Integrity Legal

Posts Tagged ‘Thai Condominium’

5th August 2011

It recently came to this blogger’s attention that Economic Ministers from the jurisdictions which comprise the Association of Southeast Asian Nations (ASEAN) are set to meet in Indonesia over the upcoming weeks. Of especial importance, in this blogger’s opinion, is the fact that said meeting is set to include representatives from the United States of America and Russia. In order to shed further light upon these developments it is necessary to quote directly from the official website of The Nation, NationMultimedia.com:

Free-trade partners of Asean, in addition to the United States and Russia, will join Asean economic ministers for a meeting in Manado, Indonesia, next week with the aim of tightening economic integration. Indonesia will host the Asean Economic Ministers (AEM) meeting from August 9-13. Yanyong Phuangrach, permanent secretary at the Commerce Ministry, who will lead the Thai delegation to the meeting, said the main agenda was to forge closer cooperation among Asean member states and trading partners, mainly with FTA partners and the two economic giants – the US and Russia…

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In recent months there have been many positive developments in the ASEAN region as discussions pertaining to a possible unified ASEAN visa have been broached. Meanwhile, discussions pertaining to the South China Sea appear to have lessened some of the tensions between ASEAN members nations and China. However, as of yet, a final framework for dealing with the South China Sea has yet to be developed. As the ASEAN region continues to show further economic potential it stands to reason that geo-politically dominant economies will show increasing interest in the Southeast Asian region.

In news specifically related to the Thai Real Estate and Property markets, it recently came to this blogger’s attention that Singaporean and international real estate developers have noted their optimism regarding the Thai property market. In order to provide further elucidation regarding these developments this blogger is compelled to quote directly from the PropertyShowrooms.com website:

A Singapore property development company has decided to invest in a series of condominium projects in Thailand over the coming year. Speaking to Property Report, business development manager at Dalvey Developments Noel Goh described the Thai real estate sector as “a very attractive market with high growth potential”. “Moreover, property prices remain low when compared to neighbouring countries,” Mr Goh added…According to one Asian real estate expert, buyers from Hong Kong are increasingly being drawn to high-end properties in the Thai capital. Executive director for investment and project marketing at CB Richard Ellis Rebecca Shum told the Bangkok Post that the city is a “top-two destination for lifestyle” from the point of view of Hong Kong investors. She added that a rise in optimism about Thailand’s political and economic conditions is helping boost the luxury property market in the nation.

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For many, the purchase of property in Thailand can be a cumbersome and somewhat confusing endeavor as Thai law on the subject has been described as rather complex and, in some cases, byzantine. This is especially true in cases involving foreigners wishing to purchase land in Thailand since there is virtually a de facto prohibition on foreign nationals purchasing Thai land. That stated, such a prohibition does not exist in the context of a Thai lease, Thai usufruct, or Thai condominium. In fact, pursuant to the Thailand Condominium Act, foreign nationals in Thailand may be permitted to purchase a Thai Condo so long as that proposed real estate holding comports with the relevant provisions of the Act. For this reason, and many more, some opt to retain the assistance of an attorney in Thailand to assist in conducting due diligence and conveyancing matters pertaining to Thai property.

For information related to legal services in the Kingdom of Thailand please see: Legal.

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30th April 2011

Over the years this blogger has seen large numbers of tourists flock to the Kingdom of Thailand as well as the neighboring nations of Laos, the Union of Myanmar (referred to by some as Burma), Malaysia, and the Kingdom of Cambodia. At the same time, this blogger has also witnessed the metamorphosis of some of these tourists into entrepreneurs by remaining in some of these countries (as well as other jurisdictions in Greater Asia such as Indonesia, Vietnam, China, Taiwan, Singapore, Hong Kong, South Korea, Nepal, Macau, India, and Sri Lanka; to name only a few) in a business context for many years and; for some, even decades or a whole lifetime. Whatever the circumstances of those Americans Resident Abroad remaining in the region of economies increasingly being labeled by both the mainstream and alternative media outlets by their affiliation with the Association of Southeast Asian Nations (ASEAN) one thing is clear: the economies of Asia are set to expand at an incredible rate by relative historical comparison. Therefore, it stands to reason that there are likely to be more Americans doing business in these jurisdictions. This state of affairs is occurring at a time when the potential of the internet and the World Wide Web first noted little more than a decade ago is beginning to become fully realized by businesses large and small. As e-commerce becomes an evermore ubiquitous facet of virtually every enterprise’s business strategy it is becoming more clear that many business functions are increasingly being performed by businesses of all sizes online and, in some cases, these businesses are even being maintained from an entrepreneur’s home.

This phenomenon is interesting for this blogger to note from the perspective of an American who is resident in Bangkok, Thailand as the Thai shop-house business model of maintaining a residence and business premises within close proximity has lead to a thriving small business community in the vast metropolis that is Greater Bangkok. This thriving business community, coupled with many of the other positive factors associated with doing business in Thailand, has lead to a vibrant economy that remains conducive to further foreign investment by entrepreneurs and businesses seeking to derive economic benefits both in Thailand and throughout the Asian markets. Of possible importance to Americans resident abroad or those thinking of residing abroad are the issues noted above as well as those associated with ownership of Thai property or Thai real estate especially in the form of a Thai Condominium.

