Phuket office identifies 82 'foreign-owned' businesses suspected of using Thai nominees

[RogueLeader]

As Thailand grows in confidence and its attitude <nudgewink> aided by changes in leadership </nudgewink> hardens towards tourists, eventually there's going to be an outright land-grab. Everyone living in Thailand knows to expect no legal protection from the police or the judiciary. The clock is ticking. You know what to do.

[NomadJoe]

what is the problem? If they have the money and time to make investment abroad, why not? Even if they generate new jobs for thai people? Really do not understand people sometime. ;( Anyway rush away people, DSI is coming.. LOL.

Because these illegal companies will put a Thai person as the 51% share holder and pay that person a minuscule salary, if any, for the right to do so. These companies will then pay tax on salaries to Thai employees which don't exist in order to fulfill the requirements needed by the foreign owners or employees for the company to get a work permit.

The article is describing the type of company set up by a particular long standing law office in Phuket which is well known. (Several offices do this now) . The owner of the company is well connected and has been caught doing very illegal things before yet he has never done time or been disbarred, and he is still in business and business appears to be booming. I imagine we will weather this latest storm just fine.

[eezergood]

what is the problem? If they have the money and time to make investment abroad, why not? Even if they generate new jobs for thai people? Really do not understand people sometime. ;( Anyway rush away people, DSI is coming.. LOL.

Because these illegal companies will put a Thai person as the 51% share holder and pay that person a minuscule salary, if any, for the right to do so. These companies will then pay tax on salaries to Thai employees which don't exist in order to fulfill the requirements needed by the foreign owners or employees for the company to get a work permit.

The article is describing the type of company set up by a particular long standing law office in Phuket which is well known. (Several offices do this now) . The owner of the company is well connected and has been caught doing very illegal things before yet he has never done time or been disbarred, and he is still in business and business appears to be booming. I imagine we will weather this latest storm just fine.

+1

a few scape goats will be made then business as usual for the high season

[richard10365]

I think the guys in Phuket should look at the ASEAN-Korean Free Trade Agreement before they start busting down doors.

[puipuitom]

THIS is the reason, why I withdraw in 2006 all my investments in Thailand and diverted all to other origins.

In Thailand I felt welcome only as human ATM ( by 99,99 % of all Thais I encountered) , in other countries I am welcome as human.

[dudu]

THIS is the reason, why I withdraw in 2006 all my investments in Thailand and diverted all to other origins.

In Thailand I felt welcome only as human ATM ( by 99,99 % of all Thais I encountered) , in other countries I am welcome as human.

Why should Thailand sell out, when so many Thais are making a fortune from parting fools and their money??

[HOOD Robin]

I wonder . . . if this is such a bad thing for Thailand, will they crack down on the Lawyers/Accountants that facilitate this, and also the Govt. officials that ease the way also?

What am I talking about, of course they won't lol

Actually they SHOULD as those guys fill their POCKETS !

But sigh..... ALL the Thai poo yais are playing this game which seems to be NORMAL in TH...

But are they doing anything illegal under Thai law? Would not surprise me at all if they don't (or if they do for a matter of fact).

if those poo yais need money they WILL get it ! No matter if the foreigner do something legal or illegal...

[lee b]

have all the police in Thailand moves down to Phuket?? Phuket this, Phuket that.....!!

[Unwisemonkey]

What is this total paranoia Thai's exude from every pore.

Most bigoted people on the planet, foreigners can't own land because presumably they will buy up the whole country or push up prices for land (not if Thai's don't ask inflated prices in that equation).

Foreign owned businesses pay tax and vat (unlike most small Thai businesses).

Don't Thai's get it that any business legally paying taxes and salaries to anyone Thai or farang is a good thing for Thailand as that money goes straight back into the economy in not only tax but in restaurants, taxis, shopping, housing etc...

In most developed countries foreign investment is encouraged because the government's are aware of the potential increased inome that may be created.

Not Thailand.

The attitude of 'they' will steal our land and jobs amazes me.

One Thai girl, with a university degree and a straight face, once told me that 'America just wants to steal our rice and England stole our cats.'

&lt;deleted&gt;...

