Due to Thailand’s far from relaxed laws on buying property after the financial crash of the mid 1990s, there are only a limited number of ways to take advantage of the wealth of property for sale in Thailand. One of these is to set up a company in Thailand and then purchase the property. So, how is this done and what are the costs, issues and hassles involved?
One way to buy land in Thailand is to become the principal investor in a Thai export orientated business that is Board of Investment approves. This allows you to own up to 1600m2 of land. You can also own the same amount of land with investment of 40m baht for a minimum number of years or obtain Thai Residency.
A simpler and less costly way in Thailand that allows you to own land is to create a Thai company . To do this you will need three shareholders, you are inclusive. Some older versions of this have eight shareholders. In this scenario the buyer (now director) is the sole signatory for all things to do with the business. The director then gets documentation from a solicitor which gives them 100 per cent control of the company. There is a small tax payment each year, but the land is now owned by you but registered in a Thai Company name.
In Thailand transfer fees or land registration is 2 per cent of the total cost of the land purchased. Stamp duty is calculated at 0.5 per cent of the assessed worth or the sale price – whichever is higher is what you pay. A specific business tax is also calculated in the same way. This is assessed at 3.3 per cent of the highest value .
Buying a condo in Thailand can also be done in a Thai Company name, as explained above. It is also possible to purchase up to 49 per cent of the residential area in a condo block in a foreign name.. All that is needed is proof that the money used for purchasing originated as foreign currency and came from abroad. This is done as the receiving bank issues a Tor Tor 3, which will be required at the land office at time of transfer of ownership.
It is also very wise to appoint a lawyer or use a reputable agent to go through all these dealings, especially as purchasing property in Thailand can have its issues, especially if you purchase in the aforementioned company manner.
When you do find the perfect property for sale make sure you get a trusted solicitor or use an establishes agent who can read all the Thai and understand all the legal connotations of the contract as if you don’t you may end up with some serious issues. Remember that you are putting your trust in strangers to an extent and you should never purchase a property without the adequate amount of legal advice. Following the sensible and safe route is the best way and offers you the best way and form of protection of being hurt financially.