Mechanics of purchase

[penboy]

I'm considering buying a condo. The seller and I are both from the UK and he has suggested that if we agree on a deal that we exchange payment in the UK. His Thai wife and myself would go to the land office and do the necessary paperwork. It will be in company name.

Has anyone any experience of doing it this way. What are the pitfalls for me as a buyer. I'm aware that if the payment was done in Thailand, I would have to prove that the funds came in from abroad for the purpose of condo purchase.

If funds have not come in to Thailand, will I have a problem getting the cash out of Thailand when I sell?

It's Easter weekend so no chance of talking to my solicitor in the UK.

Constructive comments welcome.

[davidge]

You’ll probably think I’m not being constructive  but don’t buy a condo in company name. Plenty of fully legal, lesser hassle, well priced condos in foreign quota now on the market.

I’m guessing you’ll ignore me, so I’m sure someone will let you know the legal niceties involved in transferring company ownership. You’ll need a local lawyer, it’s not just changing condo ownership at land office as you have to transfer the company ownership, which doesn’t involve the land office - unless you already have a company and are transferring ownership to that company.

If you are taking over your friend’s company you’ll need to check if it has any debts, owes any taxes etc etc.

[LOTTELLEE WINNA]

OP - @davidge offers some hugely constructive advice…consider it.

[penboy]

Update: buyer happy to do payment in Thailand so that odd technicality not an issue.

[davidge]

8 minutes ago, penboy said:

Update: buyer happy to do payment in Thailand so that odd technicality not an issue.

From what you’ve said, I’m not sure either of you understand the process. Assuming it is the usual construct involved in the ‘dodge’ of condo ownership then the seller owns 49% of the company that owns the condo. You would take over this 49%. It would involve both of you going to a lawyer to do the transfer and sign documents. It wouldn’t involve the land office as the ownership of the condo is unchanged. Before you do this you should get an accountant to check the company has no debts.

2 situations where this wouldn’t be the process :

1. You have your own Thai company and transfer the condo ownership to that;

2. There is still ‘foreign quota’ available in the building so the condo can be transferred to you.

 

You need to check the details before agreeing to anything.

 

I’m sure someone will point out if I’m wrong about anything as I’ve not gone through the process as I wouldn’t consider it.

 

[biggles]

As you woukdconly own (or your company does) 49% then if you die that is all that can be passed on to your beneficiaries? 

A friend had a house in his company name and paid 25k a year in fees to submit all the paperwork. Why would you put it in a company name? Best to buy it in your own name, less worry and hassle. 

[davidge]

28 minutes ago, biggles said:

As you woukdconly own (or your company does) 49% then if you die that is all that can be passed on to your beneficiaries? 

 

The company owns 100% of the condo but the foreigner can only own 49% of the company - which should be set up so that nothing can be sold without agreement of the 49%. The 51% is often owned by random Thais that the lawyers use, or can be thai wife or partner or family if foreigner has one.

[Petesie]

Time for a bargepole; foreign name only. Company name was only used if the Farang condo quota in the building exceeded 49%.

[penboy]

Someone offered a higher figure than I was thinking of offering so it's gone.

 

[penboy]

1 hour ago, Petesie said:

Time for a bargepole; foreign name only. Company name was only used if the Farang condo quota in the building exceeded 49%.

I thought it was a case of Thai and company name condos no less than 51%. Farang quota never goes above 49%.

If farang wants a condo and there are none available in farang name, then farang goes down company route.

[penboy]

1 hour ago, davidge said:

The company owns 100% of the condo but the foreigner can only own 49% of the company - which should be set up so that nothing can be sold without agreement of the 49%. The 51% is often owned by random Thais that the lawyers use, or can be thai wife or partner or family if foreigner has one.

So using a well established Thai lawyer firm should ensure that the foreigner is protected?

[Petesie]

As previously stated, plenty of condo's around in farang name so not to worry one will turn up .

[penboy]

2 hours ago, davidge said:

From what you’ve said, I’m not sure either of you understand the process. Assuming it is the usual construct involved in the ‘dodge’ of condo ownership then the seller owns 49% of the company that owns the condo. You would take over this 49%. It would involve both of you going to a lawyer to do the transfer and sign documents. It wouldn’t involve the land office as the ownership of the condo is unchanged. Before you do this you should get an accountant to check the company has no debts.

2 situations where this wouldn’t be the process :

1. You have your own Thai company and transfer the condo ownership to that;

2. There is still ‘foreign quota’ available in the building so the condo can be transferred to you.

 

You need to check the details before agreeing to anything.

