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

[Horace]

47 minutes ago, adwbkk said:

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.

 

No idea where this purported general principle of law is coming from (cite?), but there is no "circumvention" of a law if you are complying with a law. 

 

Thai law expressly defines Alien companies by foreign majority share ownership. These laws expressly do not refer to control or economic benefit.  Indeed, the government considered including a reference to control and economic benefit several times, but decided against doing so.  Since the law does not refer to control or economic benefit and the government expressly decided several times against including control on benefit in the definition of an Alien company, how can foreign control or economic benefit make a Thai majority owned company "Alien"?  

 

If the law was intended to restrict foreign controlled companies from owning land or engaging in activities restricted under the FBA, the relevant laws should have been drafted so that the definition of an Alien includes control and economic benefit.  They do not.  Moreover, the issue of control and economic benefit has now been considered several times, and rejected several times.  

 

If economic benefit and control are added to definition at this point, the economic interests of foreigners are being expropriated.  If the Thai government does not compensate foreigners for this expropriation, it tells investors that they cannot expect the Thai government to act fairly and protect their interests.  The Japanese certainly understand this,.  

 

 

[wabothai]

When you want to invest in Thailand be aware of the thousands of vultures circling above you.

[thailand49]

Wonder why of all the Law firms providing this type of service this particular one?

They rub someone wrong missed their tea money payment etc.

 

[xylophone]

17 minutes ago, Horace said:

 

No idea where this purported general principle of law is coming from (cite?), but there is no "circumvention" of a law if you are complying with a law. 

 

Thai law expressly defines Alien companies by foreign majority share ownership. These laws expressly do not refer to control or economic benefit.  Indeed, the government considered including a reference to control and economic benefit several times, but decided against doing so.  Since the law does not refer to control or economic benefit and the government expressly decided several times against including control on benefit in the definition of an Alien company, how can foreign control or economic benefit make a Thai majority owned company "Alien"?  

 

If the law was intended to restrict foreign controlled companies from owning land or engaging in activities restricted under the FBA, the relevant laws should have been drafted so that the definition of an Alien includes control and economic benefit.  They do not.  Moreover, the issue of control and economic benefit has now been considered several times, and rejected several times.  

 

If economic benefit and control are added to definition at this point, the economic interests of foreigners are being expropriated.  If the Thai government does not compensate foreigners for this expropriation, it tells investors that they cannot expect the Thai government to act fairly and protect their interests.  The Japanese certainly understand this,.  

 

 

Horace: Signing a document saying you are holding shares on behalf of a foreigner to make a company appear Thai is no brainer.  That is obviously an illegal nominee relationship.  

 

You yourself stated the above, so you are saying that there are such things as illegal nominee relationships, and that's all that I and others are saying with regards to setting up a company whose specific purpose is to acquire a property and land. 

 

This without any investment by the Thai shareholders, without any return on their investment, without hiring the required amount of Thai workers or by producing an income (i.e. a working company), so it becomes obvious it is a sham.

 

Irrespective of your assertion that the arguments regarding this are "circular" and that there are contradictions in the law, the fact is that if one sets up a company this way, it is deemed illegal, and no amount of arguing this in a court of law here in Thailand will make any difference whatsoever.

 

 

[watso63]

A lottely is an investment, but if I lose my stake I tly again. Never lisk what you can't walk away flom?

[xylophone]

4 hours ago, xylophone said:

"I had a farm in Africa".

Perhaps the significance of my post has been lost in the myriad of other posts.

 

Many years ago Zimbabwe seized back white owned farms, this despite the fact that rumours had been around for many years prior to this that it was going to happen, but the arguments came thick and fast from the white owners that the white owned farms were responsible for producing a great deal of the country's produce, and if seizure were to happen, then that would fail, so this would never happen............but it did and no compensation was paid, it was done and dusted (although some compensation is being looked at now some 18 years later).

 

Sound familiar? And if that were not enough, South Africa is doing exactly the same now.

 

What constantly amazes me is that posters will say that this clampdown on Thai nominee companies couldn't happen because of this, or couldn't happen because of that, and very often quote tax or revenue being lost from the foreign contingent if this were to happen, but I do believe these folks are deceiving themselves.

 

If Thailand can lose billions of baht through corrupt rice deals, spend millions if not billions on submarines and other equipment which it doesn't need, and generally overlook corruption on a vast scale which means that money which should end up in the coffers does not, do folks really think that they give a hoot about some farangs crying about their lost "investment" when in fact it was illegal in the first place?

