickly

[KittenKong]

20 hours ago, JAI DEE MAK said:

Bottom line get a reputable attorney to check everything out. you will need to pay but it could save you a lot of pain and suffering.

A lawyer, good or bad, wont really help in the case of a resale. Why? Because the Land Office will only process the transfer to a foreigner if to do so will not put the building farang/Thai ratio above 50%. It makes no difference at all whether the current owner is a farang or not. Only the building ratio on the day matters.

However, the Land Office relies entirely on figures supplied by the JPM of the building, and any lawyer would also have to rely on those figures because no one else maintains them. So a lawyer can only check what the Land Office will be checking anyway. JPMs have been known to make mistakes both deliberate and accidental, for whatever reasons.

An off-plan purchase is infinitely more complex and anyone considering one would be well advised to get all documents checked. But the problem there will be to find a competent and honest lawyer.

[KittenKong]

19 hours ago, scubascuba3 said:

20 hours ago, usexpat46 said:

Do you know if it would be the last units sold in a foreign name or just the next foreign unit up for sale?  If its the latter then its possible that the very first unit sold to a falang many years back could not be sold in foreign name.

From what I read it's the first sales until foreign quota % reached, but hopefully a good lawyer can help as JDM said.

 

For off-plan buildings it is entirely up to the developer which units he chooses to count as part of the farang quota. In most buildings they will select the better more expensive units (ie better view, higher floor, larger area) to sell in farang name as they could expect to get a better markup on them. However they could just do it on a first-come first-served basis instead.

For existing buildings, there are some in which the ratio has gone above 50% for various possible reasons (the two common reasons are errors made by JPMs and units that were sold during the first Asian crisis, at which time the ratio was relaxed in some buildings to 70%). The lack of any reliable recording system for the ratio means that the Land Office simply refuses all transfers to farangs until the ratio drops back below 50%. I think that this is very unfair.

In some new and old buildings, even in Pattaya, the ratio is well below 50% anyway so there is no problem at all.

[usexpat46]

On ‎11‎/‎1‎/‎2017 at 01:36, geezer2005 said:

OK, so as a foreigner, you can only purchase a condo that is labelled as "Foreign Ownership"

No, as long as the condo complex is currently under 49% owned by foreigners and the purchase would not exceed 49%.  An Aussie bought in my complex from a Thai and since the complex was under 49% he bought in his name.

[Scuba+]

No, as long as the condo complex is currently under 49% owned by foreigners and the purchase would not exceed 49%.  An Aussie bought in my complex from a Thai and since the complex was under 49% he bought in his name.

Did he advertise it as Thai but can be transferred to foreign? I doubt it's worth enquiring for Thai quota condos on the off chance it can be transferred to foreign.

[usexpat46]

2 minutes ago, scubascuba3 said:

47 minutes ago, usexpat46 said:

No, as long as the condo complex is currently under 49% owned by foreigners and the purchase would not exceed 49%.  An Aussie bought in my complex from a Thai and since the complex was under 49% he bought in his name.

Did he advertise it as Thai but can be transferred to foreign? I doubt it's worth enquiring for Thai quota condos on the off chance it can be transferred to foreign.

I don't think it was advertised.  The Aussie was friends with another Aussie who also lived in the complex.  His girlfriend was the sister of the other Aussie's girlfriend so he wanted to live nearby. The Thai who he bought from owned more units in the complex as he was one of the sons of the developer. When he bought it was still a shell and he had to wait a couple months before moving in.

[artie1234]

I rent in Thailand, this process gives me a lot of flexibility to do what I want.  Renting is affordable/easy and I am mobile.  I am king of my castle, not 49%

[brutox]

A lot of information here, some of which is reliable and some .. mmm .. not so much.

I spent a lot of money and time with the Thai attorneys of very good international law firms here, working through the foreign ownership structuring for many property assets we (foreign private equity firm) acquired following the 1997 Currency Crisis, and a few properties I acquired and developed afterward.

1.  Most all correctly cite that the sale of a condo will not be accepted for recordation by the Land Office if the condo ownership exceeds 49% of a building, regardless of whether the condo seller is a foreigner and entitled to foreign ownership.

2.  The 49% allowable foreign ownership limit is exclusive to registered condominiums only, and based on the gross building area (which is calculated under Thai codes differently than in most other countries), not the number of units in the building.