Of course she said it with a straight face. Have you ever listened to a lecture by any of the Eurotrash, or Self hating-American Professors teach these students at University. They teach them that we are big rich and evil empires because we protect our investments and look after our interests instead of taking a raw deal or just giving it away for free. They're not even the second or third tier (more like the 6th) of the intellectual liberal elite from the west but they are still here and spreading their mirth in academia.

[Unwisemonkey]

The thing is foreigners don't vote, so we make an easy scapegoat. I imagine, that just like in America if you make contributions to the political flavor party of the moment you'll be in good shape.

[MyFriend You]

I think they got the heading of the article wrong, it should read : "Phuket office

identifies 82 'foreign-owned' businesses suspected of NOT using Thai nominees"

I don't know how many times I have been asked to 'Incorporate' myself using a trusted Thai persons name, or a Thai Lawyers address for a nominal fee - glad I didn't do it, I'm proibably a lot poorer because of my suspiciuous attitude, but at least I ain't in the Monkey House........

[BigC]

Looks like the government don't want forangs to have safe secure business

How can a Forang own a business without having security a being the number 1 share holder???

Almost as if the government are saying we can take your money but you cannot have anything for it

[pomchop]

So easy to identify business cheaters....so difficult to identify tuk tuk and jet ski cheaters.

[ebcal]

Nimit Kangkajit walks a very tight rope once the "farangs" are identified as "Russians". Not only are they smarter, but also more used to deal illegally and push their business through without much asking.

Maybe it is time that Thailand looks towards 21st century; this might help to understand, why Bali, Cambodia, the Philippines and even Malaysia has considerably higher tourism revenue.

Somsak skinning tourists alive upon arrival at Phuket, Don Mouieauiong or Swampi will have to look for a new job/victims anyhow. I, for one, work here but would not spend my hard-earned vacation here (anymore).

I do not subscribe to illegal activities but Thais need to realize that they are not the centre of the universe. If "illegal" travel agents illeglally are in thriving (legal) business then there is a loud message in red ink on the wall of Thailand!

Bali, Cambodia, Philippines, higher tourism revenue than Thailand? Where do you see those numbers? The articles I have seen show something different. One says Thailand is #1 is SE Asia in terms of tourism revenue, although Malaysia was #1 in # of tourists. But, that was a bit old in 2007.

ANother more recent one which only shows # of tourists in 2011 and 2012, Malaysia was only a little higher than Thailand, and Thailand's year on year increase was over 16%, where Malaysia only increased 1.3%, so if that trend holds, Thailand could very well surpass Malaysia in a year or two in # of tourists and may already be more in revenue, if 2007 data still holds where amount spent per tourists was higher in Thailand than Malaysia.

In any case, Bali, Cambodia, Philippines are much lower and not higher than Thailand.

Malaysia

Malaysia is the top tourist destination in southeast Asia. About 21 million foreign visitors spent $14 billion in Malaysia in 2007. West Malaysia, which is part of the Asian mainland, includes the capital and is more economically developed. East Malaysia encompasses the northern third of the island of Borneo and includes more-secluded resort areas.

Thailand

Thailand has the second largest tourism industry in southeast Asia. About 14.5 million foreign visitors spent $15.6 billion in Thailand in 2007. Major attractions include world-class diving and watersports, archeological and religious sites, and diverse tropical flora and fauna.

Singapore

Singapore has the third largest tourism industry in southeast Asia. About 8 million foreign visitors spent $8.7 billion in Singapore in 2007. Much of the attraction is because of the dominance of English usage and the cultural diversity of Chinese, Malay, Indian, Arabic and British influences.

Indonesia

About 5.5 million foreign visitors spent $5.3 billion in Indonesia in 2007. The primary attractions are beach resorts and hotels in secluded island settings, and cultural tourism rooted in both Hindu and Islamic traditions.

Vietnam

About 4.2 million foreign visitors spent $3.5 billion in Vietnam in 2007. Tourism in Vietnam is dominated by visitors to the resorts and hotels near its capital, Hanoi, and its largest city, Ho Chi Minh City.

Philippines

About 3 million foreign visitors spent $4.9 billion in the Philippines in 2007. The culture of the Philippines has been greatly influenced by Spanish and American colonialism, contributing to its popularity with Western tourists.

[FDog]

Why crack down on the farang that owns 49%. Why not crack down on the Thai that owns 51%. Surely as the Thai is the majority shareholder they are more culpable.

