Land Ownership Methods For Foreigners In Thailand

[benchmark]

We all know by now currently, that there is a uncertain situation regarding registering land in a nominee (shell) Thai company Ltd., (foreigners to own land was always not legal in Thailand and most of us know that already) controlled by foreigners. This topic was debated often in media/local newspapers and still waiting for a final outcome. Thai government is still to announce their final decision regarding the nominee company issue.

In the meantime most new foreign buyers have shown a lot of interest in the 30 year lease option. Number of transactions have also been recorded recently.

There are certain number of foreign buyers who also got genuine Thai partners who can legally own land in their name.

Owning land freehold in foreigner's own name being the ideal option (which might not be a realistic possibility though) would like to hear different opinions from people interested in the real estate industry and their views regarding this topic.

Any up to date information posted will be highly appreciated.

To promote Thai real estate sector it is very likely that the government will continue the reduced transfer fees and property tax structure. It this a positive impact on the Thai real estate market? Is this an indication that the government will come up with more foreigner friendly policies for foreign property buyers as Thailand is heavily dependent, directly or indirectly on foreign investors?

Buying real estate in Pattaya- We are the specialists-Benchmark Property Consultants- Visit our Website

Edited November 22, 2009 by benchmark

[stgrhe]

I can't understand why you are starting this new thread when there is a very interesting thread on the subject already

http://www.thaivisa.com/forum/Issues-Nomin...ei-t295344.html

and in which the honorable Thai Visa members Quicksilva and Arkady have posted very interesting analysis. Learn from them.

[benchmark]

I can't understand why you are starting this new thread when there is a very interesting thread on the subject already

http://www.thaivisa.com/forum/Issues-Nomin...ei-t295344.html

and in which the honorable Thai Visa members Quicksilva and Arkady have posted very interesting analysis. Learn from them and please stop spamming the real estate forum and advertise instead like the other sponsors are doing.

I do appreciate your feedback. The topic I am discussing here is a much wider topic than the one you have mentioned.

[benchmark]

I can't understand why you are starting this new thread when there is a very interesting thread on the subject already

http://www.thaivisa.com/forum/Issues-Nomin...ei-t295344.html

and in which the honorable Thai Visa members Quicksilva and Arkady have posted very interesting analysis. Learn from them and please stop spamming the real estate forum and advertise instead like the other sponsors are doing.

Do you remember the following comment from a honorable member as well (It seems like you like to use this word often).

Its not spam. Before you reply you should take a look at the member group. It clearly says sponsors.

Sponsors are allowed to marketing their products

Edited November 22, 2009 by benchmark

[Changian]

uncertain situation regarding registering land in a nominee (shell) Thai company Ltd

Does 'uncertain' = technically illegal?

To promote Thai real estate sector it is very likely that the government will continue the reduced transfer fees and property tax structure. It this a positive impact on the Thai real estate market? Is this an indication that the government will come up with more foreigner friendly policies for foreign property buyers as Thailand is heavily dependent, directly or indirectly on foreign investors?

This is unrelated to foreigners 'buying' property, as foreigners cant own land in their own name so why would the govt reduce transfer fees etc to encourage them to do something they cant do anyway. It is to encourage house sales amongst Thais. As you should, as a property 'specialist', realise.

[ThaiSunshine]

From my part in Khanom I haven't seen any slowdown in the land sales .... most land I sell is freehold with the foreign buying the land in his wife's or his Thai Limited Company's name....only a few foreigners have bought leasehold.....

[quiksilva]

OK I'll bite

The market has been buzzing with rumours about incentives for foreign ownership over the last six months, possibly with areas deemed special economic zones but I don't think anybody who is clued in is convinced that its actually going to happen.

The best that could realistically happen is to increase the length of a lease term, out to say 60 or even 90 years. Its comparatively simple to do and would achieve the same objective (i.e. increased security of tenure for resident foreigners).

