Farangs Holding Property Through Thai Companies

[stevejones123]

Googling, I have found the law in question, which is the Ley Urbanistica Valenciana, which was passed in December 2005, to replace the 1994 LRAU (Ley Regladora de la Actividad Urbanistica). The particular matters which seem to have caused ill-feeling are the Proyectos de Actuacion Integradas.

The LRAU was replaced because some of its parts were judged to be against community law. There have been other complaints about the amount of compensation offered (which obviously can be challenged in court by a recurso contencioso administrativo). None of this suggests that people are getting their property confiscated without notice because they are foreigners.

As the law has been in effect in some fashion or other since at least 1994, it does not seem to have had much effect on real estate investment in Valencia by foreigners, though if it did manage to put a stop to building altogether, it probably would be a good thing considering the overexploitation of water and other resources in the area.

Edited April 15, 2007 by stevejones123

[stevejones123]

Looking at the matter further a couple of points spring to mind:

1. 
   

• The action of the EU embassadors seems more 'cara a la galeria' then intended to have any effect. To complain about a law ten years after it was passed and seven years after it has been judged consititutional by the constitutional court, does not seem very effective. And when the entity you are complaining to, the Spanish government, didn't pass the law and has been judged by the Constitutional Court to have no say in the matter, then it seems even less likely to have any effect.
  
• The law, both the old and the new, do seem likely to have unfortunate effects; expecting a Spanish Council, especially in Valencia, to look after its residents interests (particularly those that don't have a vote, which is true of non-residents, and non-EU residents) is akin to giving the blood bank to Dracula.
  
• Exaggerated claims such as calling the law the "Land Grab" law, or saying "Spanish law is a disaster" (a common comment from British lawyers which should be translated as "I haven't studied Spanish law that well, and so I'm going to say nasty things about it instead of recommending a lawyer who has") do little good. There is very robust protection for individual rights in Spain; the first thing the affected person should do is make apply for judicial review, make a recurso contencioso administrativo, if he feels the legal decision was unjust or if he feels the compensation offered was not sufficient. As the appellant has the right to take the matter all the way to the Supreme Court, and the costs of Spanish lawyers are low in comparison to what English lawyers charge, and as this will tie up the whole urbanization, then the odds are that he will soon be accommodated out of court.
  

Edited April 15, 2007 by stevejones123

[Mobi]

There are obviously some who have far greater knowledge about what happened in Spain than I do - I was making my assumptions based on what I remember reading in the press some years ago.

So there may or may not be similarities with the Thai situation, but does it really matter?

This thread is about what's happening here - not in Spain.

I suggest the Spanish digression has gone far enough.

I also suggest that if Thai authorities do decide to get tough and start evicting law breakers, they will not worry too much about any possible adverse publicity - they have already shown themselves impervious to such sentiment.

[BAF]

The main problem is both Spain and Italy, is that the crackdown comes too late, and also that often one layer of government (normally the local council is colluding), but the illegality of building without planning permission has been known for twenty-five years at least and it is clear the buyers did not exercise due diligence - I suspect the typical British belief that Johnny Foreigner does not have laws like civilized Anglo-Saxon civilizations had something to do with it.

You don't know what you're talking about.

In Italy it's pretty much impossible to leave someone (ESPECIALLY old couples of retirees or families with children...) stranded "under a bridge". Laws practically don't allow it.

Try as a landlord to evict someone (it doesn't make any difference, of course, if s/he is an Italian or a foreigner or even an illegal!) who isn't paying his/her rent since months!

For example, the only recent high profile and very public case of authorities demolishing illegal properties has been a high rise condo illegally built practically on a beach in, IIRC, Puglia (south Italy, how strange...). Even in this case, it has taken the authorities YEARS of legal battles with the developers and the owners before finally demolishing it AND it was not finished yet (work was halted at the start of the legal case)! Nobody was living there and nobody has been left homeless.

Moreover, in Italy there is the "nice custom" of periodically giving "condoni". I.E. the possibility to regularize your position/building by paying very small (compared to the value of your property) fees and submitting the exact planes and other docs relative to what you have effectively built...

I have no idea about Spanish laws and about what's actually happened in Valencia but if the central govt and the EU hasn't done anything in such a high profile case I suspect it can't be something as bad as someone is trying to portray it here by comparing it to what absolutely right-less foreigners face in Thailand.

