By: Mr. Ponthep Werachon,Thai Solicitor & Mrs.Darunee Werachon, Thai Solicitor & Accountant of WERACHON LAW OFFICE, 315/304, Moo 12 Theppasit Road (Soi 12) Nongprue,Banglamung,Pattaya City, Chonburi 20260, Kingdom of Thailand Tel:(038)304 084,(038) 251 533Fax: (038) 304 027 Mobile: 081 423 4255,089 889 6483.

Website: www.thaisolicitor.com, e-mail:thai@werachonlawyers.com

To be or not to be the public enemy!

The property market in Pattaya increasingly becomes bread and butter not only for many expatriates in Pattaya but also Thais in other parts of the country. People are more interrelated, not only the best Thai food you can have in the UK, but also good English pie in Pattaya.

   Most expatriate property buyers in Pattaya have the nightmare that Thai law can be changed overnight and they may lose everything they own. Nobody can comprehensively explain the plethora of laws and regulations besetting all property buyers. However, the enforcement of laws is always tolerant. If the government blindly enforces the laws without studying the impact, it will definitely create a snow ball effect which is beyond our expectation.

   The expression “The exception proves the rule” makes us understand that we will have to see the exception of the law in order to make a judgment if that law is good. There is good news, the interim government has already withdrawn the controversial draft amendment of the foreign business act. How about expatriate property buyers in Pattaya? If they set up a company to buy a piece land with the area not more than one rai for residential purpose, they can still enjoy the tolerance of the laws. No law can be retroactive and detrimental to their rights.

Low Profile but High Profit

   To set up a simple company to own a piece of land, with the area not more than one rai, is still a preferable solution for many low profile expatriates coming to Pattaya for retirement. These expatriates will not be involved in any conspiracy theory like expatriates in other expensive resorts in the south. In Koh Samui, some expatriates set up 300 companies to buy property. What lies beneath?

   If you are not involved in any illegal business, e.g., money laundering, you should set up only a simple company with a clear shareholding structure not involved with other offshore jurisdictions, e.g., British Virgin Islands or BVI.

   The business activity of this company should not be involved with real estate business in order that the company will not be liable for real estate taxes. The financial statements or balance sheet must be prepared at the end of the year with the English translation in order that you can understand all tax implications.

   The most important issue is that Thai shareholders will hold 51% of shares. You should know all of them quite well in order that you will not be implicated with any conspiracy they may commit.

   For expatriate property buyers who have a reliable Thai partner or spouse, not based on a casual relationship, the ownership structure of land, can be alternatively, by a 30-year lease agreement with a Thai partner. They can also arrange for a partnership agreement to share 50% with the Thai partner in case of separation.

   The other tough measure is to arrange for a loan that the Thai partner borrows money from you to buy land. The Thai partner will register a mortgage of that land to you with the land office. The disadvantage of this measure is that your Thai partner will not be happy because you will have absolute power on that land. Your Thai partner will not be able to do anything with the land without your consent. No transaction should be dealt through your Thai partner.

   Whatever ownership structure you use, you should deal with a developer or owner of the land by yourself by signing a contract and make direct payment to the owner. You may have your own lawyer or Tanai Kwam to assist you without any conflicts of interest. In Pattaya, there are many unlicensed persons professing themselves to be a lawyer or Tanai Kwam. They always call themselves “Legal Advisor”. You just ask a person dealing with you to confirm if he or she is a “Tanai Kwam” and show you a lawyer license issued by the Lawyers Council of Thailand.  

   It is advisable to weigh the pros and cons of the above measures in order that your aim of happiness in Pattaya will not be disturbed by your suspicious mind. For more knowledge about Thai property laws, you may visit our reading room www.thaisolicitor.com.

   You are not a public enemy. Just keep yourself low profile with the high profit of happiness because what will be the profit of the man who grains the whole world but losing his soul.