Partnership To Hold Land

[jaidam]

Just wondering how it would be to hold land in a partnership. I already have an old partnership (me 49%)with a Thai that I trust. Would it be better transferring my land/ house to that partnership name, and out of my limited company. I am very concerned about losing control of my land/house currently held in a company when we have to stop using nominees.

Any thoughts on this?

[Irene]

Just wondering how it would be to hold land in a partnership. I already have an old partnership (me 49%)with a Thai that I trust. Would it be better transferring my land/ house to that partnership name, and out of my limited company. I am very concerned about losing control of my land/house currently held in a company when we have to stop using nominees.

Any thoughts on this?

Transfer of property by a company to an individual would be subject to transfer fee of 2% and specific business tax at 3.3% on the proceeds or the market value as determined by the Land Department.

The best is to hold tight and see how the Amendments to the Foreign Business Act would evolve. Thereafter you have three years to resolve under the proposed amendments. By then, there would be a lot of bright ideas being tested and accepted.

[Arkady]

Just wondering how it would be to hold land in a partnership. I already have an old partnership (me 49%)with a Thai that I trust. Would it be better transferring my land/ house to that partnership name, and out of my limited company. I am very concerned about losing control of my land/house currently held in a company when we have to stop using nominees.

Any thoughts on this?

Transfer of property by a company to an individual would be subject to transfer fee of 2% and specific business tax at 3.3% on the proceeds or the market value as determined by the Land Department.

The best is to hold tight and see how the Amendments to the Foreign Business Act would evolve. Thereafter you have three years to resolve under the proposed amendments. By then, there would be a lot of bright ideas being tested and accepted.

I don't see any difference under the Land Code between a partnership and a ltd co. If the Thai partner is a nominee, it can also be regarded as a circumvention of the Land Code. The same applies under the FBA. The 3 year grace period has been scratched from the draft of the amendments that just past its first reading in the NLA. Anyway it would only have referred to companies with genuine Thai investors owning over 50% and foreigners owning over 50% of the votes. The grace period would have been to allow the company time to restructure its voting rights. The three month amnesty for nominees has also been dropped. The amendments will probably become law around the end of August. Nominees are illegal under the existing FBA and the Land Code but the amendments will increase the penalty to 5 ears in jail and B5 million fine.

[jaidam]

It doesn't sound like there are many options then. I can either,

1) give the land to a Thai person, in their name, with perhaps some sort of rental agreement.

2) sell it quickly to a farang who is unaware of the impending land grab. These people are not as rare as one may imagine. I know of 2 people who have purchased land & house in the last month.

3) wait and see if common sense prevails before august, and the use of nominees is allowed as it has been for the last 30 years.

Only consolation if worst comes to the worst will be that I am financially able to move abroad, and watch with some amusement as Thailand does a Zimbabwe. Again not ideal as after living here for more than 10 years it would be such a shame to see the poor Thai folk suffering due to the Chinese elite's folly.

[Naam]

The amendments will probably become law around the end of August. Nominees are illegal under the existing FBA and the Land Code but the amendments will increase the penalty to 5 ears in jail and B5 million fine.

there's also talk of applying the death penalty... of course only after torturing the criminal farang "land owners" for a few months. Thai nominees will serve a minimum of 5 years hard labour and then forced to take a farang lady (not younger than 65 years) as mia noy.

[Naam]

Only consolation if worst comes to the worst will be that I am financially able to move abroad, and watch with some amusement as Thailand does a Zimbabwe.

don't hold your breath and don't think that all thai politicians are brain-amputated. my [un]educated guess is that there will be "business as usual".

[Arkady]

The amendments will probably become law around the end of August. Nominees are illegal under the existing FBA and the Land Code but the amendments will increase the penalty to 5 ears in jail and B5 million fine.

there's also talk of applying the death penalty... of course only after torturing the criminal farang "land owners" for a few months. Thai nominees will serve a minimum of 5 years hard labour and then forced to take a farang lady (not younger than 65 years) as mia noy.

An unnamed officer working for the CNS secretariat said a few weeks ago that the CNS ought to bring back the constitutional article that allowed the prime minister to order summary executions which used to be routinely included in all constitutions sponsored by military juntas. The article was applied as recently as the late 70s by Prime Minister Tanin Kraivixien and the condemned were taken straight from police cells and shot without even being formally charged. Perhaps this is what is in store for elderly farang retired couples.

[Naam]

The amendments will probably become law around the end of August. Nominees are illegal under the existing FBA and the Land Code but the amendments will increase the penalty to 5 ears in jail and B5 million fine.

there's also talk of applying the death penalty... of course only after torturing the criminal farang "land owners" for a few months. Thai nominees will serve a minimum of 5 years hard labour and then forced to take a farang lady (not younger than 65 years) as mia noy.

An unnamed officer working for the CNS secretariat said a few weeks ago that the CNS ought to bring back the constitutional article that allowed the prime minister to order summary executions which used to be routinely included in all constitutions sponsored by military juntas. The article was applied as recently as the late 70s by Prime Minister Tanin Kraivixien and the condemned were taken straight from police cells and shot without even being formally charged. Perhaps this is what is in store for elderly farang retired couples.

not even a wee bit torturing before being shot? how boring!

