Over 400 Thai firms suspected of foreign nominee operations

[webfact]

 

An inspection by the Business Development Department has revealed that over 400 firms across Thailand’s major tourist hotspots may be operating under foreign nominees.

 

The firms under scrutiny are located in bustling provinces including Phuket, Bangkok, Chiang Mai, Surat Thani, and Chon Buri. The businesses investigated span various sectors, such as tour guides, restaurants, car rentals, hotels, and real estate.

 

The Director-General of the Business Development Department, Auramon Supthaweethum, announced yesterday that the inspection targeted companies suspected of acting as nominees for foreign corporations. Of the 419 firms identified, 313 were commanded to provide additional documents for further verification.

 

In collaboration with the Tourism Department and the Department of Special Investigation (DSI), the department is also examining 59 firms in Phuket believed to be functioning as nominees. One such firm is the Elephant Sanctuary Park Phuket, run by Urs David Fehr, a 45 year old Swiss national, and his Thai wife, Khanuengnit. Fehr recently made headlines for allegedly assaulting a doctor he accused of trespassing on his rented property.

However, an inquiry showed that the firm, registered as a tour guide business, is not operating under a nominee. The shares are divided, with 51% held by Khanuengnit and another Thai shareholder, while Fehr owns the remaining 49%.

The aforementioned inspection came in the wake of a memorandum of understanding (MoU) signed by the Tourism Department to eradicate proxy tourism businesses. Six agencies have teamed up for this cause, including the Tourism Department, the Office of the Permanent Secretary of the Ministry of Tourism and Sports, the Business Development Department, the DSI, the Tourist Police Bureau, and the Immigration Bureau.

 

An operation centre has been established at the Tourism Department to address the issue of proxy businesses. Additionally, a joint panel has been convened to devise measures to enhance the standard of tourism businesses.

 

In a separate development related to the assault case involving Fehr, Phuket’s deputy governor, Sattha Thongkham, revealed that they have proposed to revoke Fehr’s visa due to his behaviour, deeming it a threat to public order and safety. However, the final decision lies with the court, as Fehr has the right to stay in Thailand to defend himself in the legal case, reported Bangkok Post.

 

Furthermore, the location of the assault, a staircase at Yamu Beach in Thalang district, is being demolished by the local municipality after being found to encroach on public land. Police have vowed to inspect all public areas in Phuket for similar violations.

 

by Mitch Connor

Picture courtesy of ThaiPost

 

Source: THe Thaiger 2024-03-07

 

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[Skipalongcassidy]

The blind leading the blind comes to mind.

[stoner]

makes sense as to why tourism is booming. 

[bamnutsak]

So initially someone approved all of these business entities and their associated nominees, and now it looks like a huge number may be suspect.

 

 

Another day in Corruption Land.

 

 

The PM will be "shocked".

 

 

[ChipButty]

This Switerland guy has opened a can of worms, I'll bet half the big villas in the area have used to Thai nominee's 

[quake]

Expat brown underwear day. 

[jayboy]

Some people will never learn.In Thailand it is often possible to structure entities that are nominally legal (there are multiple lawyers who will advise on this though they rarely mention any downside) but are nevertheless in conflict with the spirit /intention of Thai authorities.Nine times out of ten there will be no problem and the entity can operate without significant issues.The problem can come when the entity is stress tested perhaps by an unforeseen event, a hostile local business man or a tightening up of laws to better reflect intent.

 

A wise foreigner looks beyond lawyers advice and tries to ensure his operation reflects Thai policy as well as Thai legal niceties.

 

There are I should say excellent legal firms who give non partisan decent advice - but they are expensive and few in number.The foreign cowboys rarely consult them.

[tomazbodner]

24 minutes ago, jayboy said:

Some people will never learn.In Thailand it is often possible to structure entities that are nominally legal (there are multiple lawyers who will advise on this though they rarely mention any downside) but are nevertheless in conflict with the spirit /intention of Thai authorities.Nine times out of ten there will be no problem and the entity can operate without significant issues.The problem can come when the entity is stress tested perhaps by an unforeseen event, a hostile local business man or a tightening up of laws to better reflect intent.

