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

[garyk]

24 minutes ago, NCC1701A said:

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. 

Funny but it could happen for sure. I stopped in a store to buy a few things when out in the country around Hua Hin and i commented on the nice homes in an edition. First thing out of the Thai's mouth was that is a Euro community, no Thai's... I asked a few questions and the guy told me it was all Farang homes in the gated community. One swoop of the wand, and that could be a Thai community. Kinda scary for sure.

 

Edited August 17, 2018 by garyk

[AdamTheFarang]

9 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.

Am I right they revoke land titles if granted under a "false" application. Then why not a house? Both therefore stay in Thai ownership with no foreign claim on it. Isn't this what Thailand prefers?  

[Get Real]

33 minutes ago, jgarbo said:

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

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

Is the comment above a big joke, or did you really understand that small of what I wrote?

[Media1]

11 hours ago, stanleycoin said:

Oh no,  here it comes.

Quick sell the house now. 

 

It's a joke really just racism in a 3rd world country 

[Sydebolle]

Less caucasians (aka alien) every year and a sluggish real estate disaster, except possibly lower Sukhumvit and Chaophraya river in Bangkok. Well done! 

[Media1]

8 minutes ago, Sydebolle said:

Less caucasians (aka alien) every year and a sluggish real estate disaster, except possibly lower Sukhumvit and Chaophraya river in Bangkok. Well done! 

Precisely there doing great work lol

[rayw]

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

[Dogmatix]

1 hour ago, ed strong said:

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!

 

 

This was completely uninformed advice.  Prior to 2006 the guideline for the Land Department was to send any application for land transfer to a company owned more than 40% by foreigners to the Director General for investigation of possible Thai nominee involvement.  This was taken literally and it was OK to reduce foreign shareholding below 40% before the transfer and back up to 49% immediately afterwards.  From 2006 the guideline to Land Offices has been for them to investigate any application for land transfer to a company where foreigners hold even one share, are directors, senior management or appear to have any involvement in the company whatsoever.  You can read this guideline in a letter sent from the Interior Ministry to Land Offices in 2006 and follow up letters tightening it up further.  Some applications to transfer land have been rejected by land officers even when no foreigners appeared to be involved in the company but a Thai director and major shareholder was unable to give a convincing explanation as to why he had started a new company and invested the company's entire capital plus taken on debt to buy a residential property in a tourist resort.   It was rightly assumed that this type of application was a front for a foreign buyer, even if no foreigner was visible.  

 

Given this type of scrutiny that has been going on for the past 12 years, did that English guy really believe that moving the to a 47/53% was going to help anyone? If they really decide to do a crackdown and the military government orders the Commerce Ministry to cooperate with the Land Department, any company owning land with any foreign shareholders or directors is going to be a sitting duck.  The safest approach would be to resign from the board and transfer all shares to Thai names.  By that point you will probably be quite safe because you will have donated the property to the nominees and will have nothing more to worry about. 

Edited August 17, 2018 by Dogmatix

[Delight]

 From what I read the DSI(Department for Special Investigations) has limited success overall.

However the DSI will have to pursue this case through the courts -or not.

Either way the outcome could well  set the future standards.

Should be interesting-or worrying

[BestB]

Loopholes or not, what is worrisome is that junta is doing anything and everything possible to make things harder, one way or another, which basically means, no matter what you are doing you could be breaking the law one way or another. 

 

And even if you have not yet, you can not rule out the possibility that they will change the law or twist the law and make it illegal.

 

Keep in mind, they have not raided a small 1 man law firm, but went for the big one, smaller ones could be next on the hit list.

 

In my opinion, this should be ringing alarm bells for many people, even the ones who think all their affairs are in order, because once again, what is legal today, could be illegal tomorrow.

 

To make matters worse, unlike in most other civilized countries, you would normally get fined for administrative problems, where is in Thailand, you get arrested and go through the entire legal process as if you were a drug dealer or killed someone. In fact if you were a drug dealer or killed someone bail is less.