[larvidchr]

The Landgrab law in Valencia i refer to was the governments right to take land rightly owned by somebody else Foreigners or Spanish alike without compensation,

It would be useful if those complaining about events in Valencia could give a link to a Spanish source regarding the law. It is quite unconstitutional in Spain to take land without compensation, and no autonomous community can pass a law that does this.

and if they build a road on that land they would forward the bill to the original owner of the land, many got bills of 50.000 euros or more

When a builder builds a block of flats or housing estate he is responsible for the infrastructure, roads, power lines, sewage facilites and so on. This is standard in much of Europe (in the UK the requirements can be even more rigid). If the builder doesn't do this then the government can require him, or those who have inherited his liabilities (in this case the new owners) to do so, or pay the cost of such work in lieu. This is, I presume, what you are referring to.

Now if this can happen in the EU, how much more likely is it to happen in Thailand, where farangs have no rights whatsoever beyond their one year 'extension of stay visa' and some don't even have that?

What it seems happened in Valencia was that buildings built without planning permission were either demolished, or the owners were required to pay the cost of the missing infrastructure required to make them legal. This has nothing to do with the owners being foreigners. There have been many high-profile cases of well-known Spaniards having their houses demolished because they exceeded planning permission limits. If you think things are different in the UK take your profit from Thailand and built a block on flats on some farmland of yours in a Green zone and then see how far you get. The main problem is both Spain and Italy, is that the crackdown comes too late, and also that often one layer of government (normally the local council is colluding), but the illegality of building without planning permission has been known for twenty-five years at least and it is clear the buyers did not exercise due diligence - I suspect the typical British belief that Johnny Foreigner does not have laws like civilized Anglo-Saxon civilizations had something to do with it.

I repete the landgrab law only implemented in the Valencia region in 1994 had nothing to do with the otherwise illegal building all over Spain, and yes it was only implemented in the Valencia region, litigation was then started in EU and all the other regions in Spain waited to se what happend, so far Valencia has lost in the EU courts, but a lot of people had to give up their homes before it came so far, since i have not been in Spain for two years after I sold my house there i have not kept track of what the outcome vith the Valencia landgrab law have been if indeed there is an outcome yet.

Look at http:// www.valenciaproperty.co.uk/landgrab.html a short and glossed over explanation by a realestate agent.

Where I lived for 3 years in Spain it was the norm espcially among English property buyers to buy homes without lawyer assistance and without Escrituras (Deeds) on the land and without building permission on said land, why somebody in their right mind would travel to a foreign country and do what they never would do at home defies belief, and hundreds of them are now in trouble with the Spanish crackdown on illegal building and development. I my self have English friends that now on year 4 is waiting to be allowed to move in to their 95 % finished house to a value 4 years ago at 450.000 euros, the police stopped all work on the site and they have been renting since hoping that their life savings wont be lost

The Spanish regions have extensive autonomi, every region have their own government+ parlaments and do in fact act like states in a state, like US if you like, the catalan region with Barcelona as the capitol have on several ocassions been on the verge of breaking free from mainland Spain and have negotiated even bigger autonomi than the rest of the Spanish regions but the region still have very strong forces that wish to break free from Spain.

But this is all a bit off subject from the tread, the point was that implementing laws that hurt property investors in regions that rely heavily on turism and longterm turism will hurt the trade.

Edited April 15, 2007 by larvidchr

[DDay]

As I see it the issue currently being addressed by the Thai gov't is the fact that a FOREIGN (controlled by foreigner) company can not own land unless granted so by the gov't (BOI etc).

I assume that they have looked at the company structures currently in existance to circumvent the land owner law and have observed that control of company board voting rights/shares was the prefered method. Their efforts to not allow a foreigner to control the votes/shares seems to me to be their intended solution.

In another words, a Thai company (voting majority held by Thais) will have no problems holding land and with the newly proposed changes, no company can be structured to give the voting/shares majority to the foreigner. In their eyes this is 'problem solved'.

This approach makes it much easier for the Thai's to enforce the company structure requirements as opposed to going after each individual company. All companies must change their structure to adhere to the new requirements and any land owning company that does not remove the majority shares/voting rights from the foreigner is illegal.

I am definitly not a lawyer and my opinions are not to be construed as any thing other than an opinion.

Edited April 16, 2007 by DDay

[Arkady]

To answer your question Mobi, I dont think its time to dump the company yet. Those of us who decided to wait and see what happens are still waiting.

