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

[xylophone]

11 minutes ago, Horace said:

 

If you sign a document saying you are a nominee, and the law criminalizes nominees, then of course you have violated the law.

 

But this does not allow someone to add provisions to the law that doesn't exist, such as foreign control or economic benefit, to make a company an Alien that is disqualified under the Land Act from owning land or under the FBA from conducting business in various areas.

 

When these laws were enacted and several times after they discussed, debated and considered adding these conditions (which are excluded from the law as written), and decided against adding these conditions.  If they can put them back in now because its convenient to do so, take property from foreigners who relied on the law as it was written, Thai law is meaningless.

 

In other words, the law does not mean what it says.  It means what I want it to say.  This is like something out of Alice-in-Wonderland.  Its unfair and it will scare the crap out of prospective investors.

Be that as it may, but as has been stated many times...……

 

Farangs "buying a house and land" through setting up a Thai nominee company whose specific purpose is to acquire a property and land is illegal...………….. 

 

There is no argument about this and it is stated on the websites of many Thai legal entities.

[monkfish]

If there is a crack down it will start in Phuket because most of the land is owned by nominee and thats a problem which has to be solved. So i expect many 5 star hotels will be closing soon.

[Happy Time Thai]

Just another brick in the wall....Laws need to be changed.  Some of those horrible law benders unload millions of dollars into thailand every day. Watch for the "oh yeah didn't think of that" effect come into play in way of a "fine" or limit to the way operations are conducted. Shuah. Never mind, next. To much moolah.

Yah ting, nah.

[jvs]

42 minutes ago, smotherb said:

And is that time given to sell based on wishful thinking or specific knowledge?  

Please read post number 93,i do not know how to copy it here.

[smotherb]

3 minutes ago, jvs said:

Please read post number 93,i do not know how to copy it here.

Thank you. So, according to Thai Land Law a six months minimum to sell. Hopefully the foreigner has potential buyers who are not aware of his selling time limit.

[transam]

7 minutes ago, jvs said:

Please read post number 93,i do not know how to copy it here.

 

[Cranky]

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.

Gotta love blind faith.  In Thailand.  Really ?  I'd be completely relaxed in the knowledge my home is actually owned by total strangers, in an illegal structure, that are under investigation by Plod and his team of honest cohorts.  

 

What could possibly go wrong?

[Destiny1990]

9 minutes ago, smotherb said:

Thank you. So, according to Thai Land Law a six months minimum to sell. Hopefully the foreigner has potential buyers who are not aware of his selling time limit.

Who will buy it?

maybe they can put it in a thai name and then enjoy it for a 30 years lease and then it belongs to that thai.

[smotherb]

5 minutes ago, Destiny1990 said:

Who will buy it?

maybe they can put it in a thai name and then enjoy it for a 30 years lease and then it belongs to that thai.

Yes, or maybe the tooth fairy will come. The point is, if it is known you have to sell, what price and what benefits can you leverage?

[Dogmatix]

2 hours ago, Father Fintan Stack said:

Problem is, those days will come to an end eventually in an ever more conservative and middle class Thailand. You'd be an complete idiot to assume that nominee companies will never be looked at in the future. They most certainly will and that time will come, as it has with other laws that were ignored because they were inconvenient. 

 

My guess would be that some time in the future the FBA annexes will be revised to exclude all or most service sectors. At the same time they will toughen up the definitions to make companies that are effectively controlled by foreigners as foreign, as is already the case in special sector laws such as the Telecoms Act. This could be done without a foreign investor backlash because they would then only be protecting the annex 1and 2 sectors which would be less of an issue. Then the way will be open for a crackdown on nominee structures. 

[JLCrab]

12 minutes ago, Dogmatix said:

My guess would be that some time in the future the FBA annexes will be revised to exclude all or most service sectors

Yes -- you will have to hire 4 Thai lawyers or 4 Thai accountants for every working farang lawyer or accountant.

[Destiny1990]

1 hour ago, smotherb said:

Yes, or maybe the tooth fairy will come. The point is, if it is known you have to sell, what price and what benefits can you leverage?

Another foreigner can’t even buy it anymore and Thais rarely buy secondhand houses..

[BernieOnTour]

On 8/17/2018 at 5:57 AM, Happy enough said:

well i bet there's some farangs who used this firm who will be shitting themselves right now.

