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Crackdown on foreigners using Thai nominees: DSI raid offices of law firm in Bangkok, Phuket and Samui


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2 hours ago, jvs said:

You are over reacting!!This comes around every once in awhile.If they would really go after every company set up buying houses for foreigners it would be really really big!!!

There is absolutely no way the would take your property away from you.They would give you a certain time in which you would have to sell or put in some other name.I do not believe in these panic reactions.

You acquire something by braking the law, they have every right to take it away from you. They would be mad to let you keep the proceeds of illegal actions. 

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14 minutes ago, Horace said:

This is not a law.  The Department of Business Development stated that, going forward,  if a company is investing in area restricted to Thais, the Thai shareholder must show that he or she has sufficient funds to pay for the shares he or she is buying. 

 

Directors don't have to own shares.  They don't have to invest in anything.  So what amount funds does this non-existent law require them to show?  They are not investing anything.

Incorrect terminology perhaps but the following is specific.

 

Articles on foreign ownership in Thailand………..

 

A). This from the Land Department Minister (office of)...........

 "If it is appears that the company is having foreigner as shareholder or Director or if there is a reason to believe that it is nominating the Thais to hold shares for the foreigners, the officer is to investigate income of every Thai shareholders in the legal entity by looking into their work history of what kind of work they have done and what monthly salary they earned, all of these proved by evidence.

 If the purchased is funded by loan, then loan evidence must be provided. If after the investigation, it is led to believe that the application for land ownership is circumventing the law or any individual is purchasing land to the benefit of foreigners under the Land Act 74, paragraph 2, the officer is to investigate the case in detail and report to the Land Bureau to be waiting for further advise from the Minister".

 Some more info... http://www.thailaws....business_42.htm

 

B). Link to an article in the Telegraph....

 "Expats who own land illegally in Thailand could be deported under tough new laws being drafted by the government.

 

Thai ombudsman Siracha Charoenpanij said earlier this month that he was drawing up "carrot-and-stick" legislation to protect the country from illegal foreign nominee ownership.

 

Under Thai laws, foreign nationals are not allowed to own residential land. They can, however, buy apartments so long as no more than 49 per cent of a development is owned by foreigners. They can also purchase detached villas, but while they can own the house, they cannot own the land the house is on and are only able to lease it for 30 years at a time.

 

To get around these restrictions, some have entered into complicated structures whereby a company is set up to purchase the land. A Thai national holds the majority of shares in that company, but in reality may have no financial interest in the company and may own it on behalf of the foreign buyer.

 

It is these such "nominee ownership" arrangements that the government now wants to crack down on, and Charoenpanij has also proposed a reward – of 20 per cent of the land’s value when sold – for those providing information about illegal ownership. His plans also include penalties for lawyers or consultants who advise foreign buyers on nominee structures".

 

C). 1). Unquestionably it is illegal to buy a house via a company.

 The Thailand Alien Business act is quite specific, and there is a blanket offence of circumventing land ownership laws that means anything that appears to allow foreigners to own houses is actually illegal.

 2). Be careful here because it is illegal for a company to be formed with the sole purpose of owning a property. If the company is a trading/working entity employing Thai workers, paying taxes etc then a house can be purchased, but then again the company has to also have a majority Thai ownership and these majority Thai shareholders must be able to show how much they have invested in this company and from whence the funds came.

 

This is to prevent the “Thai nominee company” illegal workaround and nominee companies are illegal...

 

http://www.thailand-lawyer.com/land_purchase.html  

 

http://www.telegraph.co.uk/finance/personalfinance/expat-money/9413075/Expats-warned-of-illegal-home-crackdown-in-Thailand.html  

 

http://www.thailandlawonline.com/66-real-estate-legal-issues/14-can-a-thai-company-be-my-nominee-for-land-acquisition  

 

http://www.thailandlawonline.com/article-older-archive/foreign-business-nominee-company-shareholder 

 

 

 

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19 minutes ago, Horace said:

I don't know how this law firm structured the companies, but using shares with different voting and economic rights is not a loophole.  Consider:

 

1.    The definition of an "alien" says nothing about voting rights or economic control.  It simply says that Thais need to hold 50+% of the shares.  If they wanted Thai shareholders to have voting rights and economic control, why didn't they draft the property law and FBA to say that Thais must have control over the company when they enacted the FBA?  They didn't.

 

2.  They expressly discussed requiring Thais to have superior economic and voting rights when the FBA was enacted 1998,  but decided not to do so because they feared it would scare off foreign investors.  To now suddenly change the law to provide that foreigners cannot have the economic and voting control, which the law has allowed for decades, is an expropriation of property.  Its not closing a loophole.  Its taking investments away from foreigners that were legal when they made them.  

