Land Crackdown Targets Thai Shareholders

[george]

Gazette News: Land crackdown targets Thai shareholders

BANGKOK: -- The Ministry of Interior has ordered a crackdown on property companies attempting to circumvent Section 74 of the Land Act in order to allow foreigners to control land ownership.

Section 74 states (unofficial translation): “In the process of registering [land] possession rights and contracts between parties … officers have the power to investigate both parties and call them for questioning or have them send relevant documentary evidence as is necessary. Officers will proceed as is appropriate to the case.

“In cases where there is reason to believe that the request to register possession rights will evade the law or where there is reason to believe that land is being bought for the benefit of foreigners a request for an order from the Minister will be made. The Minister’s order will be final.”

The crackdown will target Thai partners in Thai-foreign ventures, examining their inco me, their professional qualifications or experience, and their credit history.

In an order dated May 15 and issued to all provincial governors, the Deputy Permanent Director of the Ministry, Sura-art Thongniramol, notes, “The Ministry of Interior has received reports that there are foreigners working with Thais or [engaging] Thais to register a company with the aim of buying and selling immovable property as a business venture.

“At the initial stage a house and land are purchased for residence or [for use as] an office and later [the aims are changed] to selling and subdividing for sale to foreigners … which is illegal.”

Provincial officials are ordered, “as protection against bypassing the law”, to examine limited companies, limited partnerships and general partnerships “having the aim of carrying out business in immovable property.”

The order continues, “If it appears that an alien holds shares or is a director, or if it is reasonable to believe that a Thai holds shares as a representative of an alien, the officers shall investigate the income of Thais holding shares, delving into the number of years [they have been] in [their] current profession, and their income. The provision of necessary evidence is required.

“If a loan was taken [by the Thai] for the purchase [of shares] evidence of the loan is required.”

The order does not specify which officials will be responsible for investigating suspect companies, nor does it set out, except in the vaguest of terms, what will happen after the “investigation”.

All it says is, “If after due investigation it can conceivably be believed that the request for registration … is to bypass the law or [it can be believed] that [those involved are buying] land for the benefit of an alien as defined in Section 74 … the officers who undertook the investigation shall forward the findings to the Land Department to a wait the order of the Minister.”

No deadlines are set for how long an investigation will take, or how fast the Minister will be required to deliver a judgment.

Local reaction was hard to come by. The Phuket Provincial Land Office was not aware of the new order. However, one Thai involved in the property industry, who did not wish to be named, remarked that it seemed “like a good thing, as long as the application is fair”. He added that he worried that it might be used by some “for their [own] benefit”.

-- Phuket Gazette 2006-05-31

This topic originated from here.

[basjke]

What if the thai shareholders,who don't have an income,give evidence that the money they used for buying the shares came from a loan provided by the foreign director of the company.A loan which offcourse never will be paid back full.Is this a legal way or not?

[edd]

The solution is easy,

Buy the LAND in your wife’s name. Usually circa B1.000,000

Put a 30 year lease on it, plus another 30 to follow.

Build the house, this you can own and demolish if you choose to.

Keep your money out of Thailand and out of reach of the Thai courts and you’re soon to be ex wife.

If you end up divorced. The Thai law says all assets should be split 50/50.

So half the value of the house and land each. (poss, 2.000,000 each)

So it costs you about 2.000.000 Baht for the pleasure of getting rid of her.

You can offer to buy her out for a lower amount or make her wait till the end of the lease.

Get divorced in any western country and it will cost you a lot more.

Our house in Thailand is in my wifes name, if anything went wrong i would not want it, its in the village amongst the Thai family. property is one of the powest priorites in a divorce for me.

[LivinLOS]

The solution is easy,

Buy the LAND in your wife’s name. Usually circa B1.000,000

Maybe up country.. No much of anything on Phuket at that price.. I know of more plots at 20x that per rai (and more) than I do of under that per rai.

Put a 30 year lease on it, plus another 30 to follow.

Second 30 is not legal.. Only a 30 year maximum can be legally registered.

