New Draconian Property Law To Deport Foreigners Who "Owns" Land Illegally

[Naam]

Most of you are crazy ...... If people have broken the law to buy land they know they shouldn't own , it should be taken and they should be deported , the Thai people who are accomplices should be held accountable as well , they won;t be we know that but people who argue that people who break the law should not be held accountable are crazy.

I say GREAT take thier land put it up for auction and deport them ...... boo hoo for you , don't break the law next time.

spot on! and before they are deported they should be fined 100 Baht that envious poor boys like you can afford an additional Chang on the steps of a 7/11 and a noodle soup from a street vendor.

no one will ever accuse you of being humble.

because i would consider it an insult and demand satisfaction, e.g. "coming sunday at dawn, my front garden, heavy sabres, no body protection!"

[Naam]

With regard to houses I don't know why they don't do what they do in the English Channel Islands and have two separate property markets. There is one for Channel Islanders and one for incomers. Incomers can't buy the locals property and the locals can't buy the incomers. Starting prices in the incomers market used to be £1m, probably more now, but it works fine there, and could do here, but paranoia is endemic among the Thai elite.

Malaysia has a similar legislation, even with the provision that if the property can be bought by both Malays and foreigners the foreign buyer has to pay a surcharge. Thailand would only lose by confiscating immobile property and deport foreigners. fair would be a property tax for foreigners at a much higher rate than Thai citizens would have to pay. but then property tax is virtually unknown in Thailand.

[PattayaPhom]

Most of you are crazy ...... If people have broken the law to buy land they know they shouldn't own , it should be taken and they should be deported , the Thai people who are accomplices should be held accountable as well , they won;t be we know that but people who argue that people who break the law should not be held accountable are crazy.

I say GREAT take thier land put it up for auction and deport them ...... boo hoo for you , don't break the law next time.

Is that any law and people should be deported, or just property purchase by company?...

[electau]

If you do not have title to a property or land you do not legally own it. Title here means a title deed (chanote) in your name (ie the name in your passport).

If you were asked to provide proof of ownership what document(s) would you supply? The title deed is your proof.

[fredKroket]

I notice they say about land being held in a nominee company, but there is no mention about condos being owned the same way? It's not like a condo owner is going to set up a paddy field in his front room is it?

With condo's no problem.It's the land they're talking about.

Foreigners can buy and own condo's for 100% legally, even on a tourist Visa.

As long as the percentage of the whole condominium (building or complex) ownership is not exceeding 49% owned by foreigner.

Foreigners also buy condos in company name when the foreign ownership is exhausted.

[Rancid]

I thnk all governments like to roll out a version of this as it is good for domestic consumption. Don't think they really could care less about the odd farang with a company owned house in a moobaan. This is about farmland or resorts and the fear that foreigners like Saudis etc are buying it up. I wouldn't go losing any sleep at this stage...

[23962323]

""ring- fenced" is a product of your phantasy" LOL just like your predictions for the Euro

Like it or not,the statement comes to one thing, go on have a shot.

[electau]

A foreign national cannot own ( have title to) land in Thailand.

There is one exception to this under BOI investment rules.

A foreign national can have a lease on land in Thailand.

The title to the land is retained by a individual Thai person or entity.

This can be a company with 51% Thai shareholders. The Thai company has title to the land not the foreign national, they ( the foreign national) will lease or rent the land from the Thai company.

Naam has placed a very good post # 523 on the subject.

[cdnvic]

Unsubstantiated claims removed. When making these assertions, please provide a source.

[Naam]

""ring- fenced" is a product of your phantasy" LOL just like your predictions for the Euro

Like it or not,the statement comes to one thing, go on have a shot.

please elaborate what prediction i made as far as the €UR is concerned. i have also no idea what statement you are referring to.

[electau]

Here is a link to information on private limited companies.

http://www.boi.go.th/index.php?page=types_of_business_organizations_02_limited_companies

[Arkady]

well in Spain even though local government approved building lots of owners have had to pull their property down because central government said it was illegal so if that can happen in a western country its IMO more likely to happen here particularly with company route. My wife owns lots of land and condos in her own name not company but they could even try and go for that but then she can just divorce me or we put it in our Thai children's names. Cant see much happening anyway to anyone but I would not be sorry if all those who cant/wont trust their wives found company route ended with them trusting thai government more and loosing it.

