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

[aussieinphuket]

i cannot see how this is good for anyone.

 

we all know that DFDL would not be the only company offering these services so it would be the tip of the iceberg..

 

likely looking for some form of handout, look at the land encroachment issues all but basically died a slow death, illegal places like Trisara and La Colline and Andaman White Beach hotels all still there only some minor cases with thais.

 

not in the interest of Thailand to cause problems with foreigners here will only have ongoing repercussions and look what it will do presently to the real estate market nothing will happen for a few months while this thing boils over..

 

90 pct of villas and a much smaller percentage of condos would be owned this way if thailand changed it antiquated laws about minimum 3 directors per company and 2 must be thai and control 51 pct it wouldnt happen or maybe to a much lesser extent..

 

if they caused problems with foreigners who are clients of DFDL then there will also be much bigger problems to come for all these other law firms and accounting firms which offer this service and believe me there are many ...

 

hopefully its just a vendetta against DFDL and it will quietly disappear....

 

[BuckleUp]

On 8/17/2018 at 4:04 PM, adwbkk said:

she is your proxy

 

No, she is the owner.

Her name is on the chanote. 

I don't see how she is a proxy for anything. She bought the land outright for cash from her bank account. Back then 3 rai was 200,000 baht, small change.

House we built together, I believe we paid everything from a joint bank account. She worked as administrator for a flying school, drawing good salary.

I believe you are allowed to build and own buildings on a land owned by a Thai national, and retain ownership of the actual building. Not that that is important or applicable to us, I have no intention to digging up the house and transporting it someplace else.

My name is on the back of the chanote  for the use until death.

I see nothing but a normal marriage holding assets. 

[garyk]

1 hour ago, BuckleUp said:

Her name is on the chanote. 

I don't see how she is a proxy for anything. She bought the land outright for cash from her bank account. Back then 3 rai was 200,000 baht, small change.

House we built together, I believe we paid everything from a joint bank account. She worked as administrator for a flying school, drawing good salary.

I believe you are allowed to build and own buildings on a land owned by a Thai national, and retain ownership of the actual building. Not that that is important or applicable to us, I have no intention to digging up the house and transporting it someplace else.

My name is on the back of the chanote  for the use until death.

I see nothing but a normal marriage holding assets. 

I know a guy like you. His wife got sick very young and died. Relatives turned on him the day she died.  House gone, he tried to get all the stuff he could out of the house. Not much.

Heart breaking story. 

[pgrahmm]

35 minutes ago, garyk said:

I know a guy like you. His wife got sick very young and died. Relatives turned on him the day she died.  House gone, he tried to get all the stuff he could out of the house. Not much.

Heart breaking story. 

Yes, that does happen....

 

Had a buddy that was out house shopping.....Mentioned this to him - which his wife confirmed....The house shopping ceased.....

[mogandave]

Funny how everyone always knows someone that supports their argument.

Just sayin’...

Anyone that has a legal hold on a house that lets someone take it from them is either a fool, a chikenshit or both.

[Sydebolle]

On 8/17/2018 at 9:30 PM, rayw said:

Love your thumgnail icon Sydebnolle.  Bloody brilliant L & H   Love it ?

Reflects appropriate behaviour when in Thailand as an alien ? 

 

[janclaes47]

On 8/17/2018 at 11:05 AM, 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.

Yes this comes up every now and then, but in previous occasions it was just talk, never some major law company be raided.

 

And yes they will give you time to sell or transfer to Thai name, hopefully, but not everyone is in the possibility or willing to put the property in Thai name otherwise they would have done it from the beginning.

 

Can you imagine what will happen when thousands of properties are available in fire sale ?

 

 

[janclaes47]

3 hours ago, BuckleUp said:

I believe you are allowed to build and own buildings on a land owned by a Thai national, and retain ownership of the actual building.

Yes that is possible, but then the building license has to be issued in your name.

 

[BuckleUp]

3 hours ago, garyk said:

I know a guy like you. His wife got sick very young and died. Relatives turned on him the day she died.  House gone, he tried to get all the stuff he could out of the house. Not much.

Heart breaking story. 

That is terrible. She has a Thai will leaving everything to the kids, an Australia will leaving everything to me+kids. Plus we will add the kids to the chanote. That way land  goes to them 100%.

[xylophone]

2 hours ago, mogandave said:

Funny how everyone always knows someone that supports their argument.

Just sayin’...

Anyone that has a legal hold on a house that lets someone take it from them is either a fool, a chikenshit or both.

Anyone that has a legal hold on a house...………….

 

And that is what caught out a friend of mine here in Phuket because he had purchased his villa through a local lawyer, using the company route (aka the Thai nominee route) and thought nothing of it, as most don't or didn't.

 

He works overseas (close by) and came back to Phuket for some R&R every so often and was very surprised in his visit a couple of years or so ago to find someone looking on his door to ask him what he was doing there, because he was trespassing in this persons villa!

