A trust in Thailand can be used to preserve family wealth and/or provide for specific conditions under which certain assets are distributed. Our team can help you open a trust in Thailand and understand the principles and the conditions for their management and control.
The private trust act bill is an important legislative source used for the creation of these structures in the country. At the same time, the Thai Civil and Commercial code also includes conditions for the creation of trusts.
Thai company formation and Thai trust creation can be assisted by our local team of agents upon request. In this article we highlight the main conditions for opening a trust, however, if you require more in-depth information, our team can answer your questions.
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The main conditions to open a trust in Thailand
Individuals who are looking to set up a Thai trust follow the main rules for the establishment of this structure. At a minimum, a trust includes a settlor, a trustee and one beneficiary. The relationship between the trustee and the beneficiary/beneficiaries is of a fiduciary nature.
Our team lists the main parties to a trust below:
- The settlor: the party that decides to open a trust in Thailand, individual or legal entity, which places the assets into the trust;
- The trustee: the party entrusted with the management of the assets; handles the assets according to the best interest of the beneficiaries;
- The beneficiary: one or more individuals who will receive (under certain terms or at certain dates) access to the assets placed into the trust.
Requirements for trusts in Thailand
It is worthwhile to note that a trustee cannot be a beneficiary, and a settlor cannot act as a trustee. If you want to open a trust in Thailand our team can give you more information about who can fulfil the mandatory roles.
Under Thai law, a trustee has to be a qualified person who is properly licensed by the Securities and Exchange Commission.
The powers and the responsibilities of the trustee are described under law, however, the settlor can describe these in the trust agreement. The trustee shall act in the best interests of the beneficiary/beneficiaries and cannot come into a conflict of interest with these parties.
The assets placed in the trust include onshore and offshore ones and can also include real estate.
How to open a trust in Thailand
Setting up a Thai trust involves drawing up a set of documents and complying with the statements that are submitted for this type of structure.
The trust deed is the founding document that includes all the relevant information about the trust, its structure, appointed parties, duration, types of assets, and information on the distribution of the said assets (as directed by the settlor).
The administration of the trust is overseen by the Securities and Exchange Commission. The purpose of the oversight is to ensure compliance under the relevant trust laws applicable in the country, to avoid trust mismanagement.
Individuals who choose to open a trust in Thailand could expect further tax developments on the treatment of trusts. Presently, the following could be taken into account:
- Thailand has signed more than 60 income tax treaties and income from trusts should be subject to double taxation protection. Among the signatory states are EU countries, the USA, and others;
- The transfer of immovable property is subject to a tax of 3% of the property’s value;
- The Thai personal income tax rate is progressive up to 35%.
For matters concerning trust taxation and reporting compliance you can reach out to our accountants in Thailand.
Foreign investors who want to know how they can open a company in Thailand can discuss these matters with our agents, in addition to or in lieu of those related to trust creation.
Contact us for more information about trusts in Thailand and the general process required for company formation in Thailand.