I wouldn't be sure about the farangs - not unlikely that a lot of the customers of this firm were PRC Chinese.

[BernieOnTour]

1 hour ago, Father Fintan Stack said:

they fear foreign ownership as it implies colonisation. It is drummed into them since birth, and it is even in the Thai national anthem.

If you look across the border and check, what's happening in Sihanoukville, it seems to me, they are spot on with this implication!

 

... however, nowadays the main threat isn't coming from the farang.

[anon789561]

4 minutes ago, BernieOnTour said:

I wouldn't be sure about the farangs - not unlikely that a lot of the customers of this firm were PRC Chinese.

well probably and farangs. lets just leave it at foreigners then. i really think nothing will come of it bar this few day thread on TVF and the law firm getting a fine and carry on as normal

[Horace]

23 hours ago, xylophone said:

Be that as it may, but as has been stated many times...……

 

Farangs "buying a house and land" through setting up a Thai nominee company whose specific purpose is to acquire a property and land is illegal...………….. 

 

There is no argument about this and it is stated on the websites of many Thai legal entities.

 

Oh well, if its stated on many websites, it must be true.  I forgot that "there is no argument" if its been posted on a website somewhere.   

 

But looking at this in mature and serious fashion, this, of course, still does not tell us what a nominee is, and that is the crux of the problem.  The only thing we can say for sure is that a company is not using an illegal nominee structure simply because the shares held by foreigners have superior economic and voting rights.  That definition was considered and rejected when these laws were enacted.  That change to the definition of a nominee was also rejected several times after these laws were enacted when Coup governments tried to revise the law by closing what they initially claimed was a "loophole".  The government was forced to concede that this feature of the definition of an Alien was not a loophole.  

 

Claiming that a company is using an "illegal nominee structure" begs the question of what constitutes an illegal nominee structure.  It is certainly not an illegal nominee structure simply because the shares held by a foreigner have superior voting and economic rights.  That issue was settled when these laws were enacted, and when Coup governments (its always military governments that want to do this) have tried to change the definition, they have been forced to admit a company is not using an illegal nominee structure simply because the shares held by foreigners have superior voting and economic rights.

 

Yup there is a law saying that the use of nominees is illegal, but that begs the question because there is no coherent and clear definition of what constitutes a nominee.  This remains as clear as mud.

[JLCrab]

From this link:

 

https://www.samuiforsale.com/other-miscellaneous/nominee-thai-shareholders.html

There is currently no clear definition of what constitutes a Thai nominee shareholders ...

Under present laws and regulations the indication for a nominee shareholder lies primarily in the source of the capital investment and the financial credibility of the Thai national shareholders when forming the Thai company or when transferring land to a company (often at the discretion of the officials involved).

[Horace]

38 minutes ago, JLCrab said:

There is currently no clear definition of what constitutes a Thai nominee shareholders ...

Under present laws and regulations the indication for a nominee shareholder lies primarily in the source of the capital investment and the financial credibility of the Thai national shareholders when forming the Thai company or when transferring land to a company (often at the discretion of the officials involved).

The first sentence of that quote is exactly right.

 

But there is no law providing that the "source of the capital investment and the financial credibility of the Thai national shareholders when forming the Thai company or when transferring land to a company" determines if the Thai shareholder is a nominee.  This is a practice adopted by the Dept of Bus Development (and perhaps other authorities) when trying to determine if there is an illegal nominee relationship.  In the absence of any clear definition, I guess it's the best they can do.  But it illustrates a serious problem with Thai law.

 

It also raises a big question.  Why would a law firm like DFDL set up structures where the Thai shareholders could not show the source of the funds or financial credibility?

 

Or did they just piss off the wrong person?  Some might remember that True filed charges against DTAC alleging it used illegal nominees.  That was just a business strategy to try to cripple a competitor.  

 

Here, no idea what is really going on.  

[ed strong]

On 8/17/2018 at 9:55 PM, Dogmatix said:

did that English guy really believe that moving the to a 47/53% was going to help anyone?

No not really it was just a loose suggestion and that it makes no difference if you own 49 % or 42 % and it might give you more time to resign from the board if perhaps they investigated the 49% holders first (of course i have no idea how they will react and im sure we'll all be bundled in the same category but better to just lose the house then to end in further trouble for so obviously trying to circumvent Thai law.

