Ownership Structure
Direct ownership of freehold property by foreign national is not possible in Thailand. Ownership is achieved by a perpetually, renewable lease on your unique subdivided land and villa plot which offers the lessee full control over the freehold ownership rights, effectively equivalent to freehold ownership. The lease title can be used for mortgage purposes to secure bank borrowing.
Ownership Structure The benefits of leasehold ownership are:
- There are no costs for setting up a Thai company and submitting the annual company audit therefore saving costs and increasing the yield.
- Villas in Cool Blue Samui are likely to be rented out. If you had freehold ownership all rental income would have to go to the Thai limited company which would attract tax at a rate of 30%. Any UK dividends would also be subject to tax at 20%. By taking advantage of Thai tax laws, tax on rental income should be limited to 15% of gross rental income. If you lease the property you will usually be able to onward sell the lease with no capital gains tax, dependent on your own residency status.
- To onward sell a Thai limited company, you need to have very good audit records and will need to employ a top name accountant. Without this, the new buyer cannot be confident about the company which could result in difficulties selling it (and the property).
- You cannot lose ownership of the property under a lease but you could lose ownership of a Thai limited company unless it is run properly (this has already happened to some people). The lease can always be converted to freehold…so there is no risk.
- The lease renewals add infinitum, not just for 90 years.
- The buyer can later sell the lease offshore or a new lease can be created (90 years) and sold on.
- It is much harder to forfeit ownership of a lease than a Thai limited company (along with all your investment).
- Our lease is relatively simple, cost effective, tax efficient and financially safe.