 

Turns out his crooked lawyer had some documents reissued at the land office (status and brown envelopes perhaps??) stating that he was the owner and he had sold the place.

 

No problem thought my friend, so he hired a lawyer to take it to court and was stalled, so hired another one and this went slowly through the court process and I asked why this was so slow when in fact it was very clear-cut – – the answer was that because it was bought through the company route, and illegally so, he had no right of ownership on the place and that was the sticking point.

 

As far as I know this was not resolved in his favour and I haven't seen him here for a couple of years, and the last time I did see him, he was not very hopeful at all, suggesting that he had lost the case.

 

Another spin on this thread...…..all it takes is a dispute of some description, and the proverbial can hit the fan!

 

[mogandave]

 

Can you imagine what will happen when thousands of properties are available in fire sale ?

 

 

 

My wife and I will buy a couple more?

[brling]

1 hour ago, mogandave said:

 

My wife and I will buy a couple more?

Yep, with your money

[mogandave]

Yep, with your money

Our money...

[garyk]

1 hour ago, mogandave said:

Our money...

 

Famous last words... haha

[mogandave]

Famous last words... haha

Famous last words indeed

[blackcab]

Let's keep this discussion on topic please. That means discussing the post, not the poster.

[Destiny1990]

6 hours ago, xylophone said:

Anyone that has a legal hold on a house...………….

 

And that is what caught out a friend of mine here in Phuket because he had purchased his villa through a local lawyer, using the company route (aka the Thai nominee route) and thought nothing of it, as most don't or didn't.

 

He works overseas (close by) and came back to Phuket for some R&R every so often and was very surprised in his visit a couple of years or so ago to find someone looking on his door to ask him what he was doing there, because he was trespassing in this persons villa!

 

Turns out his crooked lawyer had some documents reissued at the land office (status and brown envelopes perhaps??) stating that he was the owner and he had sold the place.

 

No problem thought my friend, so he hired a lawyer to take it to court and was stalled, so hired another one and this went slowly through the court process and I asked why this was so slow when in fact it was very clear-cut – – the answer was that because it was bought through the company route, and illegally so, he had no right of ownership on the place and that was the sticking point.

 

As far as I know this was not resolved in his favour and I haven't seen him here for a couple of years, and the last time I did see him, he was not very hopeful at all, suggesting that he had lost the case.

 

Another spin on this thread...…..all it takes is a dispute of some description, and the proverbial can hit the fan!

 

Interesting to see if the law firms will be held responsible for their illegal constructions? and if company homes can transform to leasehold homes and what costs will be involved in that.

[Arkady]

12 hours ago, aussieinphuket said:

90 pct of villas and a much smaller percentage of condos would be owned this way if thailand changed it antiquated laws about minimum 3 directors per company and 2 must be thai and control 51 pct it wouldnt happen or maybe to a much lesser extent..

A  Thai company only needs one director who doesn't have to be Thai.  I was the sole director of a Thai company, as a foreigner, for about 10 years.  

[balo]

I remember a few years ago my Scandinavian friends told me you can buy house her so they did , and I told them no you can't , it's the law.  No you can , by using a lawyers office , good luck with that I told them.  

I bought a nice condo 100% in my name , and followed the Thai laws,  sold it with a profit. 

 

Now I will tell them what's going on , let's see how they react to this news! 

 

 

[blackcab]

Two off topic troll posts have been removed.

[jayboy]

On 8/17/2018 at 10:57 AM, 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.

 

I doubt whether DFDL (which is a reasonable legal firm and not the kind which feeds on gullible farang) was advising clients to break the law.I expect they were advising clients on structures which were legal but sidestepped the spirit if not the letter of the law.This approach is very widely used throughout the Thai business/property world.

[moe666]

On 8/17/2018 at 1:32 PM, 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 doubt very seriously they are going after real companies, with real directors, and boards but the fly by night companies set up to avoid Thai law by owning land. To many Chinese are doing this now. The hotel were my wife worked has been recently purchased by Chinese with a Thai front man, over 200million baht. I would be willing to bet money on these are the people they will go after. As usual here the over reaction from the farang community at TV who most cannot buy a house if they wanted to

[mogandave]

I doubt very seriously they are going after real companies, with real directors, and boards but the fly by night companies set up to avoid Thai law by owning land. To many Chinese are doing this now. The hotel were my wife worked has been recently purchased by Chinese with a Thai front man, over 200million baht. I would be willing to bet money on these are the people they will go after. As usual here the over reaction from the farang community at TV who most cannot buy a house if they wanted to

Is a hotel not a legitimate business?

[twig]

"Nothing was your own except the few cubic centimetres inside your skull."

― George Orwell, 1984

 

Why owning land on any territory claimed by some armed gang ANYWHERE on this planet is just a convenient self-delusion.