 

[hanuman2543]

10 hours ago, theguyfromanotherforum said:

"I own a house in Thailand."

And what's wrong with that? It is totally legal

[BestB]

4 minutes ago, hanuman2543 said:

And what's wrong with that? It is totally legal

Actually it is not, a shelf company owns a house for sole purpose of owning the house.

Company set up, unless married is also somewhat questionable when 51 % thai shareholders are either employees of accounting or law firm who set up the company. or their friends and are somewhat not really real shareholders.

[Dogmatix]

12 minutes ago, BestB said:

Loopholes or not, what is worrisome is that junta is doing anything and everything possible to make things harder, one way or another, which basically means, no matter what you are doing you could be breaking the law one way or another. 

 

And even if you have not yet, you can not rule out the possibility that they will change the law or twist the law and make it illegal.

 

Keep in mind, they have not raided a small 1 man law firm, but went for the big one, smaller ones could be next on the hit list.

 

In my opinion, this should be ringing alarm bells for many people, even the ones who think all their affairs are in order, because once again, what is legal today, could be illegal tomorrow.

 

To make matters worse, unlike in most other civilized countries, you would normally get fined for administrative problems, where is in Thailand, you get arrested and go through the entire legal process as if you were a drug dealer or killed someone. In fact if you were a drug dealer or killed someone bail is less.

 

 

Bear in mind that the bugbear seems to be Chinese businessmen using nominees to run businesses related to the vast number of Chinese tourists which they know how to service and Thai Chinese don't.  Of course many are using Thai wives as nominees or have bought Thai ID cards via corrupt district office officials and will be more difficult to catch.   The official mantra is that it is for the safety of Chinese tourists but the real reason is jealously of Thai Chinese businessmen at the success of their mainland cousins. It is ludicrous to assert that Thai Chinese would operate safer businesses or be less greedy and obnoxious than Chinese Chinese.  

 

I fully expect that the whole thing will fizzle out after they have shaken down some Chinese businessmen and law firm owners until enough cash rattled out of them.   I doubt they will go after the farang owned villas with infinity pools but anything is possible.  The previous military government went on a rant about foreigners owning all the beach front land in Thailand and lots of the agricultural land but weren't in power long enough to do anything about it.  Later a study was conducted into foreign ownership of agricultural land and the surprising conclusion was that there was no land owned by foreigners despite the large tracts already owned by Chinese Chinese at that time.  This time around there have been no rants about foreign ownership of land, only Chinese business owners.  One day it could happen though. 

[jvs]

8 minutes ago, BestB said:

Actually it is not, a shelf company owns a house for sole purpose of owning the house.

Company set up, unless married is also somewhat questionable when 51 % thai shareholders are either employees of accounting or law firm who set up the company. or their friends and are somewhat not really real shareholders.

You are wrong,you are confusing a house with land.

[Dogmatix]

9 minutes ago, BestB said:

Actually it is not, a shelf company owns a house for sole purpose of owning the house.

Company set up, unless married is also somewhat questionable when 51 % thai shareholders are either employees of accounting or law firm who set up the company. or their friends and are somewhat not really real shareholders.

 

Another issue is that the foreigners who have used companies to purchase land in this way usually get the accounts done by some one recommended by whoever sold it to them and provided the nominees.  The companies tend to have no operating income, even if they receive rent because rental income is not considered operating income. The companies are thus inactive companies that can be struck off after a certain period of time, if the BDC should ever decide to enforce the law.  In addition the auditors will normally protect themselves by qualifying the accounts which is  red flag that something is wrong.  The farang owners are blissfully unaware because they can't read Thai and they are not given a translation of the auditor's comments that are filed with the accounts.  Don't ask me how I know this.  

[BestB]

19 minutes ago, jvs said:

You are wrong,you are confusing a house with land.

Fairly safe to assume previous poster was referring to owning the land on which house is built on. ?