In Thailand, as well as throughout many jurisdictions in Asia, there are restrictions placed upon foreign ownership of real estate. Although there are provisions allowing for foreign ownership of Thai property in many cases it is difficult, if not impossible, for a foreign national to secure freehold title (referred to as Chanote title in Thailand) in Thai real property such as land. However, it may be possible for a foreign national in Thailand, such as an American Citizen, to conveniently secure freehold title to a Thai Condo if the provisions of various laws and regulations on this issue, such as the Thai Condominium Act, are adhered to. Meanwhile, a foreign national who owns a Condo in Thailand may be qualified to receive a Foreign House Registration Booklet (referred to as a Tabien Baan for Thais or a Foreign Tabien Baan, or Yellow Tabien Baan for foreign nationals). Taking the aforementioned factors into consideration, in conjunction with the fact that for American Citizens and American Companies in Thailand there may be benefits pursuant to the provisions of various legal instruments such as the US-Thai Treaty of Amity which may provide the privilege of virtually 100% ownership of a Company in Thailand with “National Treatment” for certain business undertakings, one is left with little doubt that there are tangible legal benefits which could be accrued to the favor of Americans resident in Thailand conducting business in the ASEAN region as well as the regions of Greater Asia. Therefore,  investing in what this blogger would refer to as a “Thai Pad” (which non-literally alludes to the IPad-like gadgets allowing for increasingly easy real time access to the internet as well as the exponentially beneficial combination of privileges accruing to owners of Thai property registered on a Yellow Tabien Baan in conjunction with the advantages which may be had for Americans resident abroad utilizing a Thai company certified under the US-Thai Amity Treaty) could prove to have been prudent by future analysts in both tangible as well as intangible terms.

For related information please see: US Company Registration.

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14th February 2010

The Treaty of Amity between the United States of America and the Kingdom of Thailand (US-Thai Treaty of Amity) allows American Citizens to own virtually one hundred percent of a Thai company. This can prove highly beneficial to American expatriates in Thailand who wish to conduct business. That being said, there are restrictions to the types of activity that an Amity Treaty Company can undertake. Most notable amongst the restricted activities are: land ownership, internal communications, internal transportation, fiduciary functions, and the liberal professions.

Under Thai law, there is a de facto prohibition placed upon foreigners when it comes to land ownership. This means that foreign nationals are not permitted to take freehold title to Thai property without first obtaining permission from the Thai Minister of the Interior. This prohibition is not all-encompassing as foreign nationals are permitted to take freehold title to Thai condominiums. However, the condominium complex must comport to the relevant provisions of the Thai Condominium Act. Most notable among the requirements in the Thai Condominium Act is the provision that a Thai condo complex must be primarily owned by Thai nationals, meaning that 51% of the Condo units must be owned by Thais while 49% percent of the units may be owned by foreigners.

In many cases, a condominium complex is owned by a company in Thailand. Some opt to own a condo in this way in order to make selling the condominium easier, while others initially purchase the condo indirectly through a corporate entity. In either case, the practice is technically legal. Although, use of so-called “nominee shareholders,” is illegal in Thailand and Thai authorities are increasingly on the lookout for corporate structures utilizing nominees. That being said, the definition of “nominee” is somewhat vague.

This leads us back to the issue of Amity Treaty Companies. Amity Companies are specifically precluded from ownership of Thai real estate pursuant to the provisions of the Treaty of Amity, while the Thai Condominium Act allows foreigners to own a Condominium outright. This begs the question: can an Amity Treaty Company own a Thai Condo in the same manner as a foreign natural person could? This author has not adequately settled this question in his own mind and welcomes any comments regarding this issue. The provisions of the Treaty of Amity preclude land ownership and although many believe that Condo ownership is simply ownership of a unit, the Chanote does pass title to an interest in the underlying land, so there would seem to be a compelling argument that a condo owner is something of a landowner and, if so, this practice would likely be precluded under the provisions of the Amity Treaty.

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26th October 2009

For those interested in purchasing property in the Kingdom of Thailand, Condominiums can be an attractive proposition. One of the major benefits of Thai Condo ownership is the fact that a foreign national is allowed to take possession of foreign freehold title to that particular piece of Thai Real Estate. In Thailand, foreigners are greatly restricted with regard to Thai property as they cannot own land outright. There are certain situations in which a Thai company can be utilized in such a way that a foreigner enjoys the benefits of land ownership, but these type of structures can be cumbersome and recently the Thai authorities have been cracking down on such entities.

Thai Condos provide the benefit of allowing the foreign national to be registered on the Thai Chanote (Title Deed). Further, by being the owner of a Condo in Thailand, the foreigner can apply to obtain a foreign Tabien Baan (house registration booklet) which can be a major benefit as this document is very useful in conducting legal and business transactions in the Kingdom of Thailand. Further, a Thai Condo owner may be able to enjoy some immigration benefits in the form of a Thailand visa as the owner can show that they are living in the Kingdom and contributing to the economy.

One notable issue that often arises in cases involving Thai Condominiums is the requirement that all funds used to purchase the Condo must originate from overseas. This requirement can be met by those earning an income in Thailand, but a great deal of paperwork must be submitted in order to use income earned in Thailand. An even more pressing issue, however, is that of capital flight after the future sale of a Thai Condo unit. The government of Thailand along with the Thai banks have promulgated policies in order to keep foreign capital in the Kingdom when that capital has been previously used to purchase Thai real estate. For example, if a foreigner in Thailand has a Condo unit and opts to sell it. The proceeds from the sale could be practically impounded in the sense that the Thai authorities will place many restrictions on sending said funds abroad. This situation can be averted throught prior planning. If one seeks the advice of a Thailand Real Estate lawyer, they could provide advice and strategies about how one can structure a Thai Condo purchase in such a way that the proceeds from a future sale can be moved abroad at a future point in time, should a sale even occur.

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