3.  Foreigners may not own land, except under exceptional circumstances approved by the Board of Investment (BOI) for which residences are unqualified .. foreigners may own the buildings located on the land, and they may lease the land or the right of land use under various scenarios .. the maximum land lease period is 30 years .. while many believe that pre-agreed lease extensions beyond 30 years are legal, they are absolutely not and are unenforceable upon the land owner.

4.  Company-owned units are known colloquially as nominee companies, which have the appearance of a Thai majority-owned company, so are considered Thai owners.  They are illegal .. full .. stop .. we paid a ton of legal fees to have these tested by the local offices of international firms White & Case and Baker Mckenzie .. local Thai attorneys touting nominee companies as a solution are not to be trusted .. they go through all kinds of convolutions attempting to circumvent Thai law, wrongly claiming that:

• The foreigner can loan 51% of the money to the Thai nominee, the loan terms of which can be used to indirectly control the Thai majority shareholder; or,
• Special shareholder rights can be written to give the minority foreign shareholder voting rights exceeding the Thai majority shareholder's majority vote; or,
• A pre-executed undated agreement by Thai majority shareholder can be used to replace them for any reason by the minority foreign shareholder; or,
• Negative controls can be written into the company bylaws preventing the Thai majority shareholder from unilaterally doing anything without the minority shareholder's approval.

All of these are interpreted by the Thai courts as the foreigner having effective control of the Thai company, which is tantamount to majority ownership by the foreign minority shareholder, giving the foreigner the essential rights of land ownership, and circumventing the Thai law.

Just Hanging, I am guessing that you bought into your nominee company structure some time back, when it was quietly overlooked by officials with a wink and a nod .. not so much anymore .. I am aware of two cases in Phuket where foreign owners of luxury villas under nominee structures were extorted by Land Department officials to look the other way .. so be aware, my man, be aware.

 

[david555]

On ‎11‎/‎2‎/‎2017 at 11:05, artie1234 said:

I rent in Thailand, this process gives me a lot of flexibility to do what I want.  Renting is affordable/easy and I am mobile.  I am king of my castle, not 49%

Freedom to move indeed ... King of your (rented) castle yes ...until somebody bought the for sale castle ...as all is for sale in Pattaya ........and do not trust too much the value of your renting contract that moment ....

[chris2004]

Basically it is illegal to buy property via a company (even though people do). Only buy a condo in foreign name, after checking the condo has not exceeded the 49% in total.

[david555]

Just now, chris2004 said:

Basically it is illegal to buy property via a company (even though people do). Only buy a condo in foreign name, after checking the condo has not exceeded the 49% in total.

Better even , let make an exclusion in your first paper you sign that the deal is void if registration office land department can not /will not inscribe on your foreign name ....WHY ? , simple as any deposit you gave already you risk to loose it ...... as sellers know it would cost you more  probably to go court than the deposit ..... "easy peasy money for dishonest realtors / sellers ..... "so give security /certainty to seller but avoid deposits ....or at least know you can loose the deposit

[Edge]

On 11/2/2017 at 10:34, scubascuba3 said:

On 11/2/2017 at 09:50, usexpat46 said:

No, as long as the condo complex is currently under 49% owned by foreigners and the purchase would not exceed 49%.  An Aussie bought in my complex from a Thai and since the complex was under 49% he bought in his name.

Did he advertise it as Thai but can be transferred to foreign? I doubt it's worth enquiring for Thai quota condos on the off chance it can be transferred to foreign.

If you're waving a stick at condo's Pattaya wide I agree.
If you've specifically identified a block you're looking to buy in, then try to find out what the current quota situation is and then you have a better idea whether to enquire after Thai owned condo's in it.

But......see below.

4 minutes ago, david555 said:

Better even , let make an exclusion in your first paper you sign that the deal is void if registration office land department can not /will not inscribe on your foreign name ....WHY ? , simple as any deposit you gave already you risk to loose it ...... as sellers know it would cost you more  probably to go court than the deposit ..... "easy peasy money for dishonest realtors / sellers ..... "so give security /certainty to seller but avoid deposits ....or at least know you can loose the deposit

This.

@brutox  Thanks for the above post.