Can I buy a condo in Thailand through a Thai business?

Could you please explain the difference, if any, there would be between foreign ownership and purchasing a condominium through a Thai business? I want to buy a condo apartment and I am in the process of buying a unit but in this stage recommended by the developer to set up a Thai business for the purchase because the foreign ownership quota is filled up. Is it safe?

Asked 6 years ago
Thailand Lawyer Online
bangkoklawonline
Setting up a Thai company with the purpose of circumventing the law is illegal and void under the civil code. You can own a condo in an apartment building licensed under the thai condo act in your own name within the foreign ownership quota of the building. When you set up a thai company to own a condo on your behalf as Thai owned this could get you into trouble later, or may not. In addition you create a tax burden and tax liabilities which you would not have when you own the condo outright.
Answered 5 years ago
ME

If you buy a condo as a foreigner it must be within the foreign ownership quota of the condominium and you have to comply with the requirements of foreign ownership under the Thailand Condominium Act. 1- If you buy a condo through a Thai company you do not have to worry about the foreign ownership quota or any foreign currency exchange forms, but a Thai company is not an alternative for foreign ownership of a condominium. If you set up a company to circumvent the law this is without doubt considered illegal and void under the Civil and Commercial Code. The incorporation of a Thai company must have a business purpose. 2- If you form a Thai limited company to receive ownership on your behalf you could also be considered the principal under Thai law (chapter 'Agency' in the Civil Code). The company is legally considered your agent and the condo is therefore legally considered your property. As a matter of law, you as the foreigner principal unlawfully acquired a condominium in Thailand (you did not comply with the requirements for foreign ownership under the Condo Act). 3- A Thai limited company in Thailand cannot be a holding company or vehicle to circumvent the law. The company must have a business purpose and must be actively trading. What will your business be and who will run it? There are other practical problems, like a majority of Thai shareholders and their rights and obligations, accounting and, if considered inactive possible removal from the registrar for companies (to name a few). 4- As a partly foreign owned company and with the requirements of being active and having a business purpose you have to comply with the Foreign Business Act and you as a foreigner personally acting on behalf of the company with the Foreign Employment Act. A partly foreign company has legal pitfalls and potential legal issues that could cause trouble during the company's existance. To answer your question, you as a foreigner can buy a condo in Thailand within the foreign ownership quota. A Thai business/ limited company cannot buy a condo on your behalf. You may be able to circumvent the law but this is not advisable.
Answered 5 years ago
nad

When you buy a condo in thailand on a company name, then under the housing and land tax act you must pay a yearly property tax at a rate of 12,5% over the rental value of the property, whether or not you have a rental agreement with your company or rent is paid in the company accounting books. It is simply under the housing and land tax not considered 'owner occupied', so in addition to the condo fees you pay this extra what some call a 'rental tax', irrespective if rent is paid.
Answered 5 years ago
ME

Please register/login to answer this question.  Click here to login