Divorce in Thailand

Dissolution of marriage is sometimes inevitable. No matter how hard couples try for their marriage to work, on certain occasions, ending it by way of a divorce can be their only choice.

The precursors of legally ending their marriage vary couple by couple and in Phuket in particular and Thailand in general, the type of divorce process that these couples prefer differs too although the end of it is just the same.

Among the likely cause of divorce in tourist-frequented places like Phuket is the clash of cultures. Expatriates married Thais or foreigners married to other foreigners with different cultural background are common in the island.

And so when a couple decides to end their marriage in Phuket, there are two processes that they will have to consider.

Divorce by Mutual Consent (Uncontested Divorce)

This type of divorce process is faster, easier and lesser in terms of costs on emotional, physical and financial terms.

All that the divorcing couple has to do are the following:

  1. Agree that they are ending their marriage through mutual consent.
  2. They place their agreement, including their terms on their properties and children if there are any, into writing and sign it. They also need at least two witnesses who must also sign the agreement.
  3. They have to register their divorce with the Amphur (Local District Office) in Phuket to make it official where the officer issues them a certificate.

But, apart from the written divorce agreement, they also need to bring with them the necessary documents in the registration of their divorce such as: photos, marriage certificate and passports.

A lawyer or lawyers is/are not really necessary with this divorce type as the process is relatively straightforward and simple that even foreigners can proceed with themselves. But a need for a lawyer’s services may arise especially on making sure that the steps are diligently followed, the supporting documents are in order and that the divorcing couple understands everything on their documents as the Thai authorities utilizes the Thai language in every government issued documents.

They may have to ask a personality to translate these documents and the application form to end their marriage through divorce and the best representation of such is a divorce lawyer in Phuket.

Divorce by Judgment (Contested Divorce)

If marrying someone with a different cultural background is one huge investment, this type of divorce requires a lot more emotional, financial and physical investment from the couple. The contested divorce is highly exhaustive as the whole process can last for several months before it can arrive on a resolution.

Additionally, issues within the marriage are constantly being brought out into open because a divorce by judgment can only be given if there are legal grounds to end it such as: adultery, desertion of a spouse and seriously disrespected the ascendants among six other grounds.

On this type of divorce, the court acts as the mediator between the two parties but in case that no agreement on matters like child custody and property custodianship then the court has to render judgment with its wisdom is to be based on the testimonies and documents of the parties.

If the court grants a divorce, it is also responsible in informing the Amphur. A divorce can only become official if and when the Amphur issues a divorce certificate.

Unlike the uncontested divorce, involving each party’s lawyers is really needed on this type of divorce process.

While any Thai-registered lawyer can handle a divorce case, a divorce lawyer from a reputable law firm is highly recommended.

Why is this so?

It is because divorce lawyers already have the necessary expertise and knowhow on handling the legal, emotional and documentary aspects of the whole process. Moreover, these lawyers from reputable law firms do have the necessary skill in translating the documents as well as in effectively communicating with their clients especially in places like Bangkok, Phuket, Chiang Mai, and Pattaya where the likelihood of foreigners being involved on a divorce proceeding is high.

Thailand Company Structures

Thailand has been through a number of coups and aggravated by unstable political situation, the country’s economic growth is greatly affected. But, according to the Government Public Relations Department, the baht is on a festive mood largely contributed by foreign investors’ trust on the economic strength of Thailand.

This growth may be attributed to the Thai government’s adoption of various initiatives through the Board of Investment. Until this day, Thailand is among the leading rice exporters in the world but manufacturing remains to be the greater contributor to the nation’s GDP. With this strong economic showing, Thailand is performing better even at the world stage.

If you are an expatriate who is planning to establish a business venture in Thailand, you need to know the types of Business Structures:

  1. Partnership – is composed of two or more persons involved in a business venture and the profit of which is distributed proportionally. Partnership can be subdivided into three general subtypes.

    • Unregistered Ordinary Partnerships – the partners are liable, in whole and jointly, of the obligations of the partnership.
    • Registered Ordinary Partnerships – the partnership becomes disconnected and unique from the individual partners as it became a legal entity if it is registered.
    • Limited Partnerships – the liability of an individual partner is limited to his contribution of the capital. Partnerships such as this must be registered.
  2. Limited Company – these are companies in which their owners have the privilege of limited liability of the debts and losses of the companies.

    Private Limited Companies

    • A company registered under this subtype is governed by the Civil and Commercial Code.
    • Requires at least three shareholders.
    • Its constitutive documents include the Memorandum of Association (Articles of Incorporation) and Articles of Association (By-laws).
    • If prescribed on the articles of incorporation or articles of association, the directors’ liability can be unlimited. Moreover, they manage the limited company as afforded by the firm’s charter and bylaws.
    • The private limited company may be wholly owned by foreign nationals but in company operations reserved for Thai nationals, the alien-owners’ participation is limited up to 49 percent only.
      Registration fee is 5,500 baht per million baht of capital.