The FBA is still in a state of flux and until it is implemented and a farang is actually taken to court and had his land confiscated, then who knows what the outcome will be.

Even then there may be some sort of outcry or appeal and the government may back off - would not be the first time they have changed their mind when they have problems.

Its been a year since the so called crackdown and nothing has happened to anyone yet. No farang has had his land confiscated ??

Sure I could be the unlucky first farang to be taken to court - what a 'b**mer' if I am - still not very likely is it?

Then there are the elections later this year - the new government may lose interest in all this - or could get really motivated and start grabbing land.

I think though its still best to wait and see.

The law doesn't allow for confiscation of land. It first obliges the illegal foreign owner (i.e. the company) to sell and, if this is not done, it can be sold at auction by the Legal Execution Dept. The Commerce Ministry may also dissolve the company for breach of the FBA. These processes would no doubt involve a lot of legal costs, fines and tax payments. The proceeds from the sale and winding up of the company (if anything left) after payment of the company's debts would have to go to the shareholders pro-rata i.e. Thai nominees have to receive 51% or whatever their shareholding is after liquidation of the company's debt. The foreign shareholders/ directors might be imprisoned and/or deported and would have little use for a house in Thailand anyway. It takes at least two years to dissolve a company and normally involves a tax audit.

It looks like the amendments will probably now go through as the Commerce Minister, who ironically was a member of the Thaksin governement that caused the fuss, has been hel_l bent on finishing the job, so he can claim at least one "achievement". They will probably not survive indefinitely but with the flakiness of Thai politics who can say how long it will take to get rid of them, once this dinosaur government has gone.

Remember that the amendments to the FBA don't change the law on ownership of land which is the Land Code and these company structures which are designed purely to circumvent the Land Code have always been illegal. The amendments make majority voting rights illegal and increase the penalties substantially for nominees and those they act for. People accepting advice from lawyers in Pattaya and elsewhere to buy land through 100% nominee owned companies and then transferring some of the shares to themselves seem to be asking for trouble. In fact anyone, who is aware of the situation, buying land through a company since the famous letter to Lands Offices last May put the writing on the wall probably needs their head examined.

For those that, in spite of all, are contemplating buying land through a company or have already done so, please bear in mind that it is illegal in Thailand to operate a holding company that has no operations. The Commerce Ministry can order a company to be dissolved after three years of no operating profits (rental income counts as "other income" not "operating income"), unless management can come up with a good explanation as to how they are going to turn the business around and you wouldn't want to be investigated for this. It is also illegal to be a foreign director of a company not to have a work permit. In most parts of the country this seems not to be enforced for non-executive directors who are not authorized signatories but signing on behalf of the company definitely meets the Labour Ministry's definition of work. To get a work permit the company needs to register for VAT and fill monthly VAT returns. If there is no revenue reported the Revenue Dept may cancell the VAT registration after six months which will make it impossible to renew the work permit. The Labour Ministry may not renew the work permit if the company does not report a profit and pay tax within its first two years. Of course, the company also needs to file audited accounts annually and half year profit forecasts. Farang shell companies are usually "qualified" by sleezy CPAs for 8,000 baht a fling. This means that the accounts are prefaced by an auditor's statement in Thai that says the company's management refused to provide requested documents, so the auditor was unable to verify the information contained in the accounts. This is never translated in the version given to you by your friendly lawyer/accountant/realtor one stop service but sits in the accounts filed at the Commerce Ministry as a red flag to any investigators that something is wrong with this company.

Personally, I would not advise any one who is not serious about running and administering a taxable business with Thai shareholders they know and trust who can demonstrate their source of funds used to buy their shares (not a loan from you) to set up a Thai company for the purpose of buying land or anything else (apart from Americans setting up treaty companies to do business but not to buy land). For those who not already enmeshed in this situation why bother to give yourselves a headache? If you want to own property in Thailand, buy a condo. If you must live in a house, rent one and invest your cash in something that generates enough to pay your rent. If you must own a house with land in the sun, buy one in Malaysia, Spain, the Carribbean or some other jurisdiction where your investment is welcome.

[Mobi]

Good one Arkady.

You have elucidated the current situation very clearly, and covered all the various aspects of this shoddy business.

For those who have companies that own your property, please be aware that it is not a simple procedure to dump the company and transfer the land. My advice is to start investigating what needs to be done now, so at least you are prepared if and when the time comes.