 

A wise foreigner looks beyond lawyers advice and tries to ensure his operation reflects Thai policy as well as Thai legal niceties.

 

There are I should say excellent legal firms who give non partisan decent advice - but they are expensive and few in number.The foreign cowboys rarely consult them.

In many cases foreigners are fully aware that what they are doing is shady or illegal and do it anyway. Don't tell me that those who bought a company that only exists on paper with photocopies of ID cards of some upcountry folks listed as shareholders and directors to own a house didn't know what they were doing was illegal...

[transam]

1 hour ago, quake said:

Expat brown underwear day. 

Yes, bum burp day for many.........🥺

 

Especially those who bought a house under a company name that does nothing, and bragged about it on here...............😱

[smedly]

no mention of bars and entertainment venues which are responsible for possibly the majority of the gray businesses

[transam]

34 minutes ago, smedly said:

no mention of bars and entertainment venues which are responsible for possibly the majority of the gray businesses

We can guess why..............

[Old Croc]

1 hour ago, jayboy said:

Some people will never learn.In Thailand it is often possible to structure entities that are nominally legal (there are multiple lawyers who will advise on this though they rarely mention any downside) but are nevertheless in conflict with the spirit /intention of Thai authorities.Nine times out of ten there will be no problem and the entity can operate without significant issues.The problem can come when the entity is stress tested perhaps by an unforeseen event, a hostile local business man or a tightening up of laws to better reflect intent.

 

A wise foreigner looks beyond lawyers advice and tries to ensure his operation reflects Thai policy as well as Thai legal niceties.

 

There are I should say excellent legal firms who give non partisan decent advice - but they are expensive and few in number.The foreign cowboys rarely consult them.

 When a newbie in Thailand, and being a little naive on the subject, I initially bought Phuket properties using this method. I had 49%of the company, the lady 48% and a Thai I didn't know (accountant's office employee) 3%.

I later became very concerned about the potential ramifications, so I engaged good legal assistance, sold/transferred the assets to the Lady and closed the company. The extra cost was well worth it for peace of mind.

The Lady is my wife and we have been together for 18 years..

[quake]

2 hours ago, transam said:

Yes, bum burp day for many.........🥺

 

Especially those who bought a house under a company name that does nothing, and bragged about it on here...............😱

 

Yes. They have all gone,  very quiet. 

[Jonathan Swift]

3 hours ago, jayboy said:

Some people will never learn.In Thailand it is often possible to structure entities that are nominally legal (there are multiple lawyers who will advise on this though they rarely mention any downside) but are nevertheless in conflict with the spirit /intention of Thai authorities.Nine times out of ten there will be no problem and the entity can operate without significant issues.The problem can come when the entity is stress tested perhaps by an unforeseen event, a hostile local business man or a tightening up of laws to better reflect intent.

 

A wise foreigner looks beyond lawyers advice and tries to ensure his operation reflects Thai policy as well as Thai legal niceties.

 

There are I should say excellent legal firms who give non partisan decent advice - but they are expensive and few in number.The foreign cowboys rarely consult them.

What do you know! A person who sounds like he knows what he's talking about! The next round is on me! Carry on. 

[Hakuna Matata]

This is not 400 firms. This number is highly underestimated.

 

There are probably 40,000 firms in Thailand operated by foreigners and using Thai nationals as nominees (mostly unscrupulous Thai lawyers, some of them are the "owners" of several hundred registered companies operated by foreigners and foreign mafia in Phuket and Pattaya).

[BenStark]

4 hours ago, webfact said:

An inspection by the Business Development Department has revealed that over 400 firms across Thailand’s major tourist hotspots may be operating under foreign nominees.