[NomadJoe]

Why crack down on the farang that owns 49%. Why not crack down on the Thai that owns 51%. Surely as the Thai is the majority shareholder they are more culpable.

That's a silly question. Because they have no money, of course.

[davidstipek]

Does anyone know a business run by foreigners not using nominees?

Yes, owned by Americans which they can by treaty.

This is correct! Americans, By Treaty can Own 100% their own Company... I am sure that they will find after much searching or in any Legal Battles in Court That a Portion of these fall in this area.

Then who will save their Face... I am sure that as the wind blows... They will try to find another reason to shut down and or impose a fine on these truely Legal Enities....

Lets Watch and See...

David

[RobertAngel]

nominees is not correct word, should be proxies.

[MAJIC]

The message is loud and clear i.e "Just because you Farangs bought and paid for the business,don't think you own it"

[delh]

It's going to get very interesting to see what happens when AEC opens the doors and other members of ASEAN can come in and legally open businesses, without having to use Thai nominees, and can own 100% of it.

Vietnamese/Cambodian tuktuk drivers for example !!!

[dighambara]

Does anyone know a business run by foreigners not using nominees?

The only other choice is to open a business, find genuine Thai investors who will actually invest 51% of the capital and own 51% of the company and have effective control.

Using nominees is illegal, but everyone does it. It greases the wheels, and is the bread and butter for Thai accounting firms who actually provide the nominees, not to mention the endless kickbacks which end up in the pockets of the same people who every now and the beat their chests and threaten a crackdown.

Option 2 is legal and likely to end in ruin.

Then again it's illegal to drive on the wrong side of the road also

Anything to keep the wealthy in control, make the poor stay poor and keep the ideas of free enterprise away from the people. 50 years ago, Thailand was #1. Foreign investment was encouraged. Then Thailand introduced restrictive laws and Singapore opened their doors to foreigners and now the roles are reversed.

[stevenl]

The message is loud and clear i.e "Just because you Farangs bought and paid for the business,don't think you own it"

First of all, this has nothing to do with the colour of your skin but with nationality, second of all, do things legally and you have no problems.

[hagler]

Maybe it is time that Thailand looks towards 21st century; this might help to understand, why Bali, Cambodia, the Philippines and even Malaysia has considerably higher tourism revenue.

been to the Philippines or Cambodia lately have we?

Do you actually have any figures to back up your statement?

[dudu]

Nimit Kangkajit walks a very tight rope once the "farangs" are identified as "Russians". Not only are they smarter, but also more used to deal illegally and push their business through without much asking.

Maybe it is time that Thailand looks towards 21st century; this might help to understand, why Bali, Cambodia, the Philippines and even Malaysia has considerably higher tourism revenue.

Somsak skinning tourists alive upon arrival at Phuket, Don Mouieauiong or Swampi will have to look for a new job/victims anyhow. I, for one, work here but would not spend my hard-earned vacation here (anymore).

I do not subscribe to illegal activities but Thais need to realize that they are not the centre of the universe. If "illegal" travel agents illeglally are in thriving (legal) business then there is a loud message in red ink on the wall of Thailand!

Bali, Cambodia, Philippines, higher tourism revenue than Thailand? Where do you see those numbers? The articles I have seen show something different. One says Thailand is #1 is SE Asia in terms of tourism revenue, although Malaysia was #1 in # of tourists. But, that was a bit old in 2007.

ANother more recent one which only shows # of tourists in 2011 and 2012, Malaysia was only a little higher than Thailand, and Thailand's year on year increase was over 16%, where Malaysia only increased 1.3%, so if that trend holds, Thailand could very well surpass Malaysia in a year or two in # of tourists and may already be more in revenue, if 2007 data still holds where amount spent per tourists was higher in Thailand than Malaysia.

In any case, Bali, Cambodia, Philippines are much lower and not higher than Thailand.

Malaysia

Malaysia is the top tourist destination in southeast Asia. About 21 million foreign visitors spent $14 billion in Malaysia in 2007. West Malaysia, which is part of the Asian mainland, includes the capital and is more economically developed. East Malaysia encompasses the northern third of the island of Borneo and includes more-secluded resort areas.

