Commerce Ministry cracks down on hidden foreign ownership

[webfact]

 

The Thailand Commerce Ministry intensifies its scrutiny of businesses allegedly using Thai nominees to hide foreign ownership, focusing on sectors like tourism, real estate, and logistics.

 

Auramon Supthaweethum, director-general of the Department of Business Development, stated that under the Foreign Business Act of 1999, foreign firms must secure permission as outlined in specific lists before starting operations.

 

A Thai limited company typically restricts foreign business ownership to a maximum of 49%.

Operating a business without permission or hiding foreign ownership by using a nominee to hold over 51% of shares is illegal.

The department reviewed 26,019 nominee cases across four business sectors: tourism and related enterprises, real estate trading, hotels and resorts, and logistics.

 

These investigations spanned six major tourist provinces: Chiang Mai, Chon Buri, Surat Thani, Phuket, Bangkok, and Prachuap Khiri Khan.

 

“After an in-depth investigation, including financial statements in 498 cases, 165 cases warranted examination of additional evidence.”

 

Following a meeting chaired by Caretaker Commerce Minister Phumtham Wechayachai with executives from 28 agencies to address the flood of cheap, poor-quality imported products, the department inspected four more business sectors: wholesale and retail, warehouses, construction and engineering, and metal trading.

 

“Entrepreneurs who identify companies at risk and affected by any business using nominees are encouraged to inform the department for investigation and further action by related agencies such as the Department of Special Investigation (DSI).”

Regarding Chinese online retailer Temu’s entry into the Thai market, the Commerce Ministry seeks cooperation with the Chinese Embassy for the portal to establish an office in Thailand to ensure legal compliance and taxation.

 

The Commerce Ministry assigned the Digital Economy and Society Ministry (MDES) to follow up on this matter.

Auramon noted that new business registrations for the first seven months of 2024 rose by 0.16% to 54,220, with a combined registered capital of 169 billion baht, down 62.1% year-on-year.

 

The department anticipates new business registrations this year to total between 90,000 and 98,000, marking a 5 to 15% increase.

 

Auramon attributed the uptick to government initiatives, such as the disbursement of the fiscal 2024 budget, the approval of the digital wallet handout, measures to attract foreign investment like the long-term resident visa scheme, and corporate income tax exemption for foreign companies doing business in Thailand, as well as the harvest season for crops.

 

However, consumers remain concerned about the slow economic recovery, high levels of household debt, political stability, and ongoing geopolitical conflicts, reported Bangkok Post.

 

by Puntid Tantivangphaisal

 

Source:: The Thaiger 2024-08-30

 

 

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[Metapod]

most villas in phuket and samui are illegally using the nominee loophole

[ronster]

They looked into 26000 but only really looked at about 500 and of those only 165 warranted additional evidence 🤔

So all the others were fine and didn't have a problem with nominees in the company ? 😂 

[Dave0206]

I'm not sure if it's " tax changes upcoming " or the fact I'm now really looking for a condo but the 2nd hand market sure has a lot of " Thai company name " units for sale often @ firesale prices  not I will be buying under company name the risk scares me

[hotchilli]

3 hours ago, webfact said:

The Thailand Commerce Ministry intensifies its scrutiny of businesses allegedly using Thai nominees to hide foreign ownership, focusing on sectors like tourism, real estate, and logistics.

A very grey area often used for foreign investment, but used against foreigners when it suits.

[Will B Good]

 

 

 

All of this foreign ownership must have come as a real shock to the ministry......why did no one tell what was happening???

 

 

 

 

[NativeBob]

he missed jewelry and precious stones trade. 

why so? obviously be cause ___________________________.

[MalcolmB]

Well this news will ruin the weekend  for many “owners”, real estate agents, lawyers and the Thais who are nominees.

[n00dle]

2 minutes ago, MalcolmB said:

Well this news will ruin the weekend  for many “owners”, real estate agents, lawyers and the Thais who are nominees.

Why? I

I have been hearing this for the last 20 years.

 

its an industry almost as lucrative as the real estate itself.

[MalcolmB]

1 minute ago, n00dle said:

Why? I

I have been hearing this for the last 20 years.

 

its an industry almost as lucrative as the real estate itself.

Yep, and now the indiscrete Chinese have alerted the average Thais to it and stuffed it up for all of us.

[proton]

45 minutes ago, Dave0206 said:

I'm not sure if it's " tax changes upcoming " or the fact I'm now really looking for a condo but the 2nd hand market sure has a lot of " Thai company name " units for sale often @ firesale prices  not I will be buying under company name the risk scares me

 

They are the ones under the Thai quota, foreign quota properties tend to be priced higher. Stay well away from ones where you don't get the freehold, not really yours is it.

[wombat]

This old chestnut...recycles regularly.

 

[john donson]

well, if you Thais can buy whatever in a western country, even get citizenship easy by marriage, but don't allow the long stay expat with family to own a bit of land, you get situations like this...

 

best to have a usufruct for life, but land department can show it's ugly head to try to forbid you that RIGHT...  unless they get a bribe... off course... as usual...