Recently, clients and agents have increasingly been asking about the advantages and specifics of purchasing real estate through a company registered in the BVI (British Virgin Islands). This ownership structure has both pros and cons that should be carefully considered.
What is a BVI company?
A BVI company is an offshore entity registered in the British Virgin Islands. It can be 100% foreign-owned, and under Thai law it is treated as a foreign entity.
Legal status and property ownership
A BVI company is considered a foreign entity and is subject to the same restrictions as foreign individuals in Thailand.
The company may own:
– a condominium unit (within the foreign ownership quota)
– a building under a sale and purchase agreement
However, a BVI company cannot own land in Thailand.
Cost of maintaining a BVI company
The registration and maintenance of a BVI company are generally more expensive than maintaining a Thai company.
Administrative and support costs for such a structure significantly exceed the costs of registering property under an individual’s name.
Required documents for a transaction
To register a real estate transaction in the Land Department under a BVI company, the following documents are required:
– Company incorporation documents
– Passport details of the company director
– Shareholders’ resolution translated into Thai
– For condominium purchases: proof of funds transferred from abroad (Credit Advice / TT3)
For an individual buyer, only a passport is required.
Selling property through the sale of the company
Instead of selling the property itself, the owner may sell the shares of the BVI company.
In this case, the ownership of the property does not formally transfer, so taxes and fees at the Land Department are not triggered.
This method is convenient and often used for tax optimization when selling property.
Taxation of rental income
Option 1
If the company conducts business activities in Thailand through an agent or intermediary (for example, an agent rents out the property), the company must file corporate tax returns and pay tax in Thailand similarly to a Thai company.
Option 2
If the company does not conduct business directly, the income is subject to a 15% withholding tax.
This tax is withheld by the tenant and is not refundable, as there is no Double Taxation Agreement between Thailand and the BVI.
Sale of property
If a BVI company sells the property directly, the profit from the sale (the amount exceeding the initial investment) is treated as corporate income and taxed accordingly.
Inheritance
Inheritance of property held through a BVI company is carried out via the transfer of shares in the company.
This approach may be more convenient for heirs who do not plan to travel to Thailand.
In this case, heirs do not pay inheritance tax on the property in Thailand.
Author: Alexandra Agapitova.
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