To me, the worst part about this business is that so-called 'reputable' lawyers are still setting up companies with 100% Thai nominees in a manner previously explained. To me this is totally criminal and this practice should be condemned at the highest levels.

Maybe the foreign chambers of commerce, or embassies should be warning farangs not to buy houses in this manner?

But who wants to upset the land developers/lawyers gravy cart?

[Arkady]

As I see it the issue currently being addressed by the Thai gov't is the fact that a FOREIGN (controlled by foreigner) company can not own land unless granted so by the gov't (BOI etc).

I assume that they have looked at the company structures currently in existance to circumvent the land owner law and have observed that control of company board voting rights/shares was the prefered method. Their efforts to not allow a foreigner to control the votes/shares seems to me to be their intended solution.

In another words, a Thai company (voting majority held by Thais) will have no problems holding land and with the newly proposed changes, no company can be structured to give the voting/shares majority to the foreigner. In their eyes this is 'problem solved'.

This approach makes it much easier for the Thai's to enforce the company structure requirements as opposed to going after each individual company. All companies must change their structure to adhere to the new requirements and any land owning company that does not remove the majority shares/voting rights from the foreigner is illegal.

I am definitly not a lawyer and my opinions are not to be construed as any thing other than an opinion.

Your assumptions are logical but not actually correct. The FBA amendments are driven by the Kubarb Kaew/Temasek case and the FBA is the province of the Commerce Ministry. Land ownership comes the Land Code which is the governed by the Lands Dept, a part of the Interior Ministry. The land ownership issue, which was raised under the Thaksin government vis a vis developments in Samui, is nevertheless floating around somewhere in the background and has been raised by the Commerce Minister in connection with the FBA amendments. However, there hasn't yet been any move to amend the Land Code which doesn't say anything about voting rights. It defines an alien company as having more than 49% of its shares owned by foreigners but it also has stringent definitions on what amounts to a circumvention of the law. Technically a company set up with genuine Thai shareholders owning 51% and foreigners having voting rights of more than 51% is allowed under the Land Code. Annex 3 companies with this structure will technically be allowed to continue as is, if they report their "alienness" to the Commerce Ministry within one year, although no new companies could be structured like this. So the amendments to the FBA seem incomplete without corresponding amendments to the Land Code. This might bring problems for listed property companies that are 40% plus foreign owned which have a lot of non-voting depositary receipt shares (NVDRs) that reduce the total amount of voting shares and therefore give foreigners voting control e.g. Raimon Land and several others.

[dsfbrit]

To answer your question Mobi, I dont think its time to dump the company yet. Those of us who decided to wait and see what happens are still waiting.

The FBA is still in a state of flux and until it is implemented and a farang is actually taken to court and had his land confiscated, then who knows what the outcome will be.

Even then there may be some sort of outcry or appeal and the government may back off - would not be the first time they have changed their mind when they have problems.

Its been a year since the so called crackdown and nothing has happened to anyone yet. No farang has had his land confiscated ??

Sure I could be the unlucky first farang to be taken to court - what a 'b**mer' if I am - still not very likely is it?

Then there are the elections later this year - the new government may lose interest in all this - or could get really motivated and start grabbing land.

I think though its still best to wait and see.

The law doesn't allow for confiscation of land. It first obliges the illegal foreign owner (i.e. the company) to sell and, if this is not done...

...

It looks like the amendments will probably now go through ...

Agreed, but these 2 sentences alone, would lead me to advise anyone with the company/ land ownership scenario to wait and see what is eventually decided and what the implementation actually turns out to be. Until an actual case is taken through the courts we can not be sure just how serious all this is. I have seen lots of legislation in Thailand slowly vanish as it proves difficult to implement and/or brings bad publicity.

Hey I could be wrong and all hel_l could be let loose on day 1 of the new law when/if it is implemented and enforced - I doubt it though.

I have spent the last 12 months understanding all the issues as best I can, so I am ready to do the 30 year lease thing with my wife if need be.

SO to to anybody who is aboout to buy land through the company route I would strongly advise them not to !!! I cannot understand why anyone would want to join this merry little 'club'. For those of us already with this scenario, then wait and see.

[quiksilva]

Good one Arkady.

You have elucidated the current situation very clearly, and covered all the various aspects of this shoddy business.

For those who have companies that own your property, please be aware that it is not a simple procedure to dump the company and transfer the land. My advice is to start investigating what needs to be done now, so at least you are prepared if and when the time comes.