 

I work as a trader and you these schemes are totally sketchy and in my business anything along these lines would be totally avoided as its only time before it comes crashing down.

 

Most people would never break a law in Thailand but all seem happy to do it when purchasing a house. strange.

[xylophone]

1 hour ago, Horace said:

Oh well, if its stated on many websites, it must be true.  I forgot that "there is no argument" if its been posted on a website somewhere.   

Now now...………..totally unnecessary!

 

I could sum your argument up in a sentence:- "the law may be an ass as regards this point, but this is Thailand and it will be enforced if they want it to be, according to their definition of a nominee, not what you believe".

[JLCrab]

32 minutes ago, Horace said:

It also raises a big question.  Why would a law firm like DFDL set up structures where the Thai shareholders could not show the source of the funds or financial credibility?

Beats me -- maybe they thought no one would bother to notice.

[smotherb]

3 hours ago, Destiny1990 said:

Another foreigner can’t even buy it anymore and Thais rarely buy secondhand houses..

Not sure of your point. I am in agreement there would not be much of a market; hence my comment to which you made this post. I said, " Yes, or maybe the tooth fairy will come. The point is, if it is known you have to sell, what price and what benefits can you leverage? " and my post before that did not say a foreigner would buy it. What I said was, "Hopefully the foreigner has potential buyers who are not aware of his selling time limit." The foreigner, being the one who owns the house illegally. 

[Destiny1990]

17 hours ago, smotherb said:

Not sure of your point. I am in agreement there would not be much of a market; hence my comment to which you made this post. I said, " Yes, or maybe the tooth fairy will come. The point is, if it is known you have to sell, what price and what benefits can you leverage? " and my post before that did not say a foreigner would buy it. What I said was, "Hopefully the foreigner has potential buyers who are not aware of his selling time limit." The foreigner, being the one who owns the house illegally. 

U feel their houses needs

 

17 hours ago, ed strong said:

No not really it was just a loose suggestion and that it makes no difference if you own 49 % or 42 % and it might give you more time to resign from the board if perhaps they investigated the 49% holders first (of course i have no idea how they will react and im sure we'll all be bundled in the same category but better to just lose the house then to end in further trouble for so obviously trying to circumvent Thai law.

 

I work as a trader and you these schemes are totally sketchy and in my business anything along these lines would be totally avoided as its only time before it comes crashing down.

 

Most people would never break a law in Thailand but all seem happy to do it when purchasing a house. strange.

hopefully they ban all company ownership of land&houses and introduce longer lease terms.

[BestB]

2 minutes ago, Destiny1990 said:

U feel their houses needs

 

hopefully they ban all company ownership of land&houses and introduce longer lease terms.

 

Hopefully they grow a brain and allow foreign land ownership but limit it to either brand new developments or certain price brackets

[smotherb]

49 minutes ago, Destiny1990 said:

U feel their houses needs

 

hopefully they ban all company ownership of land&houses and introduce longer lease terms.

 

Still do not see you rationale for responding to my post.

[mogandave]

It is worth noting that anything you read in English is only a translation and is for reference only.

The laws are written in Thai, and it could well be that when read in Thai, that which is unclear in English becomes clear...

[Destiny1990]

1 hour ago, smotherb said:

Still do not see you rationale for responding to my post.

We don’t differ much.

These company structures openly pushed by lawyers is annoying they should be hold accountable first why their solutions that they have set up are very far from within the law.

 

[Japhrodisiac]

The question many should be asking is, 'why only this firm'? Maybe just the start of things and maybe they are being targeted for a reason

[BuckleUp]

On 8/17/2018 at 4:17 PM, joecoolfrog said:

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

Married almost 10 years, 2 kids 1 1/2, 7 and 8, house in Melbourne, house here. Not sure what whims you're talking about, we have a strong relationship, always have. Both in our 40s, the days of whims are long past.

[BuckleUp]

On 8/17/2018 at 2:42 PM, luk AJ said:

You are in the same boat, you think your solution is safe? If your wife cannot prove she earned the money and there are traces leading to you as the provider of the money, the violation is IMO the same as described in this topic.


Sent from my iPhone using Thailand Forum - Thaivisa mobile app

 

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.