This is the most popular option with foreign investors as although Thai shareholding must be a minimum of 51%, the Land Code of Thailand along with the Foreign Business Act (FBA) does not prohibit foreign control (voting and management) of a Thai company. This means that a number of measures can be put in place to ensure that the foreign minority of shareholders have voting majority, management and financial control of the company. A limited company is just like an individual person. It is a legal entity in its own right which can make decisions, go into business, buy land or property and sell land or property. The limited company is owned by shareholders who appoint one or more directors to make the day to day decisions.When your own Thai company is set up, you will only be allowed to own 49% of the shares as Thai law states that the other 51% must be owned by Thai nationals. However, only you will be director, which means you control everything that the company does.
Normally, shareholders can override directors’ decisions, by calling a shareholders meeting and vote against the director, potentially putting him/her out of power. It’s a risk so to make it safe foreign owned companies should appoint a lawyer to set up two types of shares: – Ordinary shares 51% for Thai shareholders – “Special” shares 49% for you with more voting power and rights The rules of your company could state that only “special” shareholders can call a shareholders meeting, meaning basically, only you can ever call a meeting to vote on your own decisions. In addition, the “special” shares will be allowed ten (10) votes per share, whilst the ordinary shareholders will only be allowed one (1) vote per share. This means that if there was a vote, you would have 490 votes against 51. In other words, you would always get a 90% majority. You will be able to have 100% control over your company and you can sell your shares which will be worth 100% of the company value (because they give 100% control over the company and its assets). To sum it up, after completing all the appropriate paperwork you will have 100% control of a company which owns your land and/or house, effectively meaning you own the land and/or house and can do with it what you want.
You can have a 30 years lease with a 30 plus 30 years option to renew from the freeholder, and an option to buy. In order to legal and safe, any lease for a period of longer than three (3) years must be registered, which involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term. The original registered lease remains in force and in effect even if the property is sold.The drawbacks to a lease include the fact that the parties can contractually agree to renewals, but this right cannot be registered and is not protected against a sale of the property, and the lessee cannot (without the lessor’s consent) sublease, sell or transfer his or her interests.
Ownership of land, possession and use are governed by the land Code BE 2497 (1954), the Land Reform for Agricultural Act BE 2518 (1975), the Civic and Commercial code and by regulations issued by the Ministry of the Interior. There are mainly 5 types of Land Title Deeds in Thailand, namely:
- Nor Sor Saam Kor,
- Nor Sor Saam,
- Sor Kor Nung,
- Por Bor Tor Ha/Hoc.
Chanote – Nor Sor Jor 4 – The Highest Grade of Land Title: The Chanote Title is the highest and most sought after title for any purchaser, regardless of nationality. Issued by The Provincial Land Office, this title has been effected following a detailed and accurate survey, carried out by the official land surveyor, as well as being plotted in relation to a national survey grid and then marked by unique concrete numbered maker posts set into the ground within the boundaries. When considering land of this title you should be shown these posts to assure you of the extent of the size of the land. The land size is depicted on an official Chanote document with the measurement and a detailed drawing showing the round posts at each corner of the plot. The size and boundaries cannot be disputed in the future under any circumstances as each of the adjoining owners were required to be present at the measuring stage and will have given their signature to confirm the size of the plot being measured for Chanote. The purchase of Chanote Land can be executed extremely fast as there are no disputes as to the size or boundaries. No public notices are required nor can any surrounding owner dispute the measurements.
Land in Thailand is measured in Rai, Ngan and Talang Wah:
- 1 Wah = 4 m2
- 1 Ngan = 100 Wah or 400 m2
- 1 Rai = 4 Ngan or 1600 m2
- 1 Acre = 2.529 Rai
- 1 Hectare = 6 Rai and 1 Ngan