Thailand

Thailand has the second largest tourism industry in southeast Asia. About 14.5 million foreign visitors spent $15.6 billion in Thailand in 2007. Major attractions include world-class diving and watersports, archeological and religious sites, and diverse tropical flora and fauna.

Singapore

Singapore has the third largest tourism industry in southeast Asia. About 8 million foreign visitors spent $8.7 billion in Singapore in 2007. Much of the attraction is because of the dominance of English usage and the cultural diversity of Chinese, Malay, Indian, Arabic and British influences.

Indonesia

About 5.5 million foreign visitors spent $5.3 billion in Indonesia in 2007. The primary attractions are beach resorts and hotels in secluded island settings, and cultural tourism rooted in both Hindu and Islamic traditions.

Vietnam

About 4.2 million foreign visitors spent $3.5 billion in Vietnam in 2007. Tourism in Vietnam is dominated by visitors to the resorts and hotels near its capital, Hanoi, and its largest city, Ho Chi Minh City.

Philippines

About 3 million foreign visitors spent $4.9 billion in the Philippines in 2007. The culture of the Philippines has been greatly influenced by Spanish and American colonialism, contributing to its popularity with Western tourists.

About 21 million foreign visitors spent $14 billion in Malaysia in 2007

About 14.5 million foreign visitors spent $15.6 billion in Thailand in 2007

Not obvious to see who makes more money from less people, those scams bring in a lot of extra pocket money....5555555....

[NamKangMan]

The message is loud and clear i.e "Just because you Farangs bought and paid for the business,don't think you own it"

That "message" should be very loud and clear to those under the belief that they have security in "owning" their land/house here in a company structure.

[DiNiro]

Do the foreigners have a case against the lawyers or agencies that set up the companies?

After all, the foreigners sought legal advice.

[stevenl]

Do the foreigners have a case against the lawyers or agencies that set up the companies?

After all, the foreigners sought legal advice.

Probably not. My guess would be the foreigners were offered a few choices, cheapest completely illegal, middle borderline legal and most expensive completely legal, and they choose the cheapest option. Their choice.

Edited July 24, 2013 by stevenl

[NamKangMan]

Do the foreigners have a case against the lawyers or agencies that set up the companies?

After all, the foreigners sought legal advice.

Probably not. My guess would be the foreigners were offered a few choices, cheapest completely illegal, middle borderline legal and most expensive completely legal, and they choose the cheapest option. Their choice.

Would that not make the Thai lawyers an accomplice to the crime? Therefore, no civil case to answer, bought about by the farang, but a criminal case to answer, bought about by police.

[stevenl]

Do the foreigners have a case against the lawyers or agencies that set up the companies?

After all, the foreigners sought legal advice.

Probably not. My guess would be the foreigners were offered a few choices, cheapest completely illegal, middle borderline legal and most expensive completely legal, and they choose the cheapest option. Their choice.

Would that not make the Thai lawyers an accomplice to the crime? Therefore, no civil case to answer, bought about by the farang, but a criminal case to answer, bought about by police.

Again, nothing to do with skin colour, foreigner would be the word to use in stead of farang.

No idea about the Thai justice system, whether or not there could be a case. But do think I know something about living in Thailand, so think there will not be a criminal case brought (don't forget the 'r') about by police. Maybe, just maybe, they will because of PR have a go at 1 or 2 of the lawyers, but that will just be to show they're doing something.

[Alwyn]

I thought the law was, 49/51, so if the 51 nominees are Thai partners on paper,the law has not been broken, it has always been a lawyer's job, to advise and get around the law, legally!...I ,may be wrong?....

I think that you are right,So why are they after the Farang and why don't they go after all the lawyer's (They are the crooks) and lock them away for life

Hi, apparently what they do is ask where the nominee shareholders raised the money etc, don't see what business that is to anyone but there you have it. But, the law does state that a foreigner cannot form a company for the sole purpose of owning land. The company should be making profit etc etc which is why a good accountant/lawyer will put a lease in place for the foreigner to rent his own house from his own company as that is legal, apparently! The other thing that keeps the officials away is if you give yourself say 30-35% of the shares. This keeps you below the radar. For the sake of security you issue yourself preferential shares with a 5 vote allocation per share. I have one question though; When a Thai opens a company I guess a lot of those companies will have nominee shareholders too right? Are they under the spotlight too? Just wondering..