 

3.  When a company is registered, its articles of association set out the economic and voting rights of the different classes of shares.  The Department of Business Development reviews the articles of association when a company it is formed and the nationality of its shareholders.  If they now change law so that companies that were approved and registered by the Department of Business Development are now illegal, the government is taking away investments from foreigners that it had approved.  How can any foreign investor ever trust the Thai government again?  And what about Thailand's obligations under bi-lateral investment treaties and the WTO?  Are they going to thumb their nose at them?

 

4.  Several Directors General of the Department of Business Development have spoke before foreign chambers of commerce saying that companies with different different classes of shares with different voting and economic rights are allowed under Thai law.  Such companies are not "Alien" (foreign) companies if foreigners have superior voting rights and economic rights.  Were they lying to entice foreign investors to invest in Thailand?

 

Putting aside these matters of principle, there is a major practical problem.  The biggest investors in Thailand are the Japanese.  The Japanese are responsible for over 50% of the investment in Thailand.  When there was talk about changing the rules that allow for different classes of shares with different voting rights and economic control, the Japanese forcefully spoke out against this proposal at a meeting of the foreign chambers of commerce following the Coup in 2014.  The Japanese Chamber was backed up by the Japanese Embassy, which said that if these changes were enacted, it would warn Japanese companies to not invest in Thailand and that many Japaneses companies already in Thailand would withdraw from Thailand.  Hundreds of thousands of Thais would lose good paying jobs.  The Thai government backed down and said it had no plans to change the rules.

 

Maybe this law firm was sloppy.  But if there is a plan to change the laws here to criminalize legal structures that are currently legal, it will be an economic catastrophe for Thailand.  Every senior Thai financial officials has acknowledged this, including Korn and Somkid.

 

We need to understand exactly what is happening here.  Did this law firm use a structure that is obviously illegal (such as having Thais sign documents acknowledging they are not real investors but are instead nominees) or is there a real change in government policy.  If its the latter, its not only contrary to international legal norms and standards of fairness, but it will also make Thailand's financial collapse in 1997 look like a small blimp compared to what will occur if these sorts of changes are made.

I agree with what the effect would be of such a law change. That said, the MOI has been making regulations specifically to land development and ownership, whereby the land department has the authority to not only confirm that a Thai company holding land is 50+% owned by Thais, but they also hold effective control over the company. 

 

From DFDL's own Thailand investment guide (section 4.5) comes this snippet;

"In recent years, the MOI has adopted a strict enforcement policy and issued a series of regulations to limit the use of Thai land-holding companies by foreign investors. Local land registry offices now require Thai shareholders to provide evidence of the funding source for capitalization of any Thai corporation with foreign shareholders (or foreign directors) engaged in land development. The local land registry office has the power to examine the shareholding of such companies to ensure that control over the company is actually being exercised by the Thai shareholders and requires evidence which proves that the source of funds is from the Thai shareholders if there is foreign shareholding (or if any directors are foreign citizens)."

2018-thailand-investment-guide

 

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3 hours ago, Happy enough said:

so this thai law firm was advising foreigners to break the law so they got raided, rightly so

now when the DSI  go through their records and investigate all the purchases, well i bet there's some farangs who used this firm who will be shitting themselves right now.

in fact anyone who has used these methods to swerve the laws should be very concerned about their 'investments' right now.

 

But maybe, just maybe, said laws are nonsense?

If a Thai person goes to Europe, he can buy a house, land and start a business for which he don't need to hire local people.

Maybe time for allowing businesses owned and run by foreigners to be able to do that?

Maybe the, to start with, a foreigner can own, say, half a Rai of land to build his house on it?

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10 minutes ago, mogandave said:

Beware of low hanging fruit...

If it was hanging so low it would have been gone by now! This was one of the first subjects discussed when I first joined TVF, The implications are huge, that is why it is only talk and no action! (small companies, used for personal ownership, not multi billion companies buying up land and setting up businesses.) 

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49 minutes ago, yellowboat said:

They always target the foreigners without ever mentioning the Thais who actually set up these things.  The xenophobia gets mind numbing .   How big a problem is this ?    It seems like another none problem being exploited for nothing more than a little lime light.   Thailand is getting very boring. 

The people running this country at this time are nationalists. This is what they believe in. They have an election to win coming up. A crackdown forcing Farang to sell all at once dropping the market would enhance their election chances. If you own a house or Thai quota condo think of the greens as Trump and  you Farang as Mexicans.

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Reading the TV news headlines is sometimes akin to reading a cheap novel about the American prohibition. It is full of 'crackdowns', which sorely underlines the fact that normally criminal activities are allowed to bimble along unmolested and then whammo, let's have a crackdown, even if it is only skimming the surface and therein is the issue, you cannot have properly implemented and sustained policing of anything if you lack one vital element, "the untouchables"

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But maybe, just maybe, said laws are nonsense?
If a Thai person goes to Europe, he can buy a house, land and start a business for which he don't need to hire local people.
Maybe time for allowing businesses owned and run by foreigners to be able to do that?
Maybe the, to start with, a foreigner can own, say, half a Rai of land to build his house on it?