To promote Thai real estate sector it is very likely that the government will continue the reduced transfer fees and property tax structure.

It this a positive impact on the Thai real estate market?

Considering that this has been in place for a few years now, its not going to improve anything, but would be better than going back to normal.

Is this an indication that the government will come up with more foreigner friendly policies for foreign property buyers as Thailand is heavily dependent, directly or indirectly on foreign investors?

No. It has nothing to do with foreign buyers whatsoever, and think you are overstating the influence of foreign buyers on the Thai real estate market.

Foreign investment is of course extremely important to the Kingdom of Thailand, but not in the sector that you have implied (i.e. residential property sector) .

The most important form of foreign direct investment to Thailand, is in industry, where foreigners are permitted to own land (via the BOi and IEAT), for factories, office space, hotels, and even the residences of their management and have a number of additional attractive incentives including duty free import of machinery, corporate income tax holidays, etc.

[benchmark]

OK I'll bite

The market has been buzzing with rumours about incentives for foreign ownership over the last six months, possibly with areas deemed special economic zones but I don't think anybody who is clued in is convinced that its actually going to happen.

The best that could realistically happen is to increase the length of a lease term, out to say 60 or even 90 years. Its comparatively simple to do and would achieve the same objective (i.e. increased security of tenure for resident foreigners).

To promote Thai real estate sector it is very likely that the government will continue the reduced transfer fees and property tax structure.

It this a positive impact on the Thai real estate market?

Considering that this has been in place for a few years now, its not going to improve anything, but would be better than going back to normal.

Is this an indication that the government will come up with more foreigner friendly policies for foreign property buyers as Thailand is heavily dependent, directly or indirectly on foreign investors?

No. It has nothing to do with foreign buyers whatsoever, and think you are overstating the influence of foreign buyers on the Thai real estate market.

Foreign investment is of course extremely important to the Kingdom of Thailand, but not in the sector that you have implied (i.e. residential property sector) .

The most important form of foreign direct investment to Thailand, is in industry, where foreigners are permitted to own land (via the BOi and IEAT), for factories, office space, hotels, and even the residences of their management and have a number of additional attractive incentives including duty free import of machinery, corporate income tax holidays, etc.

Thanks Quicksilva for your contribution, I highly appreciate. Most of your points I can agree with, taking the facts we see up to date, in to consideration. But we are yet to see what Thai govenment has in store for foreigners regarding the issue of "foreigners owning land using circumvented methods" or regarding the nominee company issue. As we all know there are lot of Grey areas in this sectionof Thai law and things have been always "on the edge" regarding this issue. As far as I know nothing negative or positive has been approved as a policy yet.

Although what you say is correct about the benefits the country will get from BOI investments, etc I think there is a huge contribution to this country also from the foreign investors and developers in many different areas in Thailand such as Phuket and Pattaya. If we take Pattaya for example people here are heavily dependant on tourism and tourism directly affects the real estate. How many jobs have been created by the foreign local developers to local people in the Pattaya area alone. These employees also benefits from much higher income levels compared to an income from a local employee. It's true that these investors also benefits from it but if we imagine this city without foreign investments we won't see even half of the development we have seen in the past few years.

I do remember a statement one of the top officials of the government once mentioned unofficially about this topic (when he came to a ceminar of real estate here in Pattaya). He said he thinks this structure of foreign ownerhsip is most probably going to remain same in our lifetime (he is a middle aged man).

So I think IMO this "on the edge" concept of the government is probably going to remain like he said with similar arrangements for foreigners atleast for number of decades. I think time will tell us how important the "foreigner" (and their investments big or smalll) is to this country. This will have a direct impact on Thai the real estate market, but like I said I don't expect a huge difference anyway.

Edited November 23, 2009 by benchmark

[oracle]

OK I'll bite

The market has been buzzing with rumours about incentives for foreign ownership over the last six months, possibly with areas deemed special economic zones but I don't think anybody who is clued in is convinced that its actually going to happen.

The best that could realistically happen is to increase the length of a lease term, out to say 60 or even 90 years. Its comparatively simple to do and would achieve the same objective (i.e. increased security of tenure for resident foreigners).

What’s been buzzing the last six months about foreign ownership of land? The only buzzing about foreign ownership of land by foreigners I heard relate to nominees and Thai companies.

Increasing the length of the registered rental term? Yes, maybe if they change the Civil Code for Thais and foreigners for the few foreigners renting real estate, but not likely. There maybe a special act in the future specially for foreigners renting properties in the high end government licensed property development sector under conditions and in special zones. Maybe there will be a special act like the hire of property for commerce and industry allowing a 50 year period, but not likely. I doubt it will benefit many.

[oracle]

OK I'll bite

The market has been buzzing with rumours about incentives for foreign ownership over the last six months, possibly with areas deemed special economic zones but I don't think anybody who is clued in is convinced that its actually going to happen.

The best that could realistically happen is to increase the length of a lease term, out to say 60 or even 90 years. Its comparatively simple to do and would achieve the same objective (i.e. increased security of tenure for resident foreigners).

To promote Thai real estate sector it is very likely that the government will continue the reduced transfer fees and property tax structure.

It this a positive impact on the Thai real estate market?

Considering that this has been in place for a few years now, its not going to improve anything, but would be better than going back to normal.

Is this an indication that the government will come up with more foreigner friendly policies for foreign property buyers as Thailand is heavily dependent, directly or indirectly on foreign investors?

No. It has nothing to do with foreign buyers whatsoever, and think you are overstating the influence of foreign buyers on the Thai real estate market.

Foreign investment is of course extremely important to the Kingdom of Thailand, but not in the sector that you have implied (i.e. residential property sector) .

The most important form of foreign direct investment to Thailand, is in industry, where foreigners are permitted to own land (via the BOi and IEAT), for factories, office space, hotels, and even the residences of their management and have a number of additional attractive incentives including duty free import of machinery, corporate income tax holidays, etc.

Thanks Quicksilva for your contribution, I highly appreciate. Most of your points I can agree with, taking the facts we see up to date, in to consideration. But we are yet to see what Thai govenment has in store for foreigners regarding the issue of "foreigners owning land using circumvented methods" or regarding the nominee company issue. As we all know there are lot of Grey areas in this sectionof Thai law and things have been always "on the edge" regarding this issue. As far as I know nothing negative or positive has been approved as a policy yet.

Although what you say is correct about the benefits the country will get from BOI investments, etc I think there is a huge contribution to this country also from the foreign investors and developers in many different areas in Thailand such as Phuket and Pattaya. If we take Pattaya for example people here are heavily dependant on tourism and tourism directly affects the real estate. How many jobs have been created by the foreign local developers to local people in the Pattaya area alone. These employees also benefits from much higher income levels compared to an income from a local employee. It's true that these investors also benefits from it but if we imagine this city without foreign investments we won't see even half of the development we have seen in the past few years.

I do remember a statement one of the top officials of the government once mentioned unofficially about this topic (when he came to a ceminar of real estate here in Pattaya). He said he thinks this structure of foreign ownerhsip is most probably going to remain same in our lifetime (he is a middle aged man).

So I think IMO this "on the edge" concept of the government is probably going to remain like he said with similar arrangements for foreigners atleast for number of decades. I think time will tell us how important the "foreigner" (and their investments big or smalll) is to this country. This will have a direct impact on Thai the real estate market, but like I said I don't expect a huge difference anyway.

Referring to your previous posts: what are you saying! I'm an educated person but I do not understand your point. What you're selling. Keep it in simple wording and to the point as most good things are simple.

[benchmark]

OK I'll bite

The market has been buzzing with rumours about incentives for foreign ownership over the last six months, possibly with areas deemed special economic zones but I don't think anybody who is clued in is convinced that its actually going to happen.

The best that could realistically happen is to increase the length of a lease term, out to say 60 or even 90 years. Its comparatively simple to do and would achieve the same objective (i.e. increased security of tenure for resident foreigners).

What's been buzzing the last six months about foreign ownership of land? The only buzzing about foreign ownership of land by foreigners I heard relate to nominees and Thai companies.

Increasing the length of the registered rental term? Yes, maybe if they change the Civil Code for Thais and foreigners for the few foreigners renting real estate, but not likely. There maybe a special act in the future specially for foreigners renting properties in the high end government licensed property development sector under conditions and in special zones. Maybe there will be a special act like the hire of property for commerce and industry allowing a 50 year period, but not likely. I doubt it will benefit many.

Certainly quoted well.

IMO it boils down to couple of things. In the next few years what will be the political outlook of this country. However Thai politics is influenced mostly by politicians who are in power and also the influencial Thai business tycoons. So the question is like I mentioned before "How important is the foreigner and his investments?" to this country. If the policies are not foreign friendly and doesn't allow fair returns for foreign investments it is very likely that foreign investors consider other possibilities. If the policies are foreign friendly and if the political outlook is stable we can see a huge growth in all sectors in Thailand and this will definitely help boost the local real estate sector and the Thai economy.

Some of these topics are not as simple as it seems but in the end the decision maker is the Thai government and foreigners have very little influence on their decisions, so far. This is just my opinion.

Edited November 23, 2009 by benchmark

[quiksilva]

What’s been buzzing the last six months about foreign ownership of land? The only buzzing about foreign ownership of land by foreigners I heard relate to nominees and Thai companies.

Perhaps my circle of contacts and yours are different. I work for one of Thailand's largest property consultancies, and am a member of various chambers of commerce. I am not talking about newspaper articles and posts on TV.

Increasing the length of the registered rental term? Yes, maybe if they change the Civil Code for Thais and foreigners for the few foreigners renting real estate, but not likely.

I dont see any change in this law right now as likely at all, but of all the options I have seen this seems the most likely no matter how slim the chance of seeing it might be. But it would at least benefit more than just the foreign sector. Long leases help everyone Thais, foreigners and even the banks (longer lease terms can be considered as mortgageable assets such as those in the UK)

There maybe a special act in the future specially for foreigners renting properties in the high end government licensed property development sector under conditions and in special zones.

I heard about that too, and also doubt it will ever happen. Highly unlikely.

Maybe there will be a special act like the hire of property for commerce and industry allowing a 50 year period, but not likely. I doubt it will benefit many.

Its much easier to amend an exist law than to introduce a new one...so why bother doing this?

[benchmark]

From my part in Khanom I haven't seen any slowdown in the land sales .... most land I sell is freehold with the foreign buying the land in his wife's or his Thai Limited Company's name....only a few foreigners have bought leasehold.....

In the Sattehip land office there were refusals to register land in a nominee company and I have heard from a local lawyer that it has started in the Pattaya land office also to investigate nominee Thai companies. So there is an issue here.

I am not sure why you haven't experienced it in your jurisdiction yet. Has anyone else experienced similar refusals any where else?

Honestly, it is not possible to recommend a client to register a land in a nominee company until we find out more about a clear policy regarding this issue.

[benchmark]

Referring to your previous posts: what are you saying! I'm an educated person but I do not understand your point. What you're selling. Keep it in simple wording and to the point as most good things are simple.

Sure no problem this is a summery.

IMO it boils down to couple of things. In the next few years what will be the political outlook of this country. However Thai politics is influenced mostly by politicians who are in power and also the influencial Thai business tycoons. So the question is like I mentioned before "How important is the foreigner and his investments?" to this country. If the policies are not foreign friendly and doesn't allow fair returns for foreign investments it is very likely that foreign investors consider other possibilities. If the policies are foreign friendly and if the political outlook is stable we can see a huge growth in all sectors in Thailand and this will definitely help boost the local real estate sector and the Thai economy.

Some of these topics are not as simple as it seems but in the end the decision maker is the Thai government and foreigners have very little influence on their decisions, so far. This is just my opinion.

[pkrv]

I generally stay well clear of such topics because people always assume that it is about House and Land ownership - Well that is wrong. I legally own land as a Farang in the CBD in Bangkok. This is done as a % share as a part of a condominium purchase. The law already exists but IMO needs to be updated/reviewed.

Some comments I would make are:

1) As a Farang I pay an annual maintenance charge to the condominium, I suspect much of this annual revenue goes directly into the Thai economy.

2) How many Farang owned condos are there in Thailand? 1million? Who knows? - but they have an associated recurring annual revenue stream for Thailand. Let alone their original purchase price.

3) Farangs not being in the Blue Book for a freehold condominium and having to use the Chanott ti din seems nonsensical. IMO this is just a costly overhead in bureaucracy. Just like Thais, put Farang name(s) in the blue book for Farang or Farang/Thai Quota freehold condominiums - The name(s) is/are already on the Chanott ti din, so why be so pedantic here?

4) If there is a desire to move forward IMO it will first show itself in the removal of the 51/49% rule. You just own a condo that's it.

Well that's my thoughts on land ownership and given I actually legally own land under Thai law do these thoughts not have a place?

Edited November 25, 2009 by pkrv

[benchmark]

I generally stay well clear of such topics because people always assume that it is about House and Land ownership - Well that is wrong. I legally own land as a Farang in the CBD in Bangkok. This is done as a % share as a part of a condominium purchase. The law already exists but IMO needs to be updated/reviewed.

Some comments I would make are:

1) As a Farang I pay an annual maintenance charge to the condominium, I suspect much of this annual revenue goes directly into the Thai economy.

2) How many Farang owned condos are there in Thailand? 1million? Who knows? - but they have an associated recurring annual revenue stream for Thailand. Let alone their original purchase price.

3) Farangs not being in the Blue Book for a freehold condominium and having to use the Chanott ti din seems nonsensical. IMO this is just a costly overhead in bureaucracy. Just like Thais, put Farang name(s) in the blue book for Farang or Farang/Thai Quota freehold condominiums - The name(s) is/are already on the Chanott ti din, so why be so pedantic here?

4) If there is a desire to move forward IMO it will first show itself in the removal of the 51/49% rule. You just own a condo that's it.

Well that's my thoughts on land ownership and given I actually legally own land under Thai law do these thoughts not have a place?

Hi PKRV, Thanks for your comments and I do highly appreciate your input. Although I do agree with you like I mentioned before we need to wait and see. I think there are quite a few people out there "waiting to see" what is next. May be we are forgetting that the Thai government has to look in to problems of Thai people before they actually consider foreigners.

I do agree with your comments on the 51/49 % rule. What we call "Freehold" should be a clear cut freehold IMO. Let's "wait and see".

Edited November 27, 2009 by benchmark

[Langsuan Man]

In the Sattehip land office there were refusals to register land in a nominee company and I have heard from a local lawyer that it has started in the Pattaya land office also to investigate nominee Thai companies. So there is an issue here.

I am not sure why you haven't experienced it in your jurisdiction yet. Has anyone else experienced similar refusals any where else?

Honestly, it is not possible to recommend a client to register a land in a nominee company until we find out more about a clear policy regarding this issue.

I sure don't want to argue with our esteemed board member benchmark but if this is true (refusal to register land in a nominee company) then why is every Real Estate office in Pattaya not closed down ?

Just look in the window of any of them and the vast majority of property advertisements are for houses ( (as is Benchmark's web site) and they surely couldn't survive on condo sales alone

[thaiwanderer]

From my part in Khanom I haven't seen any slowdown in the land sales .... most land I sell is freehold with the foreign buying the land in his wife's or his Thai Limited Company's name....only a few foreigners have bought leasehold.....

In the Sattehip land office there were refusals to register land in a nominee company and I have heard from a local lawyer that it has started in the Pattaya land office also to investigate nominee Thai companies. So there is an issue here.

I am not sure why you haven't experienced it in your jurisdiction yet. Has anyone else experienced similar refusals any where else?

Honestly, it is not possible to recommend a client to register a land in a nominee company until we find out more about a clear policy regarding this issue.

It is always POSSIBLE to recommend anything but it would take a change of the land code for a legitimate business to RECOMMEND a nominee structure.

There will never be a policy that can be relied on that the land code will be ignored.

A client can make up their own mind on the basis of good advice of the relative risks of the different options which includes historical non-enforcement and tolerance of illegal structures but to make the leap from that to 'things will always be thus' is a step too far imho that too many other 'professional advisors' make.

Typically those advisors make their own mind up about what is likely and then present their conclusion only as representing the status quo with little or no indication it's only an *opinion* or how that opinion was formed.

(* = and unfortunately all too often an opinion from an advisor with little or no qualifications, real experience or professional indemnity)

[LennyW]

In the Sattehip land office there were refusals to register land in a nominee company and I have heard from a local lawyer that it has started in the Pattaya land office also to investigate nominee Thai companies. So there is an issue here.

I am not sure why you haven't experienced it in your jurisdiction yet. Has anyone else experienced similar refusals any where else?

Honestly, it is not possible to recommend a client to register a land in a nominee company until we find out more about a clear policy regarding this issue.

I sure don't want to argue with our esteemed board member benchmark but if this is true (refusal to register land in a nominee company) then why is every Real Estate office in Pattaya not closed down ?

Just look in the window of any of them and the vast majority of property advertisements are for houses ( (as is Benchmark's web site) and they surely couldn't survive on condo sales alone

I think you will find that this is for the creation of NEW companies for the purpose of buying a property, with an existing company should not be an issue as you would usually just be changing the name of a director.

[johnnyk]

Two classes of falang owners here IMO.

One is int'l. business like hotels, factories etc. They invest big money and create jobs. Thailand must be competitive to attract and keep them so they aren't going to do anything to intentionally alienate them.

Second owner group are individual falangs. Thailand doesn't really give a <deleted> and likely regards them as being mainly drunks who require adult supervision. Take their pennies but don't let them have much that is substantial. Don't look for any improvement to land laws there.

[Langsuan Man]

I think you will find that this is for the creation of NEW companies for the purpose of buying a property, with an existing company should not be an issue as you would usually just be changing the name of a director.

Sounds plausible LennyW maybe I don't know enough about how and where these "companies" are registered and their connection with the Land Office

There is an interesting article in today's Spectrum in the " English language paper that we dare not mention here" that covers this issue

[oracle]

From my part in Khanom I haven't seen any slowdown in the land sales .... most land I sell is freehold with the foreign buying the land in his wife's or his Thai Limited Company's name....only a few foreigners have bought leasehold.....

In the Sattehip land office there were refusals to register land in a nominee company and I have heard from a local lawyer that it has started in the Pattaya land office also to investigate nominee Thai companies. So there is an issue here.

I am not sure why you haven't experienced it in your jurisdiction yet. Has anyone else experienced similar refusals any where else?

Honestly, it is not possible to recommend a client to register a land in a nominee company until we find out more about a clear policy regarding this issue.

It is always POSSIBLE to recommend anything but it would take a change of the land code for a legitimate business to RECOMMEND a nominee structure.

There will never be a policy that can be relied on that the land code will be ignored.

A client can make up their own mind on the basis of good advice of the relative risks of the different options which includes historical non-enforcement and tolerance of illegal structures but to make the leap from that to 'things will always be thus' is a step too far imho that too many other 'professional advisors' make.

Typically those advisors make their own mind up about what is likely and then present their conclusion only as representing the status quo with little or no indication it's only an *opinion* or how that opinion was formed.

(* = and unfortunately all too often an opinion from an advisor with little or no qualifications, real experience or professional indemnity)

Thai politics is it about nominee shareholders or nominee land owners. For nominee shareholders the land department does not care as they say that's the responsibility of the Ministry of Commerce to check. Other than the registration rules which are crap, as it only checks in the moment of registration, the land department does not care if shares are transferred after registration in a company that owns land as long as it does not exceed 49%. The Ministry of Commerce does not really care either as they must forward any case in which the expect nominees to the police, but the police does nothing because the government does not want to do anything. So nothing goes to court and here is no nominee problem other than in theory. Likely, and this is the only option, if the government wants they change the foreigner definition, maybe, as this would affect control in the company and directors must be re-elected every year, so foreigners wont be eligible for re-election.

For the time being there is nothing to worry It's only speculation what a nominee is and when it would become illegal, but when it all changes I'm sure it won't be as bad as many think'

[chiang mai]

Two classes of falang owners here IMO.

One is int'l. business like hotels, factories etc. They invest big money and create jobs. Thailand must be competitive to attract and keep them so they aren't going to do anything to intentionally alienate them.

Second owner group are individual falangs. Thailand doesn't really give a <deleted> and likely regards them as being mainly drunks who require adult supervision. Take their pennies but don't let them have much that is substantial. Don't look for any improvement to land laws there.

The other point to add here is that big business has no problems with the Bank of Investment rules whereby investing Baht 40 mill for ten years allows the farang to OWN one rai of land in his/her own name.

[chiang mai]

Two classes of falang owners here IMO.

One is int'l. business like hotels, factories etc. They invest big money and create jobs. Thailand must be competitive to attract and keep them so they aren't going to do anything to intentionally alienate them.

Second owner group are individual falangs. Thailand doesn't really give a <deleted> and likely regards them as being mainly drunks who require adult supervision. Take their pennies but don't let them have much that is substantial. Don't look for any improvement to land laws there.

The other point to add here is that big business has no problems with the Bank of Investment rules whereby investing Baht 40 mill for ten years allows the farang to OWN one rai of land in his/her own name.

[thaiwanderer]

From my part in Khanom I haven't seen any slowdown in the land sales .... most land I sell is freehold with the foreign buying the land in his wife's or his Thai Limited Company's name....only a few foreigners have bought leasehold.....

In the Sattehip land office there were refusals to register land in a nominee company and I have heard from a local lawyer that it has started in the Pattaya land office also to investigate nominee Thai companies. So there is an issue here.

I am not sure why you haven't experienced it in your jurisdiction yet. Has anyone else experienced similar refusals any where else?

Honestly, it is not possible to recommend a client to register a land in a nominee company until we find out more about a clear policy regarding this issue.

It is always POSSIBLE to recommend anything but it would take a change of the land code for a legitimate business to RECOMMEND a nominee structure.

There will never be a policy that can be relied on that the land code will be ignored.

A client can make up their own mind on the basis of good advice of the relative risks of the different options which includes historical non-enforcement and tolerance of illegal structures but to make the leap from that to 'things will always be thus' is a step too far imho that too many other 'professional advisors' make.

Typically those advisors make their own mind up about what is likely and then present their conclusion only as representing the status quo with little or no indication it's only an *opinion* or how that opinion was formed.

(* = and unfortunately all too often an opinion from an advisor with little or no qualifications, real experience or professional indemnity)

Thai politics is it about nominee shareholders or nominee land owners. For nominee shareholders the land department does not care as they say that's the responsibility of the Ministry of Commerce to check. Other than the registration rules which are crap, as it only checks in the moment of registration, the land department does not care if shares are transferred after registration in a company that owns land as long as it does not exceed 49%. The Ministry of Commerce does not really care either as they must forward any case in which the expect nominees to the police, but the police does nothing because the government does not want to do anything. So nothing goes to court and here is no nominee problem other than in theory. Likely, and this is the only option, if the government wants they change the foreigner definition, maybe, as this would affect control in the company and directors must be re-elected every year, so foreigners wont be eligible for re-election.