 

This military government can do anything they want, as have other governments here and that won't change.

 

[baansgr]

1 hour 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.

Crack down on the underhanded  visas. Hhmmm. That goes all the way up the food chain. I believe immigration want to recruit more staff,  not dismiss 95% of them

[dunroaming]

6 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!!!

Yes this comes up every now and then and has been doing for the last twenty years to my knowledge.  Just make sure you have your own lawyer (not a friend of your wife ?) and that he is "well connected".  You may have to grease a palm or two at some point but that is easy to budget for.

[stud858]

3 minutes ago, xylophone said:

Perhaps the significance of my post has been lost in the myriad of other posts.

 

Many years ago Zimbabwe seized back white owned farms, this despite the fact that rumours had been around for many years prior to this that it was going to happen, but the arguments came thick and fast from the white owners that the white owned farms were responsible for producing a great deal of the country's produce, and if seizure were to happen, then that would fail, so this would never happen............but it did and no compensation was paid, it was done and dusted (although some compensation is being looked at now some 18 years later).

 

Sound familiar? And if that were not enough, South Africa is doing exactly the same now.

 

What constantly amazes me is that posters will say that this clampdown on Thai nominee companies couldn't happen because of this, or couldn't happen because of that, and very often quote tax or revenue being lost from the foreign contingent if this were to happen, but I do believe these folks are deceiving themselves.

 

If Thailand can lose billions of baht through corrupt rice deals, spend millions if not billions on submarines and other equipment which it doesn't need, and generally overlook corruption on a vast scale which means that money which should end up in the coffers does not, do folks really think that they give a hoot about some farangs crying about their lost "investment" when in fact it was illegal in the first place?

 

This military government can do anything they want, as have other governments here and that won't change.

 

I Agree with you. Though,  thankfully also the Falang in Thailand is looked after because of the tourism industry being mega important.  So problems not so likely to occur such property dispossession. 

[Tchooptip]

4 hours ago, Get Real said:

That´s a great idea! With that said, you must of course find one that you know that you can trust, right?

Squaring the circle! 

[parryhandy]

I wonder if this is connected to the Phuket boat tragedy.

[Sir Dude]

26 minutes ago, baansgr said:

Crack down on the underhanded  visas. Hhmmm. That goes all the way up the food chain. I believe immigration want to recruit more staff,  not dismiss 95% of them

It won't be the staff...it'll be the the people that have used the "unofficial" service...i.e foreigners with one year visas they can't officially qualify for. 

[wvavin]

It takes them a long time to realize this.

[DrTuner]

As long as they don't piss off their new Chinese masters, sod the farangs, now's the time to pull the plug on the very well known nominee house ownership companies. Do a funky 44 thing to gift the houses owned by the illegal structures to government stoogies and good days, yeah. Nobody want 'em farangs here anymore.

[baansgr]

39 minutes ago, Sir Dude said:

It won't be the staff...it'll be the the people that have used the "unofficial" service...i.e foreigners with one year visas they can't officially qualify for. 

And how will they be caught? If the visa has been authorised and issued by the immigration office who could tell the difference. 

[Dogmatix]

I wonder how they picked this particular law firm from the hundreds of them have set up nominee structures over the past decades.

 

 

[Dogmatix]

When the Panama papers revealed a number of senior civil servants, military and police who had established offshore companies to hide money stolen from the Thai taxpayer, often using nominees, the government decided to brush it under the carpet.

 

[Gulfsailor]

1 hour ago, Horace said:

 

No idea where this purported general principle of law is coming from (cite?), but there is no "circumvention" of a law if you are complying with a law. 

 

The approach of interpreting law can be seen in the Thai Civil and Commercial Code (TCCC) under Article 4 para 1 which provides that 'the law must be applied in all cases with the letter or the spirit of any of its provisions.' This indicates that the literal and purposive techniques are permitted for use in interpreting codes or written law. It is questionable whether the letter should be considered first, or have to be considered together with the purpose of the law. Both literal and purposive approaches have to be used together because the text itself is ambiguous and it needs to be considered in the context, and also look beyond the text to find the purpose of the law. One should consider the letter and the spirit of law together in order to interpret the law and if the outcome of both approaches is different, the meaning of purposive approach is more important than the meaning of the text itself.

