In this section you will find legal information regarding your dream house, taxes, company set up, building permission and local laws.
About Us and Information For the Beginner
At Samuiparadiseproperties.com, we pride ourselves on offering our customers outstanding value, quality and service. Value in that our properties are amongst the best priced in the area, quality in terms of the standard of properties that we have for sale and service in the step by step support we give you throughout the whole process. We provide a full range of services for both the buyer and the seller of property or building land. Whether you are looking for a holiday home or a property for investment Samuiparadiseproperties.com, we have the necessary skills and expertise to guide and assist you through the process. Pensit Laws will help you with all the legalities involved with buying/selling your paradise property.
Foreign Ownership Rights
A foreigner is allowed to be the owner of a building that is distinct from the land, coupled with a registered, renewable 30 year lease. This is often regarded as being as good as owning the freehold.
Leasehold vs Freehold
Many questions can be asked as to which method is better and arguments can be made for both cases. Foreigners cannot be outright land owners, but registered leaseholds that are appropriately extended are often seen as the equivalent to freehold. These registered leaseholds are easy to setup and safe. If you are not comfortable with leasehold, using the freehold method means that the Thai company (that you can control) is the property owner
Foreign control (voting and management) is not prohibited by the The Land Code of Thailand in conjunction with the FBA (Foreign Business Act) in a Thai majority owned company that are land owners in Thailand. It is of paramount importance (considering the previous points made) that a proper legal structure is embraced to retain control effectively over a Thai majority owned company that is a land owner in Thailand, whilst avoiding provisions for anti- nominee and anti-agency, a number of methods can be employed to ensure effective management and financial control is affected by foreign minority shareholders These may include (but are not limited to), creating varying classes of shares, with differing voting and directorial appointment rights.Additionally you may add a safeguard by ensuring that you set up a company that controls the freehold land, from which you then lease said company that is owned by you as an individual. You may also have a mortgage registered by the company over the land in your favour.If you choose a freehold property purchase, it is recommended that you consult with Pensit Laws, who will embrace a proper legal structure that will protect your interests, and are able to explain to you in your own language (or a language that is well understood by you),in detail.Please be aware also that there are tax implications and legal responsibilities respectively in the owning and running of a Thai companyIf your choice should be the Freehold ownership and control method you should apprise yourself of the costs involved, responsibilities and implications by consulting professionals in this field.
Paying For Your Purchase In Paradise
For Thailand property payments in Thai Baht please ensure that the funds are transferred in foreign currency into Thailand and then converted to Thai Baht hereThe receiving bank will then issue a Thor Tor 3 Certificate confirming the transaction.The Thor Tor 3 certificate is a document that will be needed in the future to enable you to repatriate funds and not incur tax penaltiesPlease also be aware that Thor Tor 3 certificates are only issued by banks for individual inward transfers that exceed 20,000 US dollars.Investment funds and overseas borrowing in foreign currency can be freely remitted upon submission of supporting evidence for repatriationThe Thor Tor 3 certificate would be a document used to support the above, or in respect of a foreign currency loan, the loan contract. If funds are remitted without proper documentation these could be regarded as income and therefore become liable for tax.Most Koh Samui developers and estate agents like to simplify this process by allowing the purchase of your property in foreign currency. Your money is usually directly transferred into one of their offshore accounts. The leasehold or freehold will then be setup for you directly on remittance of this money.When you wish to sell your property you simply sell it on in foreign currency.
Two different types of tax are levied on Thailand property, these are:Land tax and Structures usage taxLand tax is very small and is levied on land owned and is equivalent to only a few Baht per Rai per year.The land office rarely bothers to collect this tax as it is such a small amount, they may wait a few years to collect it until the amount is worth collecting. For commercial purposes you can largely discount this tax.
Structures usage tax applies at the rate of 12.5% on the actual gross rental value of the property,(or the assessed gross rental).