To me, the worst part about this business is that so-called 'reputable' lawyers are still setting up companies with 100% Thai nominees in a manner previously explained. To me this is totally criminal and this practice should be condemned at the highest levels.

Maybe the foreign chambers of commerce, or embassies should be warning farangs not to buy houses in this manner?

But who wants to upset the land developers/lawyers gravy cart?

The British and Australian Chambers have in fact already stated that they do not condone this land ownership route and indeed have always advised against it. The thing is very few people actually bother to seek out the advice of their Chamber of Commerce before embarking on such ventures.

[JimGant]

My opinion is that you should follow the law, get a 30 year lease on the land, and consider anything you build on it to be a disposable item that's good till the end of the lease. If you can work out a deal at the end of it then consider yourself lucky. You can still sell the building and the remaining term of the lease should you decide to leave before the 30 year term expires.

I thought subleasing (i.e., 'selling the remaining term of the lease') could only be done with the permission of the lessor (landowner). If such were an irate, former Thai wife, this could prove tricky. Hence, the usufruct option, which does allow for subleasing. (But the discussions over 'lease' vs. 'usufruct' on this forum have been less than conclusive, IMO, particularly regarding the '30-year' or 'lifetime' longevity.)

[Arkady]

My opinion is that you should follow the law, get a 30 year lease on the land, and consider anything you build on it to be a disposable item that's good till the end of the lease. If you can work out a deal at the end of it then consider yourself lucky. You can still sell the building and the remaining term of the lease should you decide to leave before the 30 year term expires.

I thought subleasing (i.e., 'selling the remaining term of the lease') could only be done with the permission of the lessor (landowner). If such were an irate, former Thai wife, this could prove tricky. Hence, the usufruct option, which does allow for subleasing. (But the discussions over 'lease' vs. 'usufruct' on this forum have been less than conclusive, IMO, particularly regarding the '30-year' or 'lifetime' longevity.)

Yes, the lessor is under no obligation to agree to a reassignment of the lease and there is a limited market for structures on land not owned by the seller, although you are entitled to remove the structure which is not much use unless it made of valuable teak wood. I would think a determined Thai land owner could find a way to dishonour a sublease under a usufruct agreement too, if a farang is the lessor, i.e. have thugs kick the tenant out. There again the demand for such subleases would be extremely limited.

[stevieff]

My opinion is that you should follow the law, get a 30 year lease on the land, and consider anything you build on it to be a disposable item that's good till the end of the lease. If you can work out a deal at the end of it then consider yourself lucky. You can still sell the building and the remaining term of the lease should you decide to leave before the 30 year term expires.

I thought subleasing (i.e., 'selling the remaining term of the lease') could only be done with the permission of the lessor (landowner). If such were an irate, former Thai wife, this could prove tricky. Hence, the usufruct option, which does allow for subleasing. (But the discussions over 'lease' vs. 'usufruct' on this forum have been less than conclusive, IMO, particularly regarding the '30-year' or 'lifetime' longevity.)

Yes, the lessor is under no obligation to agree to a reassignment of the lease and there is a limited market for structures on land not owned by the seller, although you are entitled to remove the structure which is not much use unless it made of valuable teak wood. I would think a determined Thai land owner could find a way to dishonour a sublease under a usufruct agreement too, if a farang is the lessor, i.e. have thugs kick the tenant out. There again the demand for such subleases would be extremely limited.

Arkady, don't you think a lease reassignment clause can be structured in the original contract? Seems to me it could.

[RAZZELL]

Um......

Farang wants to buy house

Farang goes to lawyer

Lawyer sets up company with 100% farang money, and 100 % Thai share holders

Lawyer arranges purchase of land with Thai company as the owner, using farang money.

Lawyer

Does a bunk with a nice new house

RAZZ

[Arkady]

My opinion is that you should follow the law, get a 30 year lease on the land, and consider anything you build on it to be a disposable item that's good till the end of the lease. If you can work out a deal at the end of it then consider yourself lucky. You can still sell the building and the remaining term of the lease should you decide to leave before the 30 year term expires.

I thought subleasing (i.e., 'selling the remaining term of the lease') could only be done with the permission of the lessor (landowner). If such were an irate, former Thai wife, this could prove tricky. Hence, the usufruct option, which does allow for subleasing. (But the discussions over 'lease' vs. 'usufruct' on this forum have been less than conclusive, IMO, particularly regarding the '30-year' or 'lifetime' longevity.)