Divorcing your wife would not help. The ministerial regulations make no distinction between Thais living with a common law spouse or a legally married spouse. In either case both parties need to sign the necessary declaration at the Land Office when the Thai party acquires any land. Without that declaration the Thai spouse could potentially be regarded as a nominee, if he or she cannot show that they acquired the funds to purchase the land independently of their foreign partner. The wording in the ministerial regulation regarding foreign cohabitees is in fact virtually unchanged from the pre-1999 regulation that prohibited Thai women from buying land at all, if they had a foreign husband or were cohabiting with a foreigner. This the only instance I know of where Thai law actually recognises the concept of common law marriage.

[Arkady]

Re the company route. It is clear that it would be a simple matter to investigate all companies with foreign involvement owning land, if the will to do so ever emerged and the funding and staff were made available. They just need to screen the companies database mechanically to match all companies with foreign shareholders or directors that have buildings and land on their balance sheets. A further manual check would eliminate companies with substantial business operations that legitimately own land as part of the business. Then they could investigate the remaining companies that have negligible or non-existent business operations and question the Thai shareholders and directors about their sources of funds and the rationale for company to invest in a villa with infinity pool and let the minority foreign shareholder or director live in it for a peppercorn or nil rent, whilst doing no business. Foreign directors could also be handed over to Immigration and the Labour Ministry for prosecution for working without work permits. If they wanted to dig deeper, they could screen for any company, even without foreign shareholders or directors, that owns land over a certain value, particularly in tourist resorts, and conducts no significant business to see if the Thai shareholders and directors really bought the land and then did nothing with it or are nominees for foreigners. Even so, that would be an extreme situation and having a company with no foreign involvement at at all on paper would be safer from prying eyes but more risky in terms of being ripped off by the nominees or being caught short if one of them suddenly died.

Personally for those without Thai spouses contemplating buying property I think the only sensible approach is either to buy a condo that you can own in your own name or rent and invest your funds elsewhere.

Edited August 10, 2012 by Arkady

[johnnyk]

I agree they could do all this Arkady.

But given the Thai gifts for organization and follow-up I think it highly unlikely for two reasons (in addition to your note about hiring staff etc).

1) I suspect that a great many government records are in the form of mountains of paper held in warehouses. It would take an army of drones a long time to go through this.

2) For most Thais what is past is past and they tend to forget about it. I don't see them exhuming paper from years gone by and poring over it line-by-line.

That said, my feeling is previous transactions are probably grandfathered but a closer eye is being brought to bear on new/current deals.

Edited August 10, 2012 by johnnyk

[johnnyk]

An important distinction: foreigners cannot own land in THEIR OWN NAME.

Land can be owned by a legal company having a legal share structure with two classes of shares, just lke in the west.

Just like in the west a minority shareholder holding "ordinary shares", legal in Thai law, (not "preference shares") can control the company and control is what matters.

If you have a company, file statements and pay tax. That's how to keep governments happy and quiet.

Edited August 10, 2012 by johnnyk

[klikster]

there will be some asses twitching over this one,,,lol

Especially a forum down Hua Hin way?

[klikster]

An important distinction: foreigners cannot own land in THEIR OWN NAME.

Land can be owned by a legal company having a legal share structure with two classes of shares, just lke in the west.

Just like in the west a minority shareholder holding "ordinary shares", legal in Thai law, (not "preference shares") can control the company and control is what matters.

If you have a company, file statements and pay tax. That's how to keep governments happy and quiet.

I think that comes down to the 'purpose' of the company rather than the structure. I was told personally by a recently retired Permanent Secretary that a company set up for the sole purpose of owning land is illegal.

It goes something like "One Thai law cannot contradict another Thai law".

[klikster]

Re the company route. It is clear that it would be a simple matter to investigate all companies with foreign involvement owning land, if the will to do so ever emerged and the funding and staff were made available. They just need to screen the companies database mechanically to match all companies with foreign shareholders or directors that have buildings and land on their balance sheets. A further manual check would eliminate companies with substantial business operations that legitimately own land as part of the business. Then they could investigate the remaining companies that have negligible or non-existent business operations and question the Thai shareholders and directors about their sources of funds and the rationale for company to invest in a villa with infinity pool and let the minority foreign shareholder or director live in it for a peppercorn or nil rent, whilst doing no business. Foreign directors could also be handed over to Immigration and the Labour Ministry for prosecution for working without work permits. If they wanted to dig deeper, they could screen for any company, even without foreign shareholders or directors, that owns land over a certain value, particularly in tourist resorts, and conducts no significant business to see if the Thai shareholders and directors really bought the land and then did nothing with it or are nominees for foreigners. Even so, that would be an extreme situation and having a company with no foreign involvement at at all on paper would be safer from prying eyes but more risky in terms of being ripped off by the nominees or being caught short if one of them suddenly died.