For the time being there is nothing to worry It's only speculation what a nominee is and when it would become illegal, but when it all changes I'm sure it won't be as bad as many think'

It's not at all speculation what a nominee is, though selective enforcement or otherwise is an issue any prudent investor will consider.

I however personally dislike any so called professionals of which there are many dressing up opinions of which way the wind will blow as anything over than a coin toss.

[johnnyk]

Two classes of falang owners here IMO.

One is int'l. business like hotels, factories etc. They invest big money and create jobs. Thailand must be competitive to attract and keep them so they aren't going to do anything to intentionally alienate them.

Second owner group are individual falangs. Thailand doesn't really give a <deleted> and likely regards them as being mainly drunks who require adult supervision. Take their pennies but don't let them have much that is substantial. Don't look for any improvement to land laws there.

The other point to add here is that big business has no problems with the Bank of Investment rules whereby investing Baht 40 mill for ten years allows the farang to OWN one rai of land in his/her own name.

Add the land cost to that and its a pretty expensive way to own land in an unstable environment.

In western terms it amounts to about 25,000 baht/m2 (about US$800/m2) PLUS land cost. PLUS building and infrastructure costs. Fuhgeddaboudit.

Edited November 29, 2009 by johnnyk

[oracle]

It's not at all speculation what a nominee is, though selective enforcement or otherwise is an issue any prudent investor will consider.

I however personally dislike any so called professionals of which there are many dressing up opinions of which way the wind will blow as anything over than a coin toss.

I'm not selling this, but fact is that many foreigners own property trough companies, and as it is now, the nominee problem for existing companies is only in theory, nothing changed in practice. Nothing is happening and for existing companies it's not different than it was in 2005, when most TV members were selling company ownership structures.

There is no need to panic.

[pkrv]

The other point to add here is that big business has no problems with the Bank of Investment rules whereby investing Baht 40 mill for ten years allows the farang to OWN one rai of land in his/her own name.

Hi chiang mai - This is not my area but I do scan the threads - This has to be cleared by someone in goverment? - I don't think this has happened in many, many, years - I Think Naam may have tried this and commented on it in the past.

I THINK the answer is YES but is actually NO.

Edited December 1, 2009 by pkrv

[thaiwanderer]

The other point to add here is that big business has no problems with the Bank of Investment rules whereby investing Baht 40 mill for ten years allows the farang to OWN one rai of land in his/her own name.

Hi chiang mai - This is not my area but I do scan the threads - This has to be cleared by someone in goverment? - I don't think this has happened in many, many, years - I Think Naam may have tried this and commented on it in the past.

I THINK the answer is YES but is actually NO.

Has and does happen but is nothing more than bragging rights since tbh the restrictions are such that its less attractive than even using a nominee company or whatever is the current flavour of farang 'ownership' according to real estate alchemists.

[pkrv]

The other point to add here is that big business has no problems with the Bank of Investment rules whereby investing Baht 40 mill for ten years allows the farang to OWN one rai of land in his/her own name.

Hi chiang mai - This is not my area but I do scan the threads - This has to be cleared by someone in goverment? - I don't think this has happened in many, many, years - I Think Naam may have tried this and commented on it in the past.

I THINK the answer is YES but is actually NO.

Has and does happen but is nothing more than bragging rights since tbh the restrictions are such that its less attractive than even using a nominee company or whatever is the current flavour of farang 'ownership' according to real estate alchemists.

Hi thaiwanderer - Can you point to a specific example? I can't. I am not being rude, I am just seeking information. I don't think anyone has been able to do this in some time, but I am happy to stand corrected if proved wrong