Yes, the lessor is under no obligation to agree to a reassignment of the lease and there is a limited market for structures on land not owned by the seller, although you are entitled to remove the structure which is not much use unless it made of valuable teak wood. I would think a determined Thai land owner could find a way to dishonour a sublease under a usufruct agreement too, if a farang is the lessor, i.e. have thugs kick the tenant out. There again the demand for such subleases would be extremely limited.

Arkady, don't you think a lease reassignment clause can be structured in the original contract? Seems to me it could.

From what I understand Thai law takes a very basic view that a lease is an agreement between two contracting parties and once a new contracting party is introduced into the equation, either a new lessor, lessee or a sub-lessee the agreement is no longer necessarily valid. I would take a cautious view that a lease reassignment clause is like an option to renew after 30 years i.e. that it is an option for the lessor to renew, if he feels like it, on terms of his choosing. It might help to get the Lands Dept to register that there is an agreement to reassign or sublet, if they are willing but a court would pay attention to it is hard to say, as rulings seem to be often based on the whims of individual judges after a selective review of the facts. If you have to go to court, you have usually already lost.

[Arkady]

Um......

Farang wants to buy house

Farang goes to lawyer

Lawyer sets up company with 100% farang money, and 100 % Thai share holders

Lawyer arranges purchase of land with Thai company as the owner, using farang money.

Lawyer

Does a bunk with a nice new house

RAZZ

Came across a case where a lawyer recommended by the realtor organized nominees and set up a company for a farang in Phuket before last year's notice to Lands Offices. Shortly after the transfer the main nominee, who, for the sake of convenience in effecting the transfer, had either power of attorney or was even an authorized director, resold the house and made off with the proceeds. I heard about it from a Bangkok lawyer the farang approached to get his money back. The lawyer actually managed to get something back for the farang without going to court but not the total amount. The Phuket lawyer and realtor obviously didn't want any publicity or a court case which would have made every one guilty parties but I dare say there are many more cases like this where the farang just slinks off back to his country to lick his wounds.

[JimGant]

a lease is an agreement between two contracting parties and once a new contracting party is introduced into the equation, either a new lessor, lessee or a sub-lessee the agreement is no longer necessarily valid.

Maybe so, as I've not seen any court cases addressing any of these.

But what has seemed fairly solid, on this forum and elsewhere regarding Thai law, is that the lessee is guaranteed his 30 year lease. Period. New owners may come and go -- and thus be dutifully annotated on the chanote. But foremost on that chanote is your farang name and signature attesting to your 30 year right of leasehold.

Now, what else the Land Office can annotate on the chanote, I don't know. They certainly wouldn't add any second 30-year proviso to my chanote. And liens based on mortgage? Dunno. We didn't go that route (nor could we, being married, thus requiring attestation that the land was bought entirely with her money -- making a mockery of any mortgage lien).

Private contracts between two parties stipulating 30-year renewal clauses and sublease rights may or may not be worth the effort. Again, nothing like this has come before the courts. But from my experience, the Land Office will not annotate such private contractual agreements on your chanote. And without the blessing of a government stamp, just how valid is your private contract.....

But, then, my Land Office isn't necessarily your Land Office.

Sunbelt?

[Mobi]

Um......

Farang wants to buy house

Farang goes to lawyer

Lawyer sets up company with 100% farang money, and 100 % Thai share holders

Lawyer arranges purchase of land with Thai company as the owner, using farang money.

Lawyer

Does a bunk with a nice new house

RAZZ

Came across a case where a lawyer recommended by the realtor organized nominees and set up a company for a farang in Phuket before last year's notice to Lands Offices. Shortly after the transfer the main nominee, who, for the sake of convenience in effecting the transfer, had either power of attorney or was even an authorized director, resold the house and made off with the proceeds. I heard about it from a Bangkok lawyer the farang approached to get his money back. The lawyer actually managed to get something back for the farang without going to court but not the total amount. The Phuket lawyer and realtor obviously didn't want any publicity or a court case which would have made every one guilty parties but I dare say there are many more cases like this where the farang just slinks off back to his country to lick his wounds.

Yes these scenarios were always possible, which is why I became uncomfortable with my lawyer's employees holding 51% of my company, long before the crackdown. I started to think about what may happen - say ten years down the line - if these guys started to put the screws to me. Not much I could do.

This nominee business is a very unsatisfactory, regardless of what the government does, and I'm glad to be rid of it.