More and more often, clients and agents ask questions about the advantages of registering real estate with a BVI or Foreign Company. This type of ownership, like others, has its pros and cons.
So, BVI – (British Virgin Islands) is an offshore zone, companies registered in which can be 100% owned by foreigners.
Status – foreign person
The BVI company is in any case a foreign company with all the restrictions for foreign persons regarding the ownership of real estate. A company can own an apartment in a condominium (in a foreign quota) or a building (under a sales contract). Unlike a Thai company, it cannot own a land plot.
Maintenance cost
The cost of registering a company and maintaining it can in many cases be more expensive than maintaining a Thai company and definitely more expensive than the registration of the real estate in the ownership of an individual.
Documents when making a deal
When buying real estate by the BVI company, the land department must provide the company’s documents, the director’s data, the minutes of the meeting of shareholders translated into Thai (when buying for an individual – only a passport). And also when buying an apartment in a condominium – confirmation of the transfer of funds from abroad (Credit Advise / TT3)
Possibility of selling a company with real estate
The owner (shareholder) of the company can sell real estate by selling shares of the BVI company (as well as the Thai company for which the land plot is registered). In this case, there will be no transfer of ownership from one person to another, which means there will be no taxes and fees in the land department.
Property rental income tax (income received from Thailand)
Option 1
The company conducts business in Thailand through an agent, representative or intermediary. For example, if a real estate agent leases it to a tenant, generating income for the BVI company.
In this case, the BVI company will report income tax in the same manner as a Thai company, that is, it is necessary to file a balance sheet of income and expenses in Thailand and pay income tax.
Option-2
The company conducts business in Thailand through an agent, representative or intermediary. For example, if a real estate agent leases it to a tenant, generating income for the BVI company.
In this case, all income received by the company is subject to 15% withholding tax – Thailand and the BVI have not signed an agreement to avoid double taxation. The renter is responsible for paying the tax. The tax is not refundable.
Property For Sale
If the BVI company still decides to transfer ownership to the buyer, then the amount of money received in excess of the amount transferred from abroad will be considered the company’s profit.
Inheritance
The inheritance of real estate is carried out by inheriting the shares of the company. Which could be much easier for heirs who do not plan to come to Thailand. The other benefit is that the heirs will not pay inheritance tax on real estate in Thailand although they are now the new owner of the property through the company they owned.
