Buy a house on the right company
When buying land or a house, foreigners in Thailand are faced with the need to register real estate for the company. Today we are talking with the ABC lawyer Alexandra Agapitova about the intricacies of this process.
- One of the most common questions of clients is what is the authorized capital of the company to which the house is registered? Should it be no less than the cost of the house itself?
- To register a house on the company, it is possible to register a company with a statutory capital less than the cost of a house. The difference in the declared value of the company and the authorized capital is the loan agreement with the director of the company. The authorized capital, however, should be commensurate with the value of the property being acquired.
"Alexandra, but this is the question." After all, a foreigner can only buy land in the name of the company, right?
- Yes this is true. Land registration in the name of an alien in Thailand is impossible.
- Who is indicated in the contract as a buyer? Is it really necessary to have a company at the time of the transaction, which will be subsequently issued to the house?
- No, in the contract as a buyer can indicate a person who buys real estate. However, the document itself must contain a clause stating that the buyer has the right to indicate any person to whom the real estate will be subsequently registered. It can be a citizen of Thailand, for example, a wife, or a Thai company.
- Is it true that at the time of registration of the transaction in the Land Department, the actual buyer-foreigner will not be specified among the shareholders and only Thai citizens will be shareholders.
- Yes, indeed it is. Otherwise, it will be necessary to undergo a number of additional procedures that will delay and increase the cost of the transaction. The introduction of an alien into the shareholders is carried out immediately after the transaction is concluded at the Land Department. The procedure for introducing a foreign citizen into the shareholders will take several days.
- Is it dangerous? In fact, it turns out that you pay money for the house, and for a while they are owned by strangers? Is there no chance of losing the house at this stage?
- This probability will not be if the law firm that accompanies the deal takes all measures to protect the interests of the client. That's why it's important to contact a company that has proven itself in the market, and not in the one whose services are worth less. After all, if you make the wrong choice, you run the risk hundreds and thousands of times more than the difference in the lawyer's fee.
- Do I understand correctly that according to the law a foreigner will own 49% of shares in the company, for which his real estate will be issued.
- Theoretically, yes. Under the law, if the company does not own more than 49% of the shares owned by an alien, then such a company is considered a Thai legal entity and may own land. In this case, a foreigner, as a director of the company, will have the right to sign in the company, accordingly, no documents relating to his life, can not be signed without his participation. In addition, there are other mechanisms to protect the actual owner, which we can tell our clients when discussing the details of the transaction.
- Some foreigners in order to feel even more confident, the house itself is formalized, and the land on a Thai company. Is such a scheme providing additional protection?
- Indeed, this gives the foreigner the opportunity to feel more confident, however, this scheme does not bear any obvious advantages compared to the design of both home and land for one company. But in the case of the sale of the house, this scheme will complicate the whole process, because instead of one deal to sell a house standing on a plot of land, it will be necessary to make two transactions - selling the house and selling the land. Which increases transaction costs.