Summary of land trust (management-type)
- Registration of land
- By transferring the land title under the name of the trust company, it would prevent any encumbrances on the land when undertaking the development business and it would be possible to undertake stable business by barring any compulsory action against the trust assets.
- Fund management
When undertaking the fund management through the trust account, it would have far more
strength against the debts of applicable business of the contractor and the third party
debts compared to have the fund management done by other business entity that it would
be possible to secure the trust of clients and purchasers of realty sales with the stable
collection of loan credit and clear fund management.
- Management of development right
The trust company is transferred with the authorization of the development business to
enter into the contract for business right management and sales contract that the stable
edvelopment busines scheme can be maintained until the business is completed.
Strengths of land trust (management-type)
- Enhancement of business stability
Establish a stable business scheme between the parties by having the trust
company with the mutual trust and public trust to set forth the trust contract under
the stipulation of grantors and a construction company in a way of sharing the roles
for business management and company in a way of sharing the roles for business
management and undertake the position of contractor until the completion of the
- Individual accounting management following the land trust business
Since the relations with other businesses of the contractor is cut off through the
change of the main body of the business, the risks of provisional garnishment on
credit and others on the business site and sales income that may be factors on
fund operation and management and recovery of loan credit may be hedged in
- Improvement of possible realty sales
The trust company becomes the party to the sales contract that it may display
stable business scheme to the clients and purchasers and it may improve the rate
of sales effectively thereto.
- Prevention of business delay
Prevention of business delay / It may prevent the personal delay, violation of
regulations, or unjust conduct from its origin as well as prevent the delay in
completion or tenancy or others due to the unexpected dispute between the
construction company and contractor in advance (register for conserving the
name of the trust company) and enjoy the practical authority of interested party.
- Acquisition tax, registration tax and non-taxation of company
Acquisition tax, registration tax and non-taxation of company / Even if the business site is modified under the name of the trust company by applying the non-taxable
income for acquisition registration for the formal title under Article 110 and Article 128 under the local Tax Act that there will be no separate
- Possible for advance sales on commercial realty
Under the implementation of the “Act on Realty Sales of Buildings and Improvements”, the advance sales of commercial realty would be available for the following cases
Therefore, the management-type land trust business would enable advance sales on commercial realty and stable cash flow.
- i)Entering into trust contract and agency work contract with the trust company
- ii)Use of guaranteed insurance product
- iii)Possible only when jointly guarantee by two construction companies after completing 2/3 of frame work
Business structure and work procedure
- Business structure Chart
- work procedure Chart
between Client and
between Client and
construction of land
(or business plan approval)
Land trust contract
Major contents on business agreement
- Procurement of business fund
- Unless otherwise having separate stipulation, all funds required in a business is procured under the name of the grantors and the construction company would cooperate to this matter.
- Disposition of taxes and dues
- Taxes and dues imposed in accordance with the business undertaking and various payments resulted from business related permits and licenses are paid by the grantor in accordance