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Real Estate Holding Companies in Thailand

Transcript of the above video:

In this video today, we're going to be discussing real estate holding companies, so called real estate holding companies. Now to be clear, I've always been rather hesitant to discuss this topic and I'm not going to go into great detail with respect to real estate holding companies pertaining to things like houses and actual land. Suffice it to say, it is possible for a company to own land in the Kingdom of Thailand. But it should be noted that there are heavy restrictions on this especially where a foreigner is involved and there have been circumstances where various law enforcement officials have deemed that certain structures are purely for nominee purposes. For the purpose of a foreigner owning land and in some cases such structures have proven to be dissolved to the great detriment of the foreign national who was trying to utilize the structure for certain enjoyment of Thai real estate.

Not going to go any further into that specifically but I am going to discuss this in the context of Thai condominiums. Yeah it's not infrequent that you actually see a holding company set up to own Thai condominiums and this can happen for various reasons. For example, there certain perhaps tax benefits that can be garnered by a foreign national especially for example, like an American citizen rather than only certain properties in their own name, may simply own an interest in a company, maintain control of a company and then utilize the company to own various real estate assets specifically condominiums which are not restricted from foreign national ownership in the Kingdom of Thailand pursuant to the Thai Condominium Act so long as the structuring question conforms with the act and all of the formalities are maintained when transmitting the title into the company's name or the foreign national’s name.

The reason I wanted to have this video to bring this up though is because people often have some misconceptions with respect to Thai corporate entities and the most notable misconception is the fact that like they operate somewhat akin to say, a limited liability company in the United States. Limited liability companies in the United States, you form them. There are tax obligations but as far as like maintenance of various books and things like this except in some rather rare instances or a major going concern, one can have a limited liability company especially one that may own land or may own a piece of property whatever or own a piece of movable property like a car or a boat, etc. And there are various reasons for having a structure set up that way or ownership set up that way. With respect to that set up, yeah there's not a lot of maintenance of the actual company itself. Here in Thailand, the rules with respect to maintenance of things like audited financial statements, semi audited financial statements, monthly filings with respect to VAT (if the company is VAT registered), withholding tax filings, corporate income tax filings, etc.

There are quite a substantial number of various administrative details that go sort of part and parcel with a Thai company so I would urge anyone watching this video who's seriously interested in setting up a Thai company for the use of owning let's say specifically condominium in Thailand, it would probably be a good idea to conduct further due diligence, conduct further research and really understand the ins and outs of how type corporations work and in the various expenses associated therewith on a regular basis before going ahead and getting oneself into something without knowing all the details as to how it's going to operate in the future.