Commerce Ministry To Inspect Foreign Shareholding In Thailand Later In August

[jerrysteve]

The next coup should scare investors way!

[jerrysteve]

It is rather laughable to see the Thai powers to be believe they are somekind of legend in their old mine. A closed door policy

only goes to close the door on outside investment.

It won't take too long for Burma to over take Thailand in many areas including but not limited to their tourist piece of the pie.

While Thailand has a difficult time making decisions, the world is passing them by.

[ableguy]

Well if they actually did enforce the law I would guess that over 50% of foreign operated business would be shut down LOL - especially all those Scuba Diving shops operating in Pattaya and Puket that are really just fronts for Visa's, they don't actually turn a real profit and almost all cheat on taxes not reporting true income - this would go for most of the bars too -

I think they should do it, lot of the crap foreigners would have to leave Thailand, up the standard a little for the expats that actually live here and are good people- not that this would get ride of all the bad, thats impossible. I'm sure they will just take some tea money as is usual to look the other way. Another way to line their pockets.

Dont forget its not just companies such as scuba shops, what they are after is home owners who set uo companies just to buy a house and live here, scun farangs again.

[BobbyLambo]

If they actually enforce this (which i don't think they could), I'll bet Burma,Cambodia and Vietnam would be excitedly rubbing their hands together.

[rubl]

How does this relate to 'Free Trade Agreements' assuming there may be a relation?

[965purity]

The speculation that it will take an impossibly long time to search through 27,000 company registrations is completely unfounded. When dealing with a process that involves intensive human resources at a given stage, you automate the rest of the work first, look for indicators, then turn the humans loose on the most likely offenders. If you've picked your indicators correctly, the 10% most likely candidates will usually yield 50% of the offenders.

This afternoon I borrowed a copy of the Department of Business Development company registration database. It's painfully simple to start lists of companies with potential irregularities using some key data:

• Bare minimum capitalization of 2,000,000 baht to minimize fees at company founding and enable 1 work permit.
  
• Precisely hitting a minimum Thai shareholder ratio of 51% (or 61% which has been more common where land is involved); this usually based on the advice of the organization that assists with the company founding.
  
• The opposite case of 99% Thai shareholding in a lightly capitalized business; likely indicative of a preferred share structure.
  
• A single director with a foreign name.
  
• Clustering of an unlikely number of businesses at a single address.
  
• Clustering of the foregoing under certain business classification codes, esp. 70101 Selling or Renting of Own Real Estate.
  
• Chronically making small losses entirely attributable to selling and administration expenses with no income.
  

This isn't to say that one indicator means much on its own. But a registered business that ticks 3 or more of these boxes would go to the top of the stack for further scrutiny.

You might expect there to be at least 10% of the 27,000 total that would then be considered highly questionable, leaving something on the order of 16,200 Thai shareholders or less to be investigated along with 2,700 addresses.

Were we to take the investigation further, the next steps are obvious. Check which business addresses are in locations which are ordinarily residential, i.e. a condominium or housing estate.

Beyond that, you'd want to pull the names and ID numbers of the Thai shareholders in the enterprise, then crosscheck those in the Tax Department and Social Security offices to ascertain if the Thai person concerned reported sufficient income and paid sufficient social tax in the three to five years prior to signing on as a shareholder of the company concerned.

Those that have not, and it's likely to be a majority, can then be given the opportunity to prove that they contributed the required percentage of the value of their shares, either as cash or as property. One expects no such proof would be forthcoming, and the company registration is terminated.

It may have seemed like a fine idea at the time to choose as your nominee shareholders your ex-bargirl wife or girlfriend, her layabout brother, two motorcycle taxi pilots -- all people who've never paid income taxes or even held formal employment -- and the secretary of the company that did the start-up (whose name will suspiciously appear as a shareholder on dozens of companies when she barely make enough to pay the rent on her meagre apartment).

And it may have seemed like a good idea at the time to just blindly follow that business start-up expert who assured you nothing would go wrong in lieu of doing your own research and discovering that nominee shareholders were and long had been illegal.

Company, residence, work permit and visa... all gone, for no better reason than thinking one could outsmart the system indefinitely. Of course nobody plans to fail, they just fail to plan. Som nam naa...

[sunkist]

27,000 Companies to investigate, it'll take them at least 30 years to get through them all!

And with what aim? Is it their intention to drive all foreign investment out of Thailand? If so, this is the most effective way of achieving that aim!

Cut off their nose to spite their face.

[technologybytes]

There is no solution, the best you can do is sell up and hope to get as much of your money back as possible.

Us expats rarely make any real contribution to the economy of Thailand and it's naive to assume otherwise. We do manage to drive up property prices in some areas and mostly we spend our money in establishments which are owned or controlled by overseas companes etc.

I'm sure most Thai's wouldn't miss us as long as the tourist trade continues, except a lot of essan families of course.

Sorry I don't buy that. Sure property prices rise in some places.

Most of my cash goes to Thai owned companies, been like that for years.

I have been a net profit for the Thai economy and most of my friends are too.

I said "rarely" and I stand by that..

[Pops]

Are there elections coming up ??? Or any other reason that some politicians have to activate the nationalistic anti foreign sentiment perhaps ???

Maybe to divert attention from different matters ???

One thought, they would use all resources available fighting corruption, but seems like foreign share holder-ship within Thai companies is more important.

Wow, Thailand keeps amazing me

[Pops]

There is no solution, the best you can do is sell up and hope to get as much of your money back as possible.

Us expats rarely make any real contribution to the economy of Thailand and it's naive to assume otherwise. We do manage to drive up property prices in some areas and mostly we spend our money in establishments which are owned or controlled by overseas companes etc.

I'm sure most Thai's wouldn't miss us as long as the tourist trade continues, except a lot of essan families of course.

Sorry I don't buy that. Sure property prices rise in some places.

Most of my cash goes to Thai owned companies, been like that for years.

I have been a net profit for the Thai economy and most of my friends are too.

I said "rarely" and I stand by that..

It is not the financial contribution Foreign owned companies make to Thai economy that needs to be discussed.

It is the in-equality between Expat and Thai owned companies that is at discussion.

If we would all be judged by our contribution to Thai economy, then 90 % of Thai owned small businesses that in most cases do not even have a decent company or pay their tax, would rate very poorly as well.

Foreigners are excluded from al kinds of businesses in Thailand to start with and then also cannot even own the businesses they set up with their own cash.

That is what is at discussion.

If that rule would apply in some of our home countries, every foreigner living there, would be demonstrating on the street with a whole battalion of local supporters behind them.

Just look at it from that perspective.

It is just not a fair situation.

Us driving up property prices in certain areas only emphasizes this inequality, for why should property prices go up or down in the first place ?

Property prices should be driven purely by availability and demand and not by who demands the property, or am I seeing it wrong ?

[BarryM]

Many condo developers are foreign owned

Presumably anyone buying off plan is now even more likely to lise their money