[tomacht8]

Looking forward to the view of the skyline and all the unfinished construction projects in Bangkok, Phuket and Samui. With this measure, many projects under construction, will certainly fail from financing and investors, and then these beautiful concrete ruins will be seen everywhere. 

[BestB]

19 minutes ago, tomacht8 said:

Looking forward to the view of the skyline and all the unfinished construction projects in Bangkok, Phuket and Samui. With this measure, many projects under construction, will certainly fail from financing and investors, and then these beautiful concrete ruins will be seen everywhere. 

There is nothing wrong foreigner owning a condo at the moment 

[tomacht8]

10 minutes ago, BestB said:

There is nothing wrong foreigner owning a condo at the moment 

True, or you can legally rent land for 30 years.
 

[hanuman2543]

1 hour ago, BestB said:

Actually it is not, a shelf company owns a house for sole purpose of owning the house.

Company set up, unless married is also somewhat questionable when 51 % thai shareholders are either employees of accounting or law firm who set up the company. or their friends and are somewhat not really real shareholders.

The company is needed for owning the land, not the house. You can easily build and own a house on land you leased for 30 years. You should read up on houseownership in Thailand to update your knowledge.

[ukrules]

I'd like to see something like a 'reciprocity proclamation' declared whereby all Thai people are banned from buying property in foreign countries.

 

Owning a house in Thailand should be as simple as it is for a Thai to own a house in other countries.

 

This has nothing to do with immigration. You can own and manage buildings in pretty much any country in the world through lawyers / rental agencies. Not in Thailand though.

 

Thailand is apparently special in some way, or so they would like to think.

 

The fact that they (Thai Government) have been getting away with this for such a long time shows how slack the other governments of the world have been on the subject of reciprocity.

 

Edited August 17, 2018 by ukrules

[Curmudgeon1]

16 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.

I agree. It would be really big. So big in fact it would ruin the real estate market for years. 

You can assume that the majority of thai corporation property sales are nominee. If they were forced to sell, the market would be flooded driving prices down for all real estate. It would take years for the market to recover. I'm not suggesting a few percentage points.... more like 1/2 plus.... that would further jeopardize finance qualifying for existing mortgages as the building losses collateral value..... WHAT A NIGHTMARE.... Thailand would be set back a decade or more.imo

[observer90210]

Where is the satisfaction to glee on the plight in the misfortune of others ?

[ukrules]

10 minutes ago, Curmudgeon1 said:

I agree. It would be really big. So big in fact it would ruin the real estate market for years. 

You can assume that the majority of thai corporation property sales are nominee. If they were forced to sell, the market would be flooded driving prices down for all real estate. It would take years for the market to recover. I'm not suggesting a few percentage points.... more like 1/2 plus.... that would further jeopardize finance qualifying for existing mortgages as the building losses collateral value..... WHAT A NIGHTMARE.... Thailand would be set back a decade or more.imo

They are arrogant enough to do somehing like this, I look forward to this day.

Edited August 17, 2018 by ukrules

[seaninkorat]

17 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.

GET REAL - you are talking bull cr*p. The entire point of having professional persons, is that you MAY presume them to be knowledgeable law abiding, and not in conspiracy with bent cops etc. That is the entire point of their existence. It should not be necessary to vet professional persons you instruct to represent you. They are bound by the rulings of the governing bodies that certify their professionalism. Lawyers Conduct Committe/Lawyers Council etc. Government Agencies are obliged to crack down and seek justice for the so called 'gullible' victims. The victims have instructed professionals in good faith - they are not to be blamed or insulted by persons who are blasé about the endemic corruption in Thailand, because they may or may not know how to negotiate the minefield. The place is rotten: M*FIA INC. - Play your part in fixing it. Your attitude is part of the problem, not part of the solution.

[Curmudgeon1]

16 hours ago, Horace said:

The problem is that the law is hopelessly muddled in this area.  I would be careful about blaming the law firm until we have more facts  Signing a document saying your are holding shares on behalf of a foreigner to make a company appear Thai is no brainer.  That is obviously an illegal nominee relationship.  

