Normally a villa can be acquired1 of 4 ways:
1.) Limited Company
3.) Property Holding Company
4.) Thai wife/girlfriend name.
We will deal briefly with each in turn…
1.) Limited Company. Foreigner holds 49% of shares. Thai shareholders own 51% but pre-sign
share transfer forms so if Buyer wants to sell in the future this is formality. Land is transferred
into the company. The house is in the buyer’s personal name. The buyer is made sold director
(i.e. he wouldn’t unless he wanted to!) Company rules Changed so sole director (i.e. the Buyer)
is the only person able to sell the land or create a loan charge on it. He therefore effectively has
100% control. Buyer should hold the Chanote (title deed) for safe keeping. The company is
legally bound to submit a balance sheet at the end of each tax year which costs 15,000 bath and
also pay building tax which ranges between 1,000 and 30,000 depending on the size of the property.
2.) Lease. 30 years generally pretty rock solid unless an unscrupulous developer.30 year extension
Pre signed (plus sometime another 30 year too.) Main problems normally encountered if want to
sell. Also it is possible to transfer the name on the lease to a family member or friend and the
lease date starts from that day. The process of changing the name on the lease is chargeable 1.1%
of the estimated price of the land. This is a one off fee for each 30 years period. There are no
balance sheets to be paid yearly (as no company is involved) and the land owner is responsible for
any building taxes.
3.) Property holding company . A relatively new I dia. Thai shareholders own a company
completely. Acquire the land of the Buyer by having a loan from him which is secured on the
land (so effectively he controls it and can demand it black and no other loan can be created on it).
Property holding co charge him a rent but pay him interest in return. Rent is slightly higher than
the interest so they make a very small profit each month (from 1,500THB upwards) to cover their
VAT, tax, admin and audit fees. Buyer holds the Chanote (title deed) for safekeeping. The
house is registered in the Buyer’s name.
4.) Thai Wife / Girlfriend. This can present its own particular set of difficulties, but set up
property from the start, land in her name, watertight lease / licence to Buyer.
Buyer to hold Chanote House in Buyer’s name.
Will and pre-nup recommended too.