Lessees are not subject to Structures usage tax but may be required to pay an “annual ground rent” to the developer instead.
Land Title deeds are officially called Nor Sor Jor 4, but are more commonly known as “Chanote”, these are issued by the Surat Thani Provincial Land Office.
Land that is held under a Chanote is surveyed accurately and plotted by GPS in relation to a national survey grid with unique “numbered” marker posts set into the ground
When searching for land you can expect to find many land documents in the form of Nor Sor 3 and Nor Sor 3 Gor which in the strictest interpretation of the law are certificates of land utilization
These are the equivalent in all practical purposes to land title deeds, because they allow land to be leased, mortgaged or sold in the same way as land that is held under a Chanote title.
A Nor Sor 3 certificate is different in that it is less accurately surveyed than a Chanote.
The boundaries of a Nor Sor 3 are recorded in relation to its neighboring plots, therefore survey errors may occur in length and land area
The Nor Sor 3 Gor certificate being newer is a much more accurately surveyed title in general as each plot is crossed reference to a master survey of the area and a corresponding aerial photograph
There are a host of “land papers” which all serious investors would be advised not to give any credence to. Essentially these forms claim to show rights of possession which have been filed with the district land office and which a tax fee has been paid. Land held under these papers cannot be leased, sold or mortgaged and more importantly building approval cannot be applied for or obtained in respect to this land
To conclude we would recommend that any foreigner wishing to buy land should only consider that which is held under a Chanote or Nor Sor 3 Gor .If you are ever in any doubt we would always suggest that you consult a professional. We highly recommend Pensit laws. Contact firstname.lastname@example.org for all your legal requirements.
More Info: Thailand laws
There are a number of legal issues to be considered when buying property in Thailand. While it is well known that a foreigner cannot buy land outright in their own name, there are legally acceptable methods which allow you to effectively 'own' land.
The most common way is to set up a Thai company which can purchase the land. As a foreign national you may not own more than 49% of the shares, 51% Thai, but there are legal methods that can be employed to allow you to have sole control over the activities of the company, share transfer.
Although a foreigner may not purchase land outright, the same does not apply to buildings on that land. Therefore properties can be acquired with registered and renewable 30 year leases. The long terms of these leases means that you effectively own the freehold of the land.
It is important to approach any purchase with the same caution you would in your home country. There are of course pitfalls which you need to be aware of, but by employing the services of a reputable professional to guide you through the purchase process, these can easily be avoided.
Titles of Land
Chanote titles are issued by the Land Department and are accurately surveyed and plotted in relation to the national survey grid. They are also marked by unique numbered posts set in the ground. The ownership of the land title can be transferred within a matter of hours. This is the best type of land title for a foreign investor. Nor Sor Sam Kor titles, though still measured relatively accurately, are less accurately measured than Chanote titles. Transfer of ownership can take slightly longer than the case of Chanote.
The predecessor to Nor Sor Sam Kor was Nor Sor Sam. The boundaries of Nor Sor Sam titles are only recorded with relation to adjacent plots and survey errors of up to 20% are not unusual. Nor Sor Sam titles also require 30 days public notice before any change of land ownership can occur.
There are many types of land title less recognized than Nor Sor Sam such as Sor Kor Nung. These are basically a form of squatters or settlers claim. You cannot even apply for or obtain approval to build on such land.
With this in mind the only two types of land title you should even consider are Chanote and Nor Sor Sam Kor. Always consult a qualified professional before committing to any land purchase.
Visas, Work Permits and Retirement
There are several routes to obtaining residency in Thailand, however they generally involve inward remittances invested in bank deposits or approved businesses. Retirement visas are more simply acquired based upon age requirements and demonstration of relatively modest local deposits and/or sources of offshore pension income being remitted to Thailand. Overall, Thailand is a relatively easy place to live and do business in.
Be aware that such a visa does not automatically give you the right to work in Thailand. Should you wish to work you will also be required to obtain a work permit.