Medical Bytes Number 96, What Could Go Wrong with a Limited Company in Thailand? Everything!

The following is a regular opinion column by Doc Martyn. His statements and opinions are entirely his own.

1. To start afresh, Ken, not his real name, brought his New Zealand wife and their child to Thailand. Using a Thai limited company, he purchased a family home and 6 investment properties, spending over THB 110 million.

Most Thai girls are gorgeous. All was well until Ken’s eyes began to wander. His focus changed.

His wife returned to New Zealand with their son.

Ken and his new Thai girlfriend, with whom he has a child, live in a de facto relationship,

2. Ken’s home was part of an estate. The developer of the estate was charging excessive water fees so Ken, using heavy machinery, drilled a bore on his block. His neighbour, the estate developer, sued him for damages to the estate caused by the heavy machinery.

3. For many years it has been illegal to establish a Thai company for the sole purpose of purchasing land and/or property. By using a proxy company, Ken had breached Thai law. Ken’s situation was brought to the attention of the DCI, who determined that Ken’s purchase was unlawful. A criminal case was raised against him. Further, because his purchase was unlawful, he did not own his home. The developer then changed his pending legal action against Ken to a claim for ‘criminal damages to the estate’.

4. ‘Hell, hath no fury…’ Ken received a summons from New Zealand. His former wife had applied for a divorce and she was suing him for THB 110 million. Without the consent of his estranged wife, Ken had already sold 2 of the 7 properties. This is misappropriation of matrimonial funds, a criminal offence.

If successful, the criminal damage and misappropriation charges will place Ken in prison for a minimum of two years, after which he will be deported for breaching Thailand’s company legislation.

5. Ken’s experiences aside, there are many other pitfalls associated with using proxy companies to purchase property. These include:

-The Farang owns 49% of the shares in the company, Thais own 51%. The Farang has no control over the company, and the property does not belong to him/her.

-The Farang buys the property but has no proof of purchase.

-If one of the Thai shareholders dies, his family will be entitled to a proportion of the 51% share, leaving the Farang powerless and open to ransom.

-If the Farang’s wife dies prematurely, her family is entitled to make a claim on the estate. The share to the Farang will depend on the number of people in her family. If there are 3 other family members, the property may be split 4 ways.

-The wife and/or her family can raise money from a ‘loan shark’, using the Chenote as security. If the loan is not repaid, whether or not you have a usufruct +/- a memorandum of agreement, the ‘loan shark’ can register the loan on the Chenote at the Lands Office. If the property does not sell, the property will be claimed by the ‘loan shark’.

6. For about THB38,000, around the country, unscrupulous lawyers have been establishing proxy companies for unsuspecting Farangs. This is illegal. There is no method to circumnavigate Thai law. Farangs cannot own land in Thailand. When the proxy company is found to be illegal, it is the Farang who will pay the penalty, not the lawyer(s).

7. On February 7th 2023 the Thai government amended the Corporations Act. Now, a limited company must be actively trading and tax returns for the directors of the company must be submitted annually.

Proxy companies are now dead in the water.

If you have a proxy company you need to change your situation immediately. Find yourself a reputable lawyer (yes, I know that is an oxymoron!) to manage your vulnerable situation, or PM Doc Martyn on Facebook and I will place you in the hands of ethical people who will help you.

8. “Limited company to buy property, what could possibly go wrong?” Everything!

Mr. Adam Judd is the Co-owner of TPN Media since December 2017. He is originally from Washington D.C., America, but has also lived in Dallas, Sarasota, and Portsmouth. His background is in retail sales, HR, and operations management, and has written about news and Thailand for many years. He has lived in Pattaya for over nine years as a full-time resident, is well known locally and been visiting the country as a regular visitor for over a decade. His full contact information, including office contact information, can be found on our Contact Us page below. Stories please e-mail About Us: Contact Us: