Thailand Property Owneship-thia Company

[rken]

I haven't heard of any news on the governments new land ownership laws passing ie buying land using a Thai company with Thai buisness partners. Does anyone know the lastest info.

[Filer]

I haven't heard of any news on the governments new land ownership laws passing ie buying land using a Thai company with Thai buisness partners. Does anyone know the lastest info.

I was wondering the same thing. Can't find any recent threads about the issue on this site. I imagine the truth is that nobody really knows. The foreign land ownership thing is now so closely bound up with all the other post-coup foreign business ownership issues that it's hard to get some focus on the matter. Yes, everything does seem to have gone strangely quiet (at least in public) recently. It would be nice to hope that some of the proposed changes will ultimately be quietly dropped and that the new Finance minister will help steer things in a more pragmatic direction.

[Arkady]

I haven't heard of any news on the governments new land ownership laws passing ie buying land using a Thai company with Thai buisness partners. Does anyone know the lastest info.

There are no new land ownership laws. What is happening is that amendments are being passed to the Foreign Business Act that will: 1) classify companies that foreigners control through preferred share voting rights as foreign even though they are majority owned by Thais; 2) increase the penalties for using nominee shareholders or acting as one substanially. The amendments have passed the first reading in the junta appointed NLA and will probabably become law before the next elections, possibly by end August.

If you buy land through a Thai company which is majority owned and controlled by Thai business partners, you should have nothing to fear. Nothing has changed to the right of Thai companies with minority foreign shareholders to buy land. However, there may be some scrutiny of the Thai shareholders ability to invest when you register the company and apply to transfer the land to check they are not nominees.

A Thai lawyer recently told me that the immediate effect of the FBA amendments will be that the Business Development Dept of the Ministry of Commerce will check through the articles of association of companies with foreign shareholders to see if they have preferential voting rights. He says they admit they lack manpower to check existing companies to see if they have nominee shareholders and it is also a not very easy process to examine financial status of suspected nominee shareholders at the time they made the investments in companies that were formed years ago. Cross checking land holdings requires co-operation between the Ministry of Commerce and the Lands Office.

For what it's worth the lawyer's advice was for companies with foreign shareholders to get rid of any preferential voting rights urgently. Other than that he didn't recommend any major changes for companies that own a small amount of land as long as they have some business and file regularly with the Revenue Dept and the Business Development Dept. He recommended against amending the company's objectives to eliminate FBA Annex 1 and 2 activities as he said that companies' objectives are usually written to be very broad as a matter of course and anyway, if the company is classified Thai, it is allowed to do the Annex 1 and 2 businesses. So the objectives are not likely to be used as a way of screening companies. He felt that the Ministry of Commerce might investigate companies with foreign shareholders that don't file their annual accounts and that this might lead to the exposure of many land owning shell companies without business in resort areas.

Those contemplating setting up a company to buy land should probably think again as it is already more complicated and you might need to use 100% nominee shareholders and even this structure is being rejected by the Lands Dept in cases where the Thai nominees obviously have no clue what business the company is supposed to be doing. For those who already have a company structure, they should restructure if they can and if they want to be absolutely safe from the law, altho this usually involves transferring the entire property to a Thai which will make your security over the property much less. Others may take the Thai lawyer's advice, altho bear in mind that things may get tougher in future even for older company structures.

[carnival1200]

Does anyone have an idea of what the cost would be to transfer a property directly to a Thai - assuming a land/property value of, say 1 million baht eg.