[Nadia 2]

For foreigners who have registered land in a landholding company. Next month they may come up with section 94 and 96 of the Land Code…

Section 94: 'All the land which an alien has acquired unlawfully or without permission shall be disposed of by such alien within the time limit prescribed by the Director-General which shall not be less than one hundred eighty days nor more than one year. If the land is not disposed of within the time prescribed the Director-General shall have the power to dispose of it. The provisions on the forced sale of land in chapter 3 shall apply mutatis mutandis'. Yep, you (your company) is as a matter of law deemed to be alien by your capital investment..

section 96: 'When it appears that any person (including a juristic person) has acquired land as the owner in place of an alien or juristic person under the provisions of Section 97 and 98, the Director-General shall have the authority to dispose of such land and the provisions of Section 94 shall apply mutatis mutandis'. Not only could the limited company be deemed alien, also could the limited company be seen as person 'in the place of the alien'. It is of course obvious the case and not only because of the nominee structure...

[deminister]

This has to do with businesses not with private land for houses. Anyhow most companies take a lease of 99 years anyhow. And a lease is as good as ownership. It is an strange law becaus eyou cannot take land with you and all politicians do have huge amounts invested in properties abroad. By the way if you are married with a Thai lady, technically you can not even buy land anymore, UNLESS she can prove that she is the source of income and so on. But for those who have a boyfriend, or a husband they are allowed to buy.

And no it is not legal when they prove a loan which will not be paid back....

[marquess]

This has to do with businesses not with private land for houses. Anyhow most companies take a lease of 99 years anyhow. And a lease is as good as ownership. It is an strange law becaus eyou cannot take land with you and all politicians do have huge amounts invested in properties abroad. By the way if you are married with a Thai lady, technically you can not even buy land anymore, UNLESS she can prove that she is the source of income and so on. But for those who have a boyfriend, or a husband they are allowed to buy.

And no it is not legal when they prove a loan which will not be paid back....

The whole thing is TINK TONK! In this land of official xenephobia, investing, is like dropping a gold coin in the desert sands, the more you try to retreive it; the further it sinks!

[cobra]

The whole thing is TINK TONK! In this land of official xenephobia, investing, is like dropping a gold coin in the desert sands, the more you try to retreive it; the further it sinks!

Very well put,

I've always been inclined to rent instead of own, so it's a none issue to me, keeps my mobility unencumbered,

[dotcom]

If it clears out the speculators I am all for it. Anyone who tries to circumvent the law should be punished.

[dan060975]

i wonder if the next step is to target business ie a business made up of falung & made up share holders so falung can own 100% business...?????????????

[chippendalesam]

The whole thing is TINK TONK! In this land of official xenephobia, investing, is like dropping a gold coin in the desert sands, the more you try to retreive it; the further it sinks!

Very well put,

I've always been inclined to rent instead of own, so it's a none issue to me, keeps my mobility unencumbered,

Knowlegeable men and women; how or does this pertain to me (a U.S. A citizen) under the treaty of amity with Thailand? I as a U.S. citizen can own a majority or all of the shares of a company. So my question is does this latest foray by the min. of interior remain irrelivent to me?

[paulnuek]

I think this has been coming for a long time....

How much money has been laundered in Thailand this way?

I am/was thinking about buying a condo.

Not anymore!!!!

Whats the point anyway as its so cheap to rent.

If it goes tits up my money is still safe in a bank.

What law will they change/enforce next?

I have a house in CM.

Well when I say "I" what I mean is the wife does.

We have been married for 15 years and are going to relocate as soon as our house in the UK is sold.

I am not bothered about this house if we were to go out seperate ways.

I don`t think the locals would take to me if that was the case.

So I won`t be taking out a 30 year lease!!!!

Just renting a condo in Pattaya!!!!

I just hope the exchange rate doesn`t drop anymore!!!!

[dotcom]

i wonder if the next step is to target business ie a business made up of falung & made up share holders so falung can own 100% business...?????????????

No. They have been doing it that way for 30 years. Welcome to Thailand.

[aartchm]

As I mentioned earlier in the other topic (Bangkok Post story) in March 2000 the law was very clear that using nominees is illegal and up to 3 years imprisonment. ! If you now the law and more important follow the law than you can not use nominees to set up a company eather for purchasing land and/or house or starting a business. This includes everyone buying land for personal use, for commercial (projects) and having a (small) business. If you use maids, drivers, staff from the lawoffice or any other person that only holds the shares on paper and don't have any financial participation in the company then this is illegal.

The Temasak case shows it all.

Living in Thailand is wonderfull, if you apply to the rules, there is no Thai (government officials) who will make it difficult for you.

Aart Chiang Mai

[KhunMarco]

i wonder if the next step is to target business ie a business made up of falung & made up share holders so falung can own 100% business...?????????????