 

I’m sure someone will point out if I’m wrong about anything as I’ve not gone through the process as I wouldn’t consider it.

 

We both understand the process perfectly. The UK to UK bank transfer of cash was the reason for the thread.

[penboy]

2 minutes ago, Petesie said:

As previously stated, plenty of condo's around in farang name so not to worry one will turn up .

Yep, I've put the word out in the condo block so will sit back and wait.

Loads of empty condos but very few for sale at the moment. 

[davidge]

13 minutes ago, penboy said:

So using a well established Thai lawyer firm should ensure that the foreigner is protected?

Well, protected to a certain extent. Just be aware that every time this has gone to court it has been deemed illegal. Very, very few people have had this happen but they ended up losing their property. 

[davidge]

12 minutes ago, penboy said:

We both understand the process perfectly. The UK to UK bank transfer of cash was the reason for the thread.

I wasn’t sure as you’d both expected to go to the land office,

[columbus]

15 hours ago, davidge said:

The company owns 100% of the condo but the foreigner can only own 49% of the company - which should be set up so that nothing can be sold without agreement of the 49%. The 51% is often owned by random Thais that the lawyers use, or can be thai wife or partner or family if foreigner has one.

What could possibly go wrong 😅

[penboy]

18 hours ago, davidge said:

From what you’ve said, I’m not sure either of you understand the process. Assuming it is the usual construct involved in the ‘dodge’ of condo ownership then the seller owns 49% of the company that owns the condo. You would take over this 49%. It would involve both of you going to a lawyer to do the transfer and sign documents. It wouldn’t involve the land office as the ownership of the condo is unchanged. Before you do this you should get an accountant to check the company has no debts.

 

 

Just to clarify, the condo is in a Thai name, not a company name.

I would have had to set up a company.

Hopefully an appropriate condo in foreign ownership will come up for sale at a sensible price sometime.

[biggles]

Sorry, I am still confused. You have a company that owns 100% of its only asset, the condo, but you can only own 49% of the company. 51% is owned by Thais.

So If you drop dead how do your heirs get the other 51% after its sale and what is to stop the lawyer sharing that 51% with the Thais, who are probably known to him?  How are your heirs protected? 

[Joeleg]

The Thai or Falang lawyer /consultant will tell you the same thing. 51% owned by Thai citizens but to protect the foreigner, the 51% is split between 2 Thai nationals so they cannot outvote the foreigner. They will also tell you that there is only company director who is the foreigners who have access to accounts and to sign- off on documents. 

The above is for simpletons. 

The 2 Thai nationals even if the wife and her relative can gang up, attain 51% and get rid of all benefits from the scheme. When Thai legislature was promulgated, the intention is to protect the its nationals and the country's interest. Any scheme to evade it is illegal. Never assume that the Thai's are dumb. 

To attract foreign funds and encourage silver haired retirees, the condo scheme 49% scheme was introduced as the owning the company approach obviously will not fool most foreigners with funds. 

There are so many condos that are within the quota for sale, just exercise patience if you are looking for a specific property. All you need is to show the funds transfer from abroad and all the local Banks will furnish this specific document for condo purchase. The Thai know that no sane foreigner will hold savings in Thai baht due to their long history of currency instability, forced and unforced devaluation. 

The Condo under the condo scheme belongs to you (not the land) and no one else. It is the cleanest property ownership of any in Thailand and the most secure. 

Buying land and landed property via company ownership I can understand as there is no other workaround but buying a condo via company ownership make no sense to a foreigner. 

People are jus too nice in this forum. But clearly they are concerned and have couched the language but the intention is clear. 

 

 

[OKAY]

On 16/04/2022 at 17:48, davidge said:

Well, protected to a certain extent. Just be aware that every time this has gone to court it has been deemed illegal. Very, very few people have had this happen but they ended up losing their property. 

I believe you but I wonder who ends up with the property?  The government ?

[Joeleg]

25 minutes ago, OKAY said:

I believe you but I wonder who ends up with the property?  The government ?

They will be asked to sell in the open market and they can retain proceeds while facing separate prosecution for the illegal scheme. Trouble is the claims of ownership made by the citizen stakeholders to avoid prosecution. So the foreigner has to prove in court that the property was held in trust for him. So you are looking at 3 separate court proceedings. 

[davidge]

5 hours ago, OKAY said:

I believe you but I wonder who ends up with the property?  The government ?

There was the infamous case on Phuket a few years ago where the developer sold 2 houses to foreigners, obviously using a company, then took them to court. The sales were declared illegal and the developer got the houses back. I’m pretty sure he got to keep the money as well.