Foreign Investors In Phuket Facing Police Investigation

[LivinginKata]

Wednesday, September 2, 2009

Foreign investors in Phuket facing police investigation

PHUKET: A fact-finding effort is underway in Phuket to compile information about local businesses in which Thai people are hired by foreigners as their nominees – a practice which is generally illegal under Thailand's harsh Foreign Business Act.

Provincial governor Wichai Phrai-sa-ngob, who ordered the investigation, said he was not discriminating against foreign investors, but guarding against the illegal use by foreingers of Thais as nominee shareholders.

Under Thai law, foreigners can own no more than 49-per-cent of any business invest in with Thais. An ongoing practice is that the foreigners later gain control over the company illegally.

To scrutinize foreign businesses, the Phuket Provincial Revenue office is checking on foreigners' tax payments, while the Treasury office is scrutinizing ownership of condominium space and Immigration police are examining the visa and residence status of expatriates involved in Phuket-based business activities.

Local authorities and the Interior Ministry will look into all information and decide on what to do if their fact-finding reveals illegal shareholdings, the governor said.

There are now 19,653 joint Thai-foreign businesses in Phuket, which have reportedly invested around 62 million baht. That figure alone would appear grossly incorrect, far off-scale in the context of overall foreign business in Phuket.

A sensational report in the Bangkok Post last week cited research showing that foreigners held 90% of the beachfront land in Phuket. But in a nation often averse to statistical analysis, and where statistics are frequently suspect or simply unavailable, the Post report generated widespread incredulity amongst its readers.

Patong Deputy Mayor Chairat Sukbhal dismissed the report as most hotels in Phuket were not owned by foreigners, he said, noting that most were operated as joint ventures or simply managed by a salaried foreign executive.

Meanwhile, Phuket's Provincial Business and Trade Office said a regulation requiring joint Thai-foreign businesses to produce bank accounts with a high minimum balance on deposit has been revoked because it could not effectively serve as proof of substantial business funding.

"In most cases, the money was withdrawn immediately from the bank accounts once they were presented to Thai authorities as proof," office head Weerachai Tantiwatthanawallop said.

The provincial land office says, again, that legal action will be taken against any businesses found to be holding land and operating illegally with a majority of foreign ownership, because Thai law imposes strict sanctions on foreigners owning land in Thailand. – Nation / Gazette Reporters

-- Phuket Gazette 2009-09-02

[george]

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Crackdown on foreign business tieups

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http://www.thaivisa.com/forum/Checks-Forei...Ph-t294577.html