Setting up a Thai company to buy property can be a complex process, but with the right information and guidance, it can be done relatively smoothly. This article will provide an overview of the process, including company formation, registration, and purchasing property in the company’s name.
Company Formation:
The first step in setting up a Thai company to buy property is to form the company. This typically involves choosing a company name, selecting a registered address, and appointing directors. It is also necessary to register the company with the Department of Business Development and submit all the necessary documents.
Company Formation detail step-by-step procedure
Company formation in Thailand involves several steps that must be followed in order to properly establish and register a company. The following is a step-by-step guide to the process:
- Choose a company name: The first step in forming a company is to choose a unique company name. The name must not be identical or similar to an existing company and must comply with the regulations set by the Department of Business Development.
- Select a registered address: The company must have a physical address in Thailand, which will be used as the registered office address. This can be a commercial or residential address.
- Appoint directors: The company must have at least one director, who can be a Thai national or a foreign national. The director(s) must provide a copy of their identification and sign a form appointing them as a director of the company.
- Obtain a Memorandum of Association and an Article of Association: These are legal documents that outline the company’s purpose, capital structure, and management structure. They must be signed by the director(s) and notarized by a public notary.
- Register with the Department of Business Development: The next step is to register the company with the Department of Business Development by submitting the required documents, including the Memorandum of Association, Article of Association, and identification of the director(s).
- Obtain a Tax Identification Number (TIN): Once the company is registered with the Department of Business Development, it can apply for a TIN from the Revenue Department.
- Obtain a Business Registration Certificate: A Business Registration Certificate is required for the company to legally conduct business in Thailand. It can be obtained by submitting the necessary documents to the Department of Business Development.
- Register for Value-Added Tax (VAT) and Social Security: The company must also register for VAT and social security with the relevant government agencies.
It is important to note that these steps and the required documents might vary depending on the type of company.
Registration:
Once the company is formed, it must be registered with the relevant government agencies. This includes registering for value-added tax (VAT) and social security, as well as obtaining a tax identification number (TIN) and business registration certificate.
Process:
The process of buying property in the company’s name can vary depending on the type of property and the location. Generally, it involves finding a property, negotiating the purchase price, and completing the necessary paperwork. It is important to have a lawyer review the purchase agreement and assist with the transfer of ownership.
Process of buying property on company name step by step procedure
The process of buying property in the name of a Thai company can vary depending on the type of property and the location, but generally, it involves the following steps:
- Finding a property: The first step is to find a property that meets the company’s requirements. This can be done through a real estate agent, online listings, or by contacting the owner directly.
- Negotiating the purchase price: Once a property is identified, the company can negotiate the purchase price with the seller. This may involve several rounds of negotiations before a final price is agreed upon.
- Due diligence: Before making an offer, the company should conduct due diligence on the property to ensure that it is free of any legal encumbrances and that all necessary documentation is in order. This may include a property title search and a check for any outstanding debts or liens on the property.
- Signing a purchase agreement: Once the purchase price is agreed upon and due diligence is completed, a purchase agreement is signed between the buyer and the seller. The purchase agreement should be reviewed by a lawyer to ensure that all the necessary clauses are included.
- Making a down payment: A down payment is usually made to the seller at the time of signing the purchase agreement. The amount of the down payment will depend on the purchase price and the terms of the agreement.
- Transfer of ownership: Once the down payment has been made, the transfer of ownership of the property is completed. This typically involves transferring the property title from the seller to the company and paying the remaining balance of the purchase price.
- Register the property with the Land Department: The company must register the property with the Land Department by submitting the necessary documents, including the property title, purchase agreement and company registration.
- Obtain a Building Use and Occupancy permit (B.U.O.P) : The company must also apply for a Building Use and Occupancy Permit (B.U.O.P) from the local government office. This permit is required before the company can occupy or use the building.
Benefits of buying property on thai company name vs personal name
There are several benefits to buying property in the name of a Thai company rather than in one’s personal name. These include:
- Tax benefits: Buying property in the name of a Thai company can offer tax benefits, as the company can claim deductions for expenses related to the property, such as repairs, maintenance, and depreciation.
- Asset protection: Buying property in the name of a Thai company can provide a level of protection for the property against personal liabilities. In the event that the company faces legal action, the property may be protected from seizure.
- Easier to manage rental income: If the property is used as a rental property, it is easier to manage the rental income through a company rather than as an individual. This can simplify the process of collecting rent and paying taxes on rental income.
- Easier to transfer ownership: If the owner decides to sell the property, it’s easier to transfer ownership of the property to another person or company in the name of the Thai company.
- Easier to secure financing: Buying property in the name of a Thai company can make it easier to secure financing from banks, as they may be more willing to lend to a company than to an individual.
- Greater flexibility: Buying property in the name of a Thai company provides greater flexibility when it comes to managing the property and making decisions about its use.
- Anonymity: Buying property in the name of a Thai company can provide anonymity for the owners, as the company’s ownership is not publicly disclosed.
It’s important to note that setting up and maintaining a company can be costly and time-consuming, and there may be legal and regulatory requirements that must be met. It’s advisable to seek the help of a professional lawyer or accountant to ensure that the process is done correctly and in compliance with the regulations.
Pros:
- Buying property in the company’s name can offer tax benefits.
- The company can be used to manage rental income.
- The company can be used to protect the property from personal liabilities.
Cons:
- Setting up a company can be a complex and time-consuming process.
- The company must be registered and maintained, which can be costly.
Cost and expenses related to company formation and maintenance
The cost of forming and maintaining a Thai company can vary depending on the type of company and the services used. However, some of the expenses that may be incurred include:
- Company registration fee: There is a fee for registering a company with the Department of Business Development, which is based on the company’s authorized capital. The fee may range from a few thousand baht to tens of thousands of baht.
- Legal and accounting fees: Legal and accounting fees can vary depending on the services used, but they may include costs for drafting the Memorandum of Association and Article of Association, registering the company with the relevant government agencies, and providing ongoing compliance and accounting services.
- Annual government fees: There are annual government fees that must be paid to maintain the company’s registration, such as the annual filing fee and the fee for renewing the business registration certificate.
- Tax filing fees: The company is required to file taxes annually, and there may be costs associated with preparing and filing the tax returns.
- Insurance and audit fees: Depending on the company’s size and operations, there may be additional costs for obtaining insurance and for conducting an annual audit.
- Office and equipment expenses: If the company has its own office, there may be costs associated with leasing or purchasing the office space, as well as expenses for office equipment and furniture.
- Other miscellaneous expenses: There may be other miscellaneous expenses associated with forming and maintaining a company, such as costs for printing, postage, and communication expenses.
Tips:
- It is important to work with a lawyer who is familiar with the process of setting up a company and buying property in Thailand.
- It is important to ensure that the company is in compliance with all relevant regulations.
- Make sure to have all the necessary documents ready before starting the process.
In summary, setting up a Thai company to buy property can be a viable option for those looking to invest in the property market. However, it is important to understand the process and work with a professional who can guide you through the process. With the right preparation and guidance, it is possible to successfully set up a company and purchase property in Thailand.