 

So it's legally possible for the Thai government to allow foreign controlled Thai majority companies to operate in Thailand, while at the same time crack down on companies set up solely or predominantly to own property and which are controlled by foreigners, as this goes against the purpose of the law that foreigners cannot own land. 

 

[Dogmatix]

A thorny question will be the issue of foreigners using their Thai wives as nominees, which has already been hinted at as being a criminal activity in the case of the ship that sunk full of Chinese tourists.  The Chinese owner used his Thai wife as a nominee.  The problem here is that the Civil and Commercial Code regards all assets after marriage as common conjugal property.  Therefore it should be difficult for a Thai court to determine that a Thai wife was used as her husband's nominee, if she invested cash that was common conjugal property in the business, rather than the husband's money.  My guess is that they will never go after Thai spouses acting as nominees, as there is no easy way to prove a crime has been committed.  

 

Anyway the government is supposed to be freeing up the service sector for 100% foreign ownership in the Foreign Business Act.  That would only leave companies used to buy land in the lurch which has become difficult to do, since the Interior Ministry's letter to land offices in 2006 ordering them to investigate any company trying to buy land that had any hint of foreign involvement in it whatsoever.

[snoop1130]

Phuket law office raided over nominee land deals for foreigners

By The Phuket News

 

Raids on the law offices in Phuket and Samui were to obtain evidence of Thais being used to transfer money for foreigners buying and selling land, houses and villas. Photo: DSI

 

PHUKET:-- Officers from the Department of Special Investigation (DSI) and Thailand’s Board of Investment (BoI) raided a legal consultancy in Phuket on Wednesday (Aug 15) on suspicion of using nominee shareholders and breach of the Foreign Business Act by transacting land transfers.

 

The office, located in Soi Bangtao 1 in Cherng Talay, was the Phuket branch of DFDL, which promotes itself as “Unique value propositions and innovative solutions… DFDL specializes in regional legal, tax and investment advisory expertise focused on South and Southeast Asia.”

 

The company’s websites notes it has offices in Cambodia, Laos, Vietnam, Bangladesh and Cambodia.

Full Story: https://www.thephuketnews.com/phuket-law-office-raided-over-nominee-land-deals-for-foreigners-68291.php#c84OkqKo2CVfhbAO.97

 

-- © Copyright Phuket News 2018-8-17

[impulse]

3 hours ago, Peterw42 said:

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.

 

Ownership isn't the issue.  Control of the land is the issue.  The foreigner may only own 49% of the stock in the company, but if that allows him to control the land, he's still hooped.  That's how nominees and proxy ownership work.

 

BTW, you one a percentage of those patents.  Based on your percentage ownership of Apple stock.  Maybe one millionth of one percent?

[billd766]

3 hours ago, Peterw42 said:

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.

 

 

Apple is a public company and anybody with the money can buy or sell shares.

 

A nominee company in Thailand set up to own land and property is not a public company and you cannot buy shares in it.

[bipper]

Funny how they targeted one firm when they're all at it! No need to say more.

[NCC1701A]

"Crackdown crackdown whatcha gonna do, whatcha gonna do when they come for you ?

[jgarbo]

9 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.

How exactly does one "take command"? What rank is required? General, Admiral? 

Where is the "truth"? Or does only a "commander" recognize it? 

[NCC1701A]

I heard a rumor that some neighborhoods in Hua Hin are being surrounded by troops right now and everyone is being put into "Farang's who think they own land" camps. 

[ed strong]

When i was attempting to purchase a house in Hua Hin, i was advised by a local English guy who suggested it to make the Thai company and split 47% and 53 % as it was likely in the future as land becomes more expensive that the authorities will make a clamp down and that will search for companies with the standard blag of 49 % and 51% split.

(I didn't do this but might be good advise)

 

Unfortunately i never got to own the house as it all cascaded when i found the company that had been set up with a Thai lady as the 51% holder and the other 49% was not me but other of her family members!

 

 

[garyk]

3 hours ago, xylophone said:

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.

Could not agree more. 100% agree.

[Polaky]

If the law firm has used a loophole in the judicial system then they have nothing to worry about, It is probably all above board and legal, they just have to prove that no law was broken and they will be home free, and the bonus will be free advertising for their office, and a boom in business.  

[Peterw42]

7 minutes ago, garyk said:

Could not agree more. 100% agree.

I agree 49% and my Thai nominee agrees the other 51%