 

Next stop, the land department revealed that thousands of companies use nominees to bypass the restrictions on foreign land ownership.

[Mavideol]

surprised it took them that long to find out, it's very well known and now even more that many "new" business are owned by Russians.... Thailand reap what you sow

[thairookie]

I see a lot of Russians and Chinese working as property agents in Pattaya.

 

When I asked for their business card, it shows they are employed as "marketing analyst".

 

So they analyze the property market and collect an agent's commission ?

 

When is Joke going to round them up ?

[jippytum]

400 is the tip of the iceberg. 400 thousand would be nearer the mark. What happened to the checks that Thai nominees had to provide and prove they provided financial support to the company. 

[NativeBob]

That's very sad news. I know some foreigners who bought houses using exactly this "trick". 

[GregBow]

4 hours ago, jayboy said:

Some people will never learn.In Thailand it is often possible to structure entities that are nominally legal (there are multiple lawyers who will advise on this though they rarely mention any downside) but are nevertheless in conflict with the spirit /intention of Thai authorities.Nine times out of ten there will be no problem and the entity can operate without significant issues.The problem can come when the entity is stress tested perhaps by an unforeseen event, a hostile local business man or a tightening up of laws to better reflect intent.

 

A wise foreigner looks beyond lawyers advice and tries to ensure his operation reflects Thai policy as well as Thai legal niceties.

 

There are I should say excellent legal firms who give non partisan decent advice - but they are expensive and few in number.The foreign cowboys rarely consult them.

I think the 400 is missing at least one zero.

If they are serious let them go to Tik Tok and see whats going on.

Or set up a proper hotline for non Thai speakers to have their chance on finding out about legality and complaining if they been set up by "connected" whoevers.

[ryandb]

Well I'm shocked, 400 businesses that's crazy....... There's probably at least 4000 here in the Gulf Islands alone if not more.

[hotchilli]

Thailand wants to male it crystal clear what they want.

No foreigner is going to plough millions of baht into a business without some legal paperwork to secure the investment.

So a Thai nominee is the usual way to go.

If they want to make that illegal watch the business fold and go elsewhere.

[sabaiguy]

Following this story one thing puzzles me (one?).  One of the issues they are going after him is the "illegal" staircase to the beach. In fact I think they have already ordered him to destroy it. Yet throughout the story they describe him as a renter.  Wouldn't the owner be responsible?

[madmitch]

The old "crackdowns" that went a bit quiet during covid appearing again. As usual brought about by one isolated incident. I've known many people using this route ( I did myself several years ago) but not known any that have had problems. 

 

It is illegal but as is often the case in Thailand, a two week hit then forgotten about....until another incident makes the headlines!

 

[John Drake]

Thought there was a "crackdown" on this, especially as applied to property/house ownership about 8 years ago. Circling around, I guess.

[bristolgeoff]

As far as i know the rules if a farang has a company.He must employ several thais pay tax and health insurance for them. costs alot to them,they get a work permit too.They would work in the business but the rules and thais do the work they just watch.The director or directors including a thai director too i believe,that is the requirement if u want to set up a company in thaialnd

[IamNoone88]

The sooner Thailand follows SIngapore corporate ownership structure and allows 100% foreign ownership the better the economy will be.

[tomazbodner]

11 minutes ago, IamNoone88 said:

The sooner Thailand follows SIngapore corporate ownership structure and allows 100% foreign ownership the better the economy will be.

Followed up by tightening of regulations to make it very difficult or impossible for foreigners to stay there, which Singapore is also doing now. Go and check how many foreigners were forced to leave the island in the past year.

[PETERTHEEATER]

1 hour ago, sabaiguy said:

Following this story one thing puzzles me (one?).  One of the issues they are going after him is the "illegal" staircase to the beach. In fact I think they have already ordered him to destroy it. Yet throughout the story they describe him as a renter.  Wouldn't the owner be responsible?

The company that built the house and the steps has already demolished the steps as reported two days ago.