[donx]

It doesn't sound like there are many options then. I can either,

1) give the land to a Thai person, in their name, with perhaps some sort of rental agreement.

2) sell it quickly to a farang who is unaware of the impending land grab. These people are not as rare as one may imagine. I know of 2 people who have purchased land & house in the last month.

3) wait and see if common sense prevails before august, and the use of nominees is allowed as it has been for the last 30 years.

Only consolation if worst comes to the worst will be that I am financially able to move abroad, and watch with some amusement as Thailand does a Zimbabwe. Again not ideal as after living here for more than 10 years it would be such a shame to see the poor Thai folk suffering due to the Chinese elite's folly.

I am no expert, but I have heard of another alternative discussed in these or other forums. It involves restructuring of your company so that you don't have nominee shareholders. You still have Thai shareholders but they are shareholders that have bank accounts proving they have the financial means to be an investor in your company. I may be completely wrong about this but at a minimum I would discuss this with someone such as Sunbelt Asia to see if this is an option.

[Arkady]

It doesn't sound like there are many options then. I can either,

1) give the land to a Thai person, in their name, with perhaps some sort of rental agreement.

2) sell it quickly to a farang who is unaware of the impending land grab. These people are not as rare as one may imagine. I know of 2 people who have purchased land & house in the last month.

3) wait and see if common sense prevails before august, and the use of nominees is allowed as it has been for the last 30 years.

Only consolation if worst comes to the worst will be that I am financially able to move abroad, and watch with some amusement as Thailand does a Zimbabwe. Again not ideal as after living here for more than 10 years it would be such a shame to see the poor Thai folk suffering due to the Chinese elite's folly.

I am no expert, but I have heard of another alternative discussed in these or other forums. It involves restructuring of your company so that you don't have nominee shareholders. You still have Thai shareholders but they are shareholders that have bank accounts proving they have the financial means to be an investor in your company. I may be completely wrong about this but at a minimum I would discuss this with someone such as Sunbelt Asia to see if this is an option.

Joking aside there may be things you do to make your company more compliant, at least on the surface, and most of these have been touched upon in other threads and you may already be doing some or all of them. The most obvious one is the example given above i.e. get some real Thai shareholders. Others include:

- remove preferential voting rights, if they exist;

- have some profitable business operations (renting the property doesn't count as it is other income not operating income);

- get a work permit if you are an authorized director;

- file audited accounts on time that are fully endorsed by the auditors, not qualified with the comment that management refused to hand over documents for inspection. Most foreigners' shell company accounts are qualified like this without their knowledge to avoid liability to the auditor;

- remove any Annex 1 or 2 activities from your articles of association might help.

You are looking at trying to achieve a balance between security of control over the property you have presumably paid for with your hard earned cash vs reducing risk of prosecution for violation of both Land Code and FBA. Probably the only way to avoid breach of the Land Code completely is to transfer to a Thai spouse making the declaration at the Lands Department. That is not everyone's idea of security of control over the property and is not an option to those without a Thai spouse. No other solutions can be regarded as completely safe from prosecution and, if they want to get you, they will, but there is also no point in being a sitting duck. Now that the amendments are almost certain to be passed, it is not sensible to wait until then. There will be no grace periods or amnesties that apply to you. I would endorse the suggestion to consult Sunbeltasia for advice on what your options might be which obviously vary a lot from case to case. They try hard to give helpful advice and are actively doing various types of restructuring for foreigners. Most Thai firms just tell you any old rubbish.

[Arkady]

The amendments will probably become law around the end of August. Nominees are illegal under the existing FBA and the Land Code but the amendments will increase the penalty to 5 ears in jail and B5 million fine.

there's also talk of applying the death penalty... of course only after torturing the criminal farang "land owners" for a few months. Thai nominees will serve a minimum of 5 years hard labour and then forced to take a farang lady (not younger than 65 years) as mia noy.

An unnamed officer working for the CNS secretariat said a few weeks ago that the CNS ought to bring back the constitutional article that allowed the prime minister to order summary executions which used to be routinely included in all constitutions sponsored by military juntas. The article was applied as recently as the late 70s by Prime Minister Tanin Kraivixien and the condemned were taken straight from police cells and shot without even being formally charged. Perhaps this is what is in store for elderly farang retired couples.

not even a wee bit torturing before being shot? how boring!

The Thai police are trained to extract confessions, since their investigative skills are extremely poor and that involves hard work. Most of those sentenced to immediate execution without trial had been arrested for murder with a few arsonists and political dissidents thrown in. You can be sure that any who didn't confess immediately would have received the treatment you refer to. It is off thread but, apart from the political executions which were generally done on the quiet, the intention was largely to create the impression of a military strongman who punishes crimes that shock the nation swiftly without hesitation and the Thai public loved it. Thaksin was taking a leaf from the history books when he had prisoners executed virtually in front of TV cameras and later initiated the extrajudicial killings program and the body count policy in the South and it all played as well with the public as it had in the 60s and 70s under the military dictatorships.