What does a Thai have to do to get into Europe?
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18 minutes ago, jvs said:

So you are right and all the Frenchmen lost their properties?

First of all, I did not know anyone and so I neither see any of them afterwards, I do not believe they did lose anything, probably not.

What I wanted to say is that it cannot be done lightly and that contrary to what has been said it is not legal as a retired person for instance to buy land in the name of a fictional company. In addition, the majority of real estate agents are lawless, which does not help.

I think, however, that wealthy people who are well advised have done so in relative safety. 

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3 hours ago, Get Real said:

Another bunch of morons and gullible people that gets what they deserve. You can´t trust people telling you stories about how things work. You just have to learn to take command and search out the truth yourself before you get knee deep into the shit.

I think that is why people hire lawyers.

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1 minute ago, hansnl said:

But maybe, just maybe, said laws are nonsense?

If a Thai person goes to Europe, he can buy a house, land and start a business for which he don't need to hire local people.

Maybe time for allowing businesses owned and run by foreigners to be able to do that?

Maybe the, to start with, a foreigner can own, say, half a Rai of land to build his house on it?

well that's never gonna happen in my lifetime and i'm still only 40.

TBH i agree with the Thais stance on most of these things more than those from a lot of the west.

Christ, look at some of the Tatler type magazines here and they are full of adverts to buy up new build properties in central london. there are sales days in hotels in bkk most months and this is happening 100 fold in china and anyone else who wants to buy up London.

I believe that more than 50% of Battersea Power Station in London for example was sold off plan to Chinese 'investors'.

Whats the local professionals that earn a decent wage and still can't afford there own place supposed to do.

Rent, share or move out. Why should they? because the greedy government don't care about anyone but themselves.

I'd say here the reasons not to cash in on foreign money is probably because they don't want too many foreigners getting too comfy as they may draw unwanted attention to how it really works here and those at the top like the way it works just the way it is.

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13 minutes ago, hansnl said:

But maybe, just maybe, said laws are nonsense?

If a Thai person goes to Europe, he can buy a house, land and start a business for which he don't need to hire local people.

Maybe time for allowing businesses owned and run by foreigners to be able to do that?

Maybe the, to start with, a foreigner can own, say, half a Rai of land to build his house on it?

Very few Thai can get a visa that gets them on a plane to my home country, and many others, let alone purchase property.

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3 hours ago, Happy enough said:

so this thai law firm was advising foreigners to break the law so they got raided, rightly so

now when the DSI  go through their records and investigate all the purchases, well i bet there's some farangs who used this firm who will be shitting themselves right now.

in fact anyone who has used these methods to swerve the laws should be very concerned about their 'investments' right now.

 

This was the way for many Farangs to be able to purchase houses and bigness here in los for years,thinking they had a foolproof way around the law. Many people tried to tell them that someday it was going to bite them in the ass .Screw em ha ha 

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2 hours ago, KittenKong said:

I can introduce you to a thousand farangs who have lost everything to their Thai wives. You may be luckier, but it will only be a matter of luck.

 

'I can introduce you to a thousand farangs"

Waow! You know personally thousands of farangs, and those thousands bought properties to their Thai wives and those thousands lost everything.

Where could we buy your novel? :biggrin:

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5 minutes ago, AsiaHand said:

This was the way for many Farangs to be able to purchase houses and bigness here in los for years,thinking they had a foolproof way around the law. Many people tried to tell them that someday it was going to bite them in the ass .Screw em ha ha 

Jumping the gun a bit arn't you? Have you not noticed not One Farang has lost a house due to this loophole - ever, most likely remain that way for the foreseeable future, sorry to be the bearer of what to you is obviously bad news!  ?

Carry on renting ? 

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21 minutes ago, CGW said:

If it was hanging so low it would have been gone by now! This was one of the first subjects discussed when I first joined TVF, The implications are huge, that is why it is only talk and no action! (small companies, used for personal ownership, not multi billion companies buying up land and setting up businesses.) 

do you remember when this was?I was trying to find similar posts but no joy.

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If this country and its servants wouldn't be so paranoid in respect of dealing with foreigners, companies like the one raided, wouldn't be necessary.

But Thai rak Thai and only the foreigners' money, not his knowledge.

Unless a cave is involved...

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2 minutes ago, jvs said:

do you remember when this was?I was trying to find similar posts but no joy.

From what I can make out history over two years old doesn't seem to be available since the last big update, maybe somebody knows better?

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As usual this kind of topics attracts people who would love for other people to loose everything they own and they sound very pleased about this.

I don't know why they do this or who these people are but i think they are the real losers.

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