    Public Listed Company

    • A company registered under this subtype is governed by the Public Company Act.
    • Requires at least 15 shareholders.
    • The shareholders are not allowed to sell/transfer their shares within the prescribed period of two years.
    • The board must have at least five members with Thai nationals comprise at least half of the total.
    • Is subject to comply with the prospectus, approval and other requirements, offer shares, debentures and warrants to the public and may apply for its securities be listed at the Stock Exchange of Thailand (SET).
  3. Joint Venture – is a group of persons (natural and/or juristic) entering an agreement and carry on a business together. Income from the joint venture is subject to corporate taxation (as one entity) as prescribed by the Revenue Code but the same is not yet recognized as a legal entity under the Civil and Commercial Code.

  4. Representative Office – its functions are limited in providing its head office abroad of information and non-profit (non-trading) activities:
    • Functions to search for sources of goods and services in Thailand for overseas based headquarters.
    • Checks the quality and quantity of the goods and services ordered by the overseas headquarters.
    • Gives advice to the headquarters about the ordered goods.
    • Supplies/promotes the products of the headquarters to Thai customers.
    • Reports to headquarters the economic movement of Thailand.
  5. Branch Office – is a business entity that carries out activities for its overseas based head office. These activities may be income generating and therefore, taxable under Thai laws. Essentially, it shares the same set-up with that of a limited company only that it does not have shareholders or promoters to start with being it a branch of a foreign based company.

    In legal terms, the branch office is treated as one and the same with its head office therefore, the latter will also be answerable to any violations and or liabilities that the former have incurred in Thailand.

  6. Regional Office – like the Representative Office, a Regional Office is not allowed to conduct business in Thailand. It can only start operating in Thailand if its head office has already received clearance from the Department of Business Development – Ministry of Commerce as authorized by the Foreign Business Committee.
    It functions as:

    • Development and training arm of the head office
    • Management of finances
    • Contingency for consultation and management services
    • Operates as a “forward base” for its head office by communicating, coordinating and directing the branches and affiliates in the area
    • Financial management
    • Sales promotions planning and control on markets
    • Product development
  7. Sole Proprietorship – it may be considered as the simplest of business structures on one look basing on its characteristic as a business entity owned by a sole person. That being said, it is the single owner which will be held answerable to all liabilities and incumbencies that the business will incur.

  8. Consortium – it is similar to Joint Venture only that it holds at least three distinct characteristics that sets it apart. First, a Consortium is not considered as a legal body in Thailand. Second, basing on the Revenue Code, it is also a nontaxable body. And lastly, although it is bonded by a contract between two or more bodies (business entities), each participant of the consortium remains independent from one another making them solely responsible for their individual corporate loss and gain.

Property Acquisition Options

Legally owning a property, that is registering it on freehold under your own name, perhaps gives you the most secured feeling. After all, freehold ownership provides you with the rights only afforded to property owners under this structure.

However, not all property types are allowed to be purchased, registered and owned on freehold by a foreign individual in Thailand. In fact, speaking on general sense, expatriates are barred to own land in the Kingdom and the only type of property he can own and registered on freehold is a condominium. Yet, even this is subject to certain requisites to make it legally feasible and acceptable under Thai laws.

Condos

As stated earlier, a foreigner can purchase a condominium and register under his own name a condo unit on freehold.

Aside from the immigration requisites as well as the financial aspect of condo ownership, the buyer must first see to it that foreign ownership of the whole condo building, on which a unit he is planning to buy, must not yet reach the 49% foreign-ownership cap.

For example: if it is a 100-unit condo building, foreign ownership can only make up a total of 49 units. If the expat’s purchase will make breach the cap of 49%, he will not be allowed to buy a unit.

Through a Limited Company

An expatriate like you can opt on establishing a Thai limited company for the purpose of purchasing and owning a land in Thailand. But, the company needs to be majority or 51% owned by Thais and these Thai shareholders must have the necessary financial capacity to own such shares otherwise the said Thai shareholders will be deem and be treated by law as Thai Nominees, entities prohibited under law.

If indeed your Thai limited company has been established legally, it must function accordingly and the land that will be bought through it must be owned by the company and not you.

Lease

Leasing is among the best options there is for an expat who is looking for a property to acquire and call it a home for a good time of his life in Thailand even if the land cannot be owned by the him.

Even if it is relatively easy to lease a property (you can lease a land or a building), the time is limited as the maximum lease period is 30 years.

If the expat is leasing the property for more than three (3) years then he is ought to register the said transaction at the Land Office.

Another important thing to remember with leasing a property in Thailand is that there is no such thing as 30+30+30 collective lease structure or the 90 year lease structure utilize in the Kingdom.

Some agents or firms may propose this so called long term lease period to you and in case you are being offered with it, make sure that you will decline it.

As pointed out earlier, the maximum lease period is 30 years. Although you can insert an option to renew clause in your lease contract with the property owner, the said renewal will not be automatic as it will still be a subject to another round of review and scrutiny the an official at the Land Office.