Personally for those without Thai spouses contemplating buying property I think the only sensible approach is either to buy a condo that you can own in your own name or rent and invest your funds elsewhere.

That 20% of property value reward for reporting violations may help a bit.

[klikster]

A foreign national cannot own ( have title to) land in Thailand.

There is one exception to this under BOI investment rules.

A foreign national can have a lease on land in Thailand.

The title to the land is retained by a individual Thai person or entity.

This can be a company with 51% Thai shareholders. The Thai company has title to the land not the foreign national, they ( the foreign national) will lease or rent the land from the Thai company.

Naam has placed a very good post # 523 on the subject.

A foreign BOI Promoted company that has the right under its promotional priviledges to buy land for the purposes of doing business on that land is considered a Thai company. When the company no longer qualifies under the BOI privileges, (or they elect to sell) they must dispose of the land within a period of time by selling to a Thai person or Thai company.

[lovetotravel]

Re the company route. It is clear that it would be a simple matter to investigate all companies with foreign involvement owning land, if the will to do so ever emerged and the funding and staff were made available. They just need to screen the companies database mechanically to match all companies with foreign shareholders or directors that have buildings and land on their balance sheets. A further manual check would eliminate companies with substantial business operations that legitimately own land as part of the business. Then they could investigate the remaining companies that have negligible or non-existent business operations and question the Thai shareholders and directors about their sources of funds and the rationale for company to invest in a villa with infinity pool and let the minority foreign shareholder or director live in it for a peppercorn or nil rent, whilst doing no business. Foreign directors could also be handed over to Immigration and the Labour Ministry for prosecution for working without work permits. If they wanted to dig deeper, they could screen for any company, even without foreign shareholders or directors, that owns land over a certain value, particularly in tourist resorts, and conducts no significant business to see if the Thai shareholders and directors really bought the land and then did nothing with it or are nominees for foreigners. Even so, that would be an extreme situation and having a company with no foreign involvement at at all on paper would be safer from prying eyes but more risky in terms of being ripped off by the nominees or being caught short if one of them suddenly died.

Personally for those without Thai spouses contemplating buying property I think the only sensible approach is either to buy a condo that you can own in your own name or rent and invest your funds elsewhere.

That 20% of property value reward for reporting violations may help a bit.

If ever turned into law. Hot air regarding this has been blowing for many years. Nothings happened so far. And with a souring economy and a growing budget deficit, doubt anything will any time soon. Plus, PTP is only focused on "reconciliation". Right?

[McMagus]

Clearly there is a simple answer. Every foreigner in LOS goes to Teko Lotah and buys a big shovel. Next time they are out and about dig up a bit of Thailand and when returning to their 'old country' deposit it there. Every one keep doing this, keep doing this for years and lo and behold, after a time, we have a little bit of Thailand all around the world. Problem solved.

[thaibeachlovers]

Clearly there is a simple answer. Every foreigner in LOS goes to Teko Lotah and buys a big shovel. Next time they are out and about dig up a bit of Thailand and when returning to their 'old country' deposit it there. Every one keep doing this, keep doing this for years and lo and behold, after a time, we have a little bit of Thailand all around the world. Problem solved.

Good idea, LOL, but don't take it back to Aussie or New Zealand. If they found it on you, there would be hell to pay for trying to import forign soil that might have harmful organisms in it.

[johnnyk]

An important distinction: foreigners cannot own land in THEIR OWN NAME.

Land can be owned by a legal company having a legal share structure with two classes of shares, just lke in the west.

Just like in the west a minority shareholder holding "ordinary shares", legal in Thai law, (not "preference shares") can control the company and control is what matters.

If you have a company, file statements and pay tax. That's how to keep governments happy and quiet.

I think that comes down to the 'purpose' of the company rather than the structure. I was told personally by a recently retired Permanent Secretary that a company set up for the sole purpose of owning land is illegal.

It goes something like "One Thai law cannot contradict another Thai law".

That's correct, if it was set up simply to own land.

But the company can actually do legit business as laid out in the company articles which state the reason for the company. Comply with tax laws etc. and if the company is actively doing business and paying tax I don't think it's a worry.

[Khun Jean]

But the company can actually do legit business as laid out in the company articles which state the reason for the company. Comply with tax laws etc. and if the company is actively doing business and paying tax I don't think it's a worry.

Still if the 51% can not produce proof that they used their own money then it is because of using nominees illegal.

Now how many foreigners that own 49% have their company just for owning the land and use 51% nominees and do 'legitimate' business renting the single house to 'surprise, suprise' the managing director of the company. I bet more than 90%.

And those have to start worrying about how to solve that problem. Hint.. it will cost you money.

[klikster]

But the company can actually do legit business as laid out in the company articles which state the reason for the company. Comply with tax laws etc. and if the company is actively doing business and paying tax I don't think it's a worry.

Still if the 51% can not produce proof that they used their own money then it is because of using nominees illegal.

Now how many foreigners that own 49% have their company just for owning the land and use 51% nominees and do 'legitimate' business renting the single house to 'surprise, suprise' the managing director of the company. I bet more than 90%.

And those have to start worrying about how to solve that problem. Hint.. it will cost you money.

+1

And, so you have a company doing business. But does that company need to own land on which a house is subsequently built in order to do that business?

Probably not .. oops!

[thaifamilyguy]

This has been a very good temperature check on this issue, bottom line for me at the moment is that

1. buying property in Thailand has a cap based on risk vs. value. Given property values worldwide some of what I have looked at here has me thinking there is a sweet spot there that I would be willing to put funds at risk both just for personal enjoyment and the potential that might beat other investment options right now over next 10 years.

2. Second, would be best to take over an existing corporate structure to leave the title undisturbed and investigate further unsafruct/altenative structures a bit more. But now is not the time to start an entirely new structure and be down at the property office! I am not sure if that means I am limiting myself to expat sellers just yet.

3. The 30 year lease is not entirely a bad thing, could be marketable enough if looked at it as a 10 year window and the right place (and right price). At minimum any purchase would include a 30 year lease, one approach might if a Thai Seller, do 30 year lease in own name on day one, get registered, then on day two purchase with company structure. Might bring down price of property as one would think it reduced by 30 year lease, but separately the lease would be the insurance as fully "legal" even if company ran into trouble. In selling, can always sell the lease/company as a bundle.

I can say based on 20 years around Asia, Thailand does not have legitimacy in my mind to justify respect of whatever rules they choose to enforce. When my family gets treated "by the rules" at immigration, maybe I'lll have to reconsider. Corruption here is institutional and enforcement is selective. Thus calculations are personal risk assessments not moral obligations.

To all those that have Thai spouses and so do not have to deal with this issue, good for you, but I wonder what you would be doing if you didn't?

Thanks to all those participating in the thread.

wjs

[Khun Jean]

If i did not have a Thai spouse i would buy a condominium. Oh wait, i still did that.

[BarryM]

I had the pleasure of a former Democrat Deputy PM staying at an apartment I owned as a favour to him in the UK. I asked him about buying land in Thailand to build and he confirmed that setting up a Thai company was the normal route.

The powers here are fully aware of the "loophole" and have accepted it for decades. To renege on it now would be a Zimbabwean type mistake.

Unfortunately, I can easily forsee things moving that way in a few years as the elites clutch at straws to retain their monopolies and power bases. The Pol Pot power grab in Cambodia took place in a country schooled in western ideas of "rule of law". There may be trouble ahead if the Thais lose an umpire that most of the populace have respect for.

[kirkieb]

What a great source of real responses. Nothing beats experience and the many responses show some real pain endured. Have been hit myself only today and found how pointless it is trying to complain or get back a deposit on a property that was in Thai and signed by my Thai wife. Even the lawyers (English) tell me it will cost a fortune to get back my deposit. In that said I had my eyes wide open at the time and asked for a translated contract at the start and was promised it over and over before wife would sign. On the day all we had was my wife reading the contract out which by most countries standards covered nothing including returning deposits etc. Only promises from the Manager Verbally. I'm so glad I finally got the damn thing translated independently. Yes I wish my wife did not sign but she assured me it was well written and was a good deal. ARGHHHH Follow your Gut fellas. Its cost 100 k Baht and that sux as I'm on a pension but its a good lesson and maybe I was too stupid to believe anything here is more than a grab for cash. I choose to now keep my cash in Oz rent, and just ensure beer o'clock comes around. Eyes wide open fellas . Cynical maybe but supreme optimist and think the Government here need tourists and visa runs are worth a fortune to this country, just with ASEAN happening in two years maybe the borders will be further.