 

But what if different categories of shares have different voting rights and different economic rights?  The definition of an "Alien" in the FBA, which was enacted in 1998 to replace a military decree (called NEC 281) from the early 1970s, specifically excludes any reference to control or economic rights. A company can still be "Thai" even if there is foreign control and the shares held by foreigner have superior economic rights. 

 

There was debate over this issue in 1998, and it was decided that foreign control or giving the shares held by a foreign company superior economic rights, would not make the company an Alien (non-Thai) company) because making this sort of change to NEC 218 would jeopardize foreign investment in Thailand.  Following the 2006 Coup, there was another attempt to introduce these features into the definition into an Alien company, and it was rejected for the same reason.  And again following the 2014 Coup, there was a third attempt to do this and it was again rejected for the same reason.  

 

To change the definition of an Alien company now after the Thai government has maintained that control and economic rights don't matter in determining if a company is Thai, would essentially result in an expropriation of foreign ownership rights.  The Japanese raised this issue when this issue was raised in 2014, and that was thought to end the issue.

 

Section 36 of the FBA criminalizes the use of an illegal nominee, but short of signing document saying you are nominee holding shares on behalf of a foreigner, the definition is hopelessly muddled.  What Section 36 seems to be saying is that if a Thai holds shares in trust for a foreigner that Thai is a nominee.  Problem is that Thai law does not recognize trusts unless there is a specific Thai law providing for the creation of trusts (there is one for public companies, but not for purposes of determining if a nominee relationship exists).  In other words, Thai law does not generally include the concept (trust) necessary for a clear definition of a nominee.  

 

No idea what the law firm did here, but if the Thai government starts to say a nominee relationship exists because foreigners can control or have superior economic rights over a company, it will result in the expropriation of foreign intevestments in tens of thousands of companies, including large Japanese investments.

 

Best compromise is to simply reduce the list of restricted business to those that are really essential to Thai national security.  On land, allow limited foreign ownership in resort areas where foreigners already have effective control of much of the property.  Allow the free market to set prices.  Don't criminalize structures that are legal under the current definition of alien ownership.

 

Otherwise, Thailand is wading into economically dangerous territory that raises all sorts of issues about the security  of foreign investments, expropriation claims.  If the rules are changed to force foreigners to divest control of businesses they established, that is an expropriation of foreign investments.  This not good for business and creates the impression that no investment in Thailand is safe from a change in the rules.  This is not good for the Thai economy.

"This is not good for the Thai economy."....Yah think?

I believe the real estate market would crash, bank losses would jeopardize their existence, and the dominoes would fall. 

[Curmudgeon1]

12 minutes ago, seaninkorat said:

GET REAL - you are talking bull cr*p. The entire point of having professional persons, is that you MAY presume them to be knowledgeable law abiding, and not in conspiracy with bent cops etc. That is the entire point of their existence. It should not be necessary to vet professional persons you instruct to represent you. They are bound by the rulings of the governing bodies that certify their professionalism. Lawyers Conduct Committe/Lawyers Council etc. Government Agencies are obliged to crack down and seek justice for the so called 'gullible' victims. The victims have instructed professionals in good faith - they are not to be blamed or insulted by persons who are blasé about the endemic corruption in Thailand, because they may or may not know how to negotiate the minefield. The place is rotten: M*FIA INC. - Play your part in fixing it. Your attitude is part of the problem, not part of the solution.

I agree.   He's  jealous and likely hasn't the means to purchase property. 

[MyFriend You]

soooooo  wonder why they skipped Pattaya???

[MyFriend You]

15 pages and counting, a lot of people worried???  The crap house lawyers are out in full force showing how their illegally bought house is legal.

[bristolgeoff]

many have brought houses or land thru this way.they must have known now  for years.closing this one as well now.

   my friend brought a house in cm not in his name the girlfriend only. if they come down on this  she can not afford to pay the mortage  either.but i imagine many in the same  boat 

Edited August 17, 2018 by bristolgeoff