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

[Delight]

 When they crack down on farang ownership of apartments in condos -via the company route-that will be the time to panic.

The building trade will panic the most.

 

[badjoke]

3 hours ago, BuckleUp said:

All our investments here are safely in my wife's name, who is 100% Thai. Well as safe as can be, with the politics and all...

 

If I had a choice I would feel safer in a company name

[brucec64]

It's not over reacting to take this seriously. I only ever bought condos for this very reason, using a company to buy property that you live in is illegal. i know of quite a few people who have inactive companies that they bought the houses on and simply pay some accounting each year. It is not legal for a foreigner to own land, simple as that. So, if you are one of those people then now is the time to act and protect your investment money. I think it is very dangerous to assume that you will be given time to put it right, if they catch you then they can deal with you. As you are not entitled to own Thai land they can legally take your property and there will nothing you can do. So, what you call panic I call sensible reaction.
 
My fear is what this will do to the expat community and retirees in Thailand. It will have a huge impact on the property market if all the houses owned under a foreign company with thai nominees were to have to sell up and get their cash out asap, I can see nothing but terrible news for the economy in general., but that won't stop the Thai authorities from doing it anyway.
 
 

I would not be (and am not) concerned about action against existing real estate owned in the "grey area". It is literally a 7 to 10 year legal process before the government could potentially take the property, and each house/condo/business is an individual case. This would require too much effort by the Thais. They will do as they always do - make a large gesture such as this to give the appearance that something is being done. They may tighten things up, but it would have to happen at the source, and the Land Office may not be willing to give up this source of income. Of course there is a risk in owning property through a nominee, but this risk is generally built into the asset price, with foreign owned condos selling at a premium to thai ownership.

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[adwbkk]

3 hours ago, BuckleUp said:

All our investments here are safely in my wife's name, who is 100% Thai. Well as safe as can be, with the politics and all...

 

she is your proxy

 

No, she is the owner.

[stanleycoin]

Just remember this.

If anything was to change and they did start coming for people.

The Lawyers and the like,  will a 100% grass you up and blame you for everything and they will get the backing to do it, just to save there own skins.

your all be screwed.

But reckon if they ever do anything, 

it may  just take the form of an extra tax for you all. 

 

 

[joecoolfrog]

4 hours ago, BuckleUp said:

All our investments here are safely in my wife's name, who is 100% Thai. Well as safe as can be, with the politics and all...

 

Why anybody would gamble all their investments on the whim of a woman is beyond me !

[CGW]

IMO, one day they will block this loophole, probably far into the future? The main reason I think they will do something is simply because they lose a lot in taxation when a property is sold, or to be specific a company is sold that includes a house. When selling a company there is no taxation - or very little, anyone who has sold a property knows that taxes are high & depend on how long you have owned that property.

[garyk]

Does anyone know of a case where the Gov. has enforced the law and taken away a place from a foreigner?

I have never heard of it happening even though  it is talked about allot.

 

[stud858]

2 minutes ago, CGW said:

IMO, one day they will block this loophole, probably far into the future? The main reason I think they will do something is simply because they lose a lot in taxation when a property is sold, or to be specific a company is sold that includes a house. When selling a company there is no taxation - or very little, anyone who has sold a property knows that taxes are high & depend on how long you have owned that property.

That's interesting.  I thought the transfer taxes would be the same? 

Is there a website with the rates?

I've seen the official wording on period of holding,  but not company holding. 

[transam]

3 minutes ago, garyk said:

Does anyone know of a case where the Gov. has enforced the law and taken away a place from a foreigner?

I have never heard of it happening even though  it is talked about allot.

 

I don't think they would talk about it....?

[midasthailand]

Wonder if this would be a good thread to ask if anyone knows of a reputable Thai Taxation lawyer/Accountant in Bangkok?  If you use one and are happy with the service received please pass me their details.

