Weather in Phuket
Recent Changes to Thai Law which affect Property Buyers and Owners
Legal Matters: June - August 2008“I have heard that the minimum number of shareholders in a Thai Company has been reduced from seven to three, is this true?”
Effective from 1st July 2008, section 1237 of the Civil and Commercial
Code (No. 18) BE 2551 (A.D 2008) will be amended so that the minimum number
of shareholders in a Thai company will be reduced from seven to three.
This change will be of considerable benefit to foreign investors who must
now only find two genuine Thai co-investors with whom to set up a Thai
company, rather than six in addition to their own foreign shareholding.
(Desmond Hughes, Partner)
“I own shares in a Thai company which has seven shareholders some of whom have expressed a wish to sell their shares. Can existing shareholders acquire their shares so that there are fewer than seven shareholders in the company?”
Existing Thai companies with seven or more shareholders will be able to
restructure the company and reduce the number of shareholders to at least
three shareholders as from 1st July 2008. The requirement that Thai shareholders
are a majority in number and also own a majority of the shares in a Thai
Company remains unchanged. Your lawyer should check that any proposed restructuring
of the Thai company is compliant with Thai law prior to registering the
new shareholders list with the Ministry of Commerce.
(Kris Limcharoen, Partner)
“How will the recent changes to land transfer registration fees and taxes affect property transactions?”
As a measure to stimulate the real estate market in Thailand, the Interior
Ministry has reduced the land registration fees and taxes from 2 percent
to 0.01 percent. The reduced fees will be applicable to land and building
transfers, condominium unit transfers, the registration of buildings as
condominiums and the registration of mortgages. The reduced fees and taxes
became effective on 29th March 2008. Investors should note that the reduced
land transfer registration fees and taxes do not apply to the registration
of leases or the transfer of land which has no buildings or structures
built upon the land. Investors should ask their lawyers to check the terms
of their agreement with the seller or developer to calculate what the new
registration fees and taxes will be.
(Desmond Hughes, Partner)
“I recently bought a luxury condominium unit off-plan. How will the changes to registration fees affect me?”
The reduced land transfer registration fees and taxes shall be effective
for a period of one year from 25th March 2008. Investors who have bought “off-plan” (i.e.
property to be constructed in the future) whose property is not scheduled
to complete until after 25th March 2009 may not benefit from the reduced
fees. The time period to which the reduced fees and taxes apply may or
may not be extended for a further period by the Interior Ministry. Off-Plan
buyers should ask their lawyers to check the terms of their agreement with
the developer to assess when, contractually, registration of the transfer
of the property is scheduled to take place and also contact the developer
to ensure that there are no anticipated delays to the proposed registration
date.
(Kris Limcharoen, Partner)
“Are there any other proposed or new laws coming into effect?”
There are also adjustments to the Condominium Act, a new Escrow Act and
a series of other proposed changes to the Foreign Business Act which are
at present, aimed at encouraging and stimulating investment.
(Desmond Hughes, Partner)
This article is one in a series of articles for Exclusive Homes and was co-written by Desmond Hughes (Partner) and Kris Limcharoen (Partner) based in the Phuket, and Bangkok offices of Belmont Limcharoen respectively and now with an office in Koh Samui.
Information supplied by:
Limcharoen Hughes Glanville (Phuket)
T: +66 (0) 7634 2882-4 F: +66 (0) 7634 2885
E: Phuket@Limcharoen.com
Limcharoen Hughes Glanville (Bangkok)
Tel: +66 (0) 2635 5071-3 Fax: +66 (0) 2635 5074
E: Bangkok@Limcharoen.com
Limcharoen Hughes Glanville (Samui) Co., Ltd
T: +66 (0) 7724 6185 - 7 F: +66 (0) 7724 6188
E: Samui@Limcharoen.com
Limcharoen Hughes Glanville (Ho Chi Minh City)
T: +84 938 8469021 E: HoChiMinhCity@Limcharoen.com
www.limcharoen.com