 

Unlike some or even most of your property, any "real estate" you "own" anywhere is simply rented from them until you move out.

 

Easy to prove that to yourself, if you simply stop paying them rent.

 

[mogandave]

"Nothing was your own except the few cubic centimetres inside your skull."
― George Orwell, 1984
 
Why owning land on any territory claimed by some armed gang ANYWHERE on this planet is just a convenient self-delusion.
 
Unlike some or even most of your property, any "real estate" you "own" anywhere is simply rented from them until you move out.
 
Easy to prove that to yourself, if you simply stop paying them rent.
 

Why would you pay rent on something you own?

[Patriot]

20 hours ago, xylophone said:

Anyone that has a legal hold on a house...………….

 

And that is what caught out a friend of mine here in Phuket because he had purchased his villa through a local lawyer, using the company route (aka the Thai nominee route) and thought nothing of it, as most don't or didn't.

 

He works overseas (close by) and came back to Phuket for some R&R every so often and was very surprised in his visit a couple of years or so ago to find someone looking on his door to ask him what he was doing there, because he was trespassing in this persons villa!

 

Turns out his crooked lawyer had some documents reissued at the land office (status and brown envelopes perhaps??) stating that he was the owner and he had sold the place.

 

No problem thought my friend, so he hired a lawyer to take it to court and was stalled, so hired another one and this went slowly through the court process and I asked why this was so slow when in fact it was very clear-cut – – the answer was that because it was bought through the company route, and illegally so, he had no right of ownership on the place and that was the sticking point.

 

As far as I know this was not resolved in his favour and I haven't seen him here for a couple of years, and the last time I did see him, he was not very hopeful at all, suggesting that he had lost the case.

 

Another spin on this thread...…..all it takes is a dispute of some description, and the proverbial can hit the fan!

 

The lawyer wasn’t that slime- ball called Chock Chai from Rawaii was it??

[anon789561]

4 hours ago, jayboy said:

I doubt whether DFDL (which is a reasonable legal firm and not the kind which feeds on gullible farang) was advising clients to break the law.I expect they were advising clients on structures which were legal but sidestepped the spirit if not the letter of the law.This approach is very widely used throughout the Thai business/property world.

"sidestepped the spirit if not the letter of the law"

i love that description. spoken like a slippery lawyer 555

[xylophone]

54 minutes ago, Patriot said:

The lawyer wasn’t that slime- ball called Chock Chai from Rawaii was it??

Obviously I cannot confirm or deny but my friend did have his villa in that area.

[Dogmatix]

On 8/19/2018 at 8:49 AM, BuckleUp said:

 

I believe a foreigner is permitted to own the assets of the house, as in the structure and materials. The wife owns the land. 

I'm sure there are provisions under marriage laws with joint assets. Surely a husband who shares his money with his wife (money he had previously) falls way outside the provisions of corporations law and nominee directors with shell companies setup to launder funds overseas. Not even close there in any legal or practical way.

 

This is the case, if you have a new build house that has not yet applied to the amphur for a house number.  The Land Office will agree to separate the land and structure into separate chanotes.  If it is an existing house, they won't do it and they have to remain on the same chanote but with separate appraisal values for the house and land.  To get a separate chanote for the house, you have to show the land office that you have either a 30 year rental agreement or a lifetime usufruct agreement.  Basically this type of ownership was more useful when Thais mainly had wooden houses that could be moved elsewhere without too much trouble.  If the land changes hands, your rental agreement or usufruct might not be honoured or you might be harassed by the landlord.  If you have built a cement house, you are entitled to demolish it and leave the land as it was before you built it, which might give you satisfaction but won't give you somewhere to live.

 

Getting a chanote for your house is an extra layer of hassle and expense and I don't see how it offers any advantage over a 30 year lease or lifetime usufruct which you have to get first anyway, unless you have a moveable house and would be prepared to find a new location to move it to, if necessary. 

[Dogmatix]

Crocked lawyers bilking folks our of their houses is not confined to Thailand. My brother's ex sold his house after their divorce in the US, using the same lawyer that handled the divorce for her, as she thought he did a great job in getting her the house and alimony.  The lawyer transferred the entire proceeds to his own account offshore.  After she complained it turned out that the lawyer had bilked 6 other divorcees out of their houses and was arrested before he could disappear and got 6 years in prision.  The money was never recovered but the story doesn't end there as it would in Thailand.  American lawyers have to pay into funds that will compensate their clients in the event of malfeasance. After a year or two the fund reimbursed the losses of all the divorcees in full.  That is what makes Thailand different.   There is no accountability for lawyers or compensation for their bilked clients.  Basically no rule of law and police, bank managers, prosecutors and judges are all more than happy to join in the scams because they know there is no downside when dealing with cheated foreigners.