 

I hope that whatever happens, foreigners who purchased homes in their business names do not lose out!

 

Thanks 

[Peterw42]

The foreigner does not own land, he owns 49% of a company that owns land, I am a shareholder in Apple, doesn't mean I own the patents for an iphone.

 

[adwbkk]

2 hours 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, i........

 

4.  Several Directors General .........

 

Putting aside these matters of principle, t.........

 

Maybe this law firm was sloppy.  But i................

 

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.

It is my understanding that a general principle of law is that any device which is designed to circumvent an existing law is itself illegal.  To my simple mind, that means that if you bought a company so that you could own a house then that is illegal.

[CGW]

6 minutes ago, garyk said:

Does anyone know of a case where the Gov. has enforced the law and taken away a place from a foreigner?

I have never heard of it happening even though  it is talked about allot.

I will stick my neck out ? _ Never happened, if anyone knows different I will be proven wrong! ?

4 minutes ago, stud858 said:

Is there a website with the rates?

Your selling a company and its assets = no rates, I can't remember what I paid last time for a transfer, it was either 4 or 8k Baht,

I sold another house and the buyer didn't want it in a company name (his girlfriend didn't to be exact!) that was over 300k in taxes!

[jesimps]

5 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.

Quite right. This scare rears its ugly head every couple of years. Doesn't affect me, I put mine in the wife's name ?

[xylophone]

2 hours ago, CGW said:

Have you not noticed not One Farang has lost a house due to this loophole - ever

Wrong...…….read an earlier post of mine.

 

If there are any disputes with a property "bought" this way, then the farang stands to lose it when found out.

[stud858]

2 minutes ago, CGW said:

I will stick my neck out ? _ Never happened, if anyone knows different I will be proven wrong! ?

Your selling a company and its assets = no rates, I can't remember what I paid last time for a transfer, it was either 4 or 8k Baht,

I sold another house and the buyer didn't want it in a company name (his girlfriend didn't to be exact!) that was over 300k in taxes!

Oh right. Yes,  nice one.  Company name on title.  Of course.  I get it now. Thanks. 

So when sold, you probably can recover the yearly company taxes,  by the money you save on title transfer. Sweet.

[CGW]

1 hour ago, Happy enough said:

but the firm that got raided in the OP was a law firm.

Worth noting that it was a "foreign" owned company - not that it would make any difference to the bastions of law & order in Thailand though 

[Peterw42]

6 minutes ago, midasthailand said:

Wonder if this would be a good thread to ask if anyone knows of a reputable Thai Taxation lawyer/Accountant in Bangkok?  If you use one and are happy with the service received please pass me their details.

 

I hope that whatever happens, foreigners who purchased homes in their business names do not lose out!

 

Thanks 

The foreigners dont have businesses, they have non trading shelf companies. There are 2 things wrong, a non trading company and foreigners indirectly owning land.The Gov doesnt like Thais owning property through non trading companies as they miss out on tax .

[xylophone]

2 hours ago, Destiny1990 said:

I think that is why people hire lawyers.

Problem being that in the main it was lawyers who promoted and set up the nominee structures!!!

[Seeall]

34 minutes ago, adwbkk said:

she is your proxy

 

No, she is the owner.

I see what yourself and the guys say proxy are about!  Most cases when wife takes into her name a form is signed by the Faramg stating its her funds and the Farang has nothing to do with it....  Then the Land office is happy and yes its really hers...

[hotchilli]

5 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.

Having to sell your home or put it into someone else's name would cause me panic !!!

And who said they couldn't take your home/property or investments away from you if they were purchased fraudulently?

Remember TIT and they make the rules!

Glad I didn't use their services!

