It refers to a limited liability company in Thailand that exists for the sole purpose of owning property (land) in Thailand rather than for the purpose of a business. Note that a business purpose and a business activity (trading at least on paper) by the company is required under Thai law. A limited companies formed merely as a vehicle to own land on behalf of a foreigner is as a structure void because its purpose is to circumvent laws prohibiting foreign land ownership (section 150 civil and commercial code) and illegal under land laws because of its intention of land holding on behalf of a foreigner section 113 land code act.
Costs: yearly accounting starting at 8.000 baht each year (offices aiming theirs services at foreigners could easily ask double this amount or more). Costs for the formation of a limited company starts at 12.000 baht with the smaller local law and accounting offices, and up to approx 100.000 baht (more or less) with the foreign run and managed law offices.
A Thai land holding company, when it is on behalf of a foreigner, is a majority Thai owned limited company (usually with Thai straw men as shareholders) that owns and controls real estate property on behalf of a foreigner. The foreigner who is himself not allowed to own land, will hold up to 49% of the shares in the land holding company (section 97 land laws).
Normally the foreigner will hold control and management in such company through preference shares, but he is also through the dummy Thai shareholder structure legally considered the actual owner and the Thai shareholders have no claim to the company nor its assets. This land holding company structure for foreign investors is considered illegal.
Answered 4 years ago
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Q&A land laws in Thailand
Common questions about real estate, land ownership laws...