Guideline
Steps for buying Property in Thailand as a Foreigner.
Investing
into a Thai company
A Foreigner can invest in a Thai company with the following
conditions:
§
The Foreigner can be director of the company
solely or together with other foreigner or Thai.
§
The Foreigner can hold the share of the Thai
Company up to only 49%. The Rest 51% has to be hold by Thai Nationality.
§
The minimum shareholders of a Thai Company are 3
persons.
§
A company in Thailand has a legal duty to submit
the balance sheet to the government departments, commercial and revenue.
Failing to do so may cause penalty, or even the company being deactivated by
the government department, which needs to have the court order to re-activate
the company.
In case one of the assets of the
company is a Condominium:
·
The company shall be one of the co-owner of this
condominium according the Condominium Act. All co-owners have to comply with
the regulations of the condominium. We recommend the client to study and
understand the regulations before making decision, to prevent any unexpected
rules later.
·
Also it is highly recommended to go through the Condominium
act of Thailand to learn more about the legal rights of the co-owners.
·
The management of the condominium plays an
important role to maintain the condominium common area, which could determine
the living of all the co-owners. It is very difficult to learn the structure of
the condominiums operation, in a small timespan, but the client can examine
just the overall picture of the condominium, especially on the common
facilities, such as swimming pool, fitness room, lobby etc. The cleanliness of
facilities and equipment and the state/order can be one of the items that could
determine the level of maintenance of the common area.
·
The common fee needs to be paid to the
condominium juristic person. The client should know and understand the common
fee rate, and method of payment to be able to access to all common area and
facilities of the condominium, and ensure all legal rights of co-owner.
·
The company shall be one of the co-owner of the
“Moobaan Jadsan” public zone, according to the Housing Estate Development Act
and drafted by the Housing Estate Committee. Many of the older “Moobaans” fail
in a correct setup, but most newer housing estates have licenses for housing
estate development, which must be approved by the Housing Estate Commitee. To
obtain the license the developer will have to provide the plan or location map
of all plots of land with the common areas, public utilities and
infrastructure, (e.g. swimming pool, club houses, street, recreational and
sport areas. Ect) Moreover the developer is required to arrange for a guarantee
by a financial institution for the infrastructure and public utilities.
·
The developer will be responsible to set up a
committee, until more than half of the houses in the project are sold, after
which the owners may jointly set up a committee to take over all rights and
responsibilities of the first committee. There is no tax for transfer of public
areas and infrastructure to the committee; – this tax exemption will also
include the membership fees. The committee will manage the Moobaan by the
resolutions of all of the owners, according to the “By-laws.” of the committee.
The resolutions may be by a majority vote (over 51% or more), according to the
By-laws of the committee.
·
“Section 4” of the Housing Estate Development
Act (2000), requires a project having from 10 plots of land or more to apply
for a License for a Mooban Jadsan (Housing Estate Development Project). A Moobaan
Jadsan with the license is deemed a juristic person under Thai law. In the
beginning, the developer will be responsible for management to look after all
common areas and utilities. After all houses are sold, the developer may
alternatively transfer the public areas and utilities to a municipality, or
transfer to the committee set up by half of owners of the houses in the Moobaan.
The latter case is quite advisable because the owners can maintain their
privacy in the community especially Pattaya whereby people cherish their
environments.
·
The management of the Moobaan can be carried on
by the real owners who will look after their interests. The By-laws can be
jointly drafted by the owners, which can be bilingual. All incomes from
membership fees and common expenses can be controlled by efficient accounting
system whereby the balance sheet or financial statements can be made by a
qualified accountant and audited by a Chartered Public Accountant (CPA) at the
end of the year.
·
All co-owners have to comply with the
regulations and by-laws of the Housing Estate. We recommend the client to study
and understand the regulations before making decision, to prevent any
unexpected rules later.
·
Also it is highly recommended to go through the Housing
Estate Development Act of Thailand to learn more about the legal rights of the
co-owners.
·
The management of the Housing Estate plays an
important role to maintain the common area, which could determine the living of
all the co-owners. It is very difficult to learn the structure of the Housing
Estate operation, in a small timespan, but the client can examine just the
overall picture of the common facilities, such as swimming pool, fitness room,
lobby etc. The cleanliness of facilities and equipment and the state/order can
be one of the items that could determine the level of maintenance of the common
area.
·
The common fee needs to be paid to the Housing
Estate juristic person. The client should know and understand the common fee
rate, and method of payment to be able to access to all common area and
facilities of the condominium, and ensure all legal rights of co-owner.
·
“Section 4” of the Housing Estate Development
Act (2000), requires a project having from 10 plots of land or more to apply
for a License for a Mooban Jadsan (Housing Estate Development Project). That is
to say, if you buy a house in a project having less than ten plots, you may not
seek the protection under the above Housing Estate Development Act. And the
developer does not have to follow all the rules set out by this Act. However,
this does not mean that these small projects will cheat you; – it simply means
that you just have less protection under the Thai law. The Pro”s for buying a house from small projects is the
lower price, but the Con”s are mostly the fact that a company who sells and
receives your deposit, is not always the same person whose name is recorded on
the land title deed as the owner.
·
When buying into a smaller project it is always
wise to have some additional checks which include:
|
·
Has the property direct access to a Government
Road. And if this is not the case is there a free way of passage to the
property, documented in the title deed of the “private” road which you have
to use gaining access to the property. ·
Is the property connected to PEA (Provincial
Electric Authority) or is electric provided via a “private” transformer with
sub-divisions. ·
Is the property connected to PWA (Provincial
Water Authority) or is water provided via a well. ·
Are there provisions in the title deed of the
“private road” for access of other utility companies like Internet or
Telephone. ·
Is the property connected to the government
sewage system, or a private waste water drain system. |
In
all cases find out to whom the utility bills are paid to. This gives an idea
who controls the supply and who is in control of eventual repairs and cost of
repairs in the future.
In case one of the assets of the company is a standalone,
Private Residence:
·
When buying into a standalone, Private Residence
it is always wise to have some additional checks which include:
|
·
Has the property direct access to a Government
Road. And if this is not the case is there a free way of passage to the
property, documented in the title deed of the “private” road which you have
to use gaining access to the property. ·
Is the property connected to PEA (Provincial
Electric Authority) or is electric provided via a “private” transformer with
sub-divisions. ·
Is the property connected to PWA (Provincial
Water Authority) or is water provided via a well. ·
Are there provisions in the title deed of the
“private road” for access of other utility companies like Internet or
Telephone. ·
Is the property connected to the government
sewage system, or a private waste water drain system. |