 

[Sir Dude]

Anyone ignoring the old adage of "Only spend or bring over here what you can throw away and lose" is not in tune with things here. Money/assets have a nasty habit of disappearing for whatever reason. How many cautionary tales have we all heard and seen? My house is not my house...it's my wife's house and I can walk away from it all and move on if must be, but it does make me smirk when I hear the "It's my house" stuff come out of a foreigner's mouth. I work here and have a WP plus only bring into the country chunk-change and interest from my home country to make life more comfortable. This business thing that so many do trying to be a wise guy is, and has been, low hanging fruit for a while now. Wait till they crack down on the under-the-table one year visas from Pattaya...those guys will be sweating next. The junta (and many Thais support it) are cracking down left, right and center on lots of things as they don't want the Thailand that everyone knows and loved from before. They have a plan to totally re-image Thailand from what it was, one thing at a time, and the future basically includes the Chinese in all areas like tourism, infrastructure, business and even the military. Hell, most of the elite here are half Chinese anyhow.

[marqus12]

Smells like Kristallnacht  

[stud858]

5 minutes ago, Sir Dude said:

Anyone ignoring the old adage of "Only spend or bring over here what you can throw away and lose" is not in tune with things here. Money/assets have a nasty habit of disappearing for whatever reason. How many cautionary tales have we all heard and seen? My house is not my house...it's my wife's house and I can walk away from it all and move on if must be, but it does make me smirk when I hear the "It's my house" stuff come out of a foreigner's mouth. I work here and have a WP plus only bring into the country chunk-change and interest from my home country to make life more comfortable. This business thing that so many do trying to be a wise guy is, and has been, low hanging fruit for a while now. Wait till they crack down on the under-the-table one year visas from Pattaya...those guys will be sweating next. The junta (and many Thais support it) are cracking down left, right and center on lots of things as they don't want the Thailand that everyone knows and loved from before. They have a plan to totally re-image Thailand from what it was one thing at a time and the future basically includes the Chinese in all areas like tourism, infrastructure, business and even the military. Hell, most of the elite here are half Chinese anyhow.

You're right.  No one can say they own their home.  After all,  all ownership is theft on the basic principles talked about by Marx.

[anon789561]

22 minutes ago, CGW said:

Worth noting that it was a "foreign" owned company - not that it would make any difference to the bastions of law & order in Thailand though 

don't know the company and didn't see it as mentioned as thai owned just that they were questioning a thai guy so assumed it was thai

[midasthailand]

22 minutes ago, Peterw42 said:

The foreigners dont have businesses, they have non trading shelf companies. There are 2 things wrong, a non trading company and foreigners indirectly owning land.The Gov doesnt like Thais owning property through non trading companies as they miss out on tax .

Well, not wanting to argue, but I own my own BOI company here in Thailand, haven't really given much though to buying a house but if I did, I would check with a reputable lawyer first.

[xylophone]

5 hours ago, NickJ said:

Yeah, All the guys who could never afford a house here will be spewing how stupid it is for farangs to buy homes here. 

A strange comment which could also reflect on the fact that those who could/can afford to buy a house thru the nominee route (like me for example) don't, because it is against the law, so rent and stay free of worries and free to come and go as they please...……with no house to sell/unload and all that entails.

 

No spewing...…..just content to know they have done the right thing.

[Delight]

38 minutes ago, CGW said:

IMO, one day they will block this loophole, probably far into the future? The main reason I think they will do something is simply because they lose a lot in taxation when a property is sold, or to be specific a company is sold that includes a house. When selling a company there is no taxation - or very little, anyone who has sold a property knows that taxes are high & depend on how long you have owned that property.

 What you say is valid.

However -any foreigner who brings in funds and buys a house or  condo cannot repatriate these funds when the house /property is sold. Unless the transfer is outside Thailand

Thai authorities are pleased with this arrangement.

 

[Sprigger]

5 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.

Me thinks you are trying to convince yourself, I see a property grab coming more lining of the corrupt Thai pockets. This is Thailand anyone who invests here is crazy ?. Vacation only and even that’s dying a slow death. The place is like Pattaya beach all washed up.