Eh exactly my thought. Why not?

I have quite a bit of friends who wouldn't be too happy if that happens

[Nadia 2]

Knowlegeable men and women; how or does this pertain to me (a U.S. A citizen) under the treaty of amity with Thailand? I as a U.S. citizen can own a majority or all of the shares of a company. So my question is does this latest foray by the min. of interior remain irrelivent to me?

In short - To get protection under the Amity Treaty (it is quite a procedure) the company registered in Thailand must be 100% US owned/ the 7 promoters must be US nationals. For the Land Code the company is alien and you are not allowed to own land.

Under the treaty there are exemptions from the restrictions in the Foreign Business Act for US nationals and corporations for most but not all controlled businesses. No right to immigrate, the right to own land, the right to a visa nor the right to work…

As far as I know - To comply with WTO regulations, the Thai government announced in June 2003 that the Treaty of Amity would not be renewed when it expires on January 1st 2005. But the government said existing privileges given to US companies would be phased in to the new bilateral trade agreement being draw up between the two. Moreover, Thailand will open most sectors to all foreign investors in 2006 (not yet) to comply with WTO regulations…

[iosufm]

T

Keep your money out of Thailand and out of reach of the Thai courts and you’re soon to be ex wife.

As a money manager i'd say that keeping your money out of Thailand is the best advice one could possibly give. The rules work against foreigners here for land ownership. The market is illiquid and full of microstocks that pay iffy dividends. Banks pay miniscule interest on savings accounts. No mutual funds available. Government bond is 4%, several basis points below the US 2yr.

There are many countries that will bend over backwards for your money, allowing you to buy land, giving you permanant residency, tax relief, and many investment vehicles. Heck, Greneda even gives you a condo for a certain level of investment.

Keep the minimum 400k/800K here, invested in money market savings account, and move mama soup money in as needed. That way you make the low cost of living work for you, adding to your annual return in the process.

Oh and i find if you treat your thai wife with courtesy and respect its equally returned.

[stevieff]

i wonder if the next step is to target business ie a business made up of falung & made up share holders so falung can own 100% business...?????????????

Eh exactly my thought. Why not?

I have quite a bit of friends who wouldn't be too happy if that happens

Read the previous comment and I'll think you'll see that any business, land, or house ownership is vulnerable, as long as they have used thai nominees with no capital. Doesn't mean they will investigate, but they.

[yankeechief]

It is just in line with the underlying anti foriegner sentiment that is starting to surface after all these years. And do not say that its not out there. Some of you have lived here so long that you have lost touch with reality and need to step back occassionally and get a fresh perspective on life here.

[tracer0]

Knowlegeable men and women; how or does this pertain to me (a U.S. A citizen) under the treaty of amity with Thailand? I as a U.S. citizen can own a majority or all of the shares of a company. So my question is does this latest foray by the min. of interior remain irrelivent to me?

In short - To get protection under the Amity Treaty (it is quite a procedure) the company registered in Thailand must be 100% US owned/ the 7 promoters must be US nationals. For the Land Code the company is alien and you are not allowed to own land.

Under the treaty there are exemptions from the restrictions in the Foreign Business Act for US nationals and corporations for most but not all controlled businesses. No right to immigrate, the right to own land, the right to a visa nor the right to work…

As far as I know - To comply with WTO regulations, the Thai government announced in June 2003 that the Treaty of Amity would not be renewed when it expires on January 1st 2005. But the government said existing privileges given to US companies would be phased in to the new bilateral trade agreement being draw up between the two. Moreover, Thailand will open most sectors to all foreign investors in 2006 (not yet) to comply with WTO regulations…

It would normally not be worth it but if a lot of money is involved you can setup a usa company and then register it with a Thai embassy in the USA to have a branch or whatever here.

And it would make it possible to get that USA protection for the company while owner isnt a USA citicen....

Anyway, I talked to a friend yesterday, his birthday and he is now 60. His wife bought a house and land in Manich, they are building and price about 1800000 baht. First de said she stupid, then he thought again and had a laugh and last evening he said she got a 25 year mortgage which HE pays. So if she ever walks out on him(g).... Also doubtful he will still be there in 25 years!!

[Zemran]

Keep the minimum 400k/800K here, invested in money market savings account, and move mama soup money in as needed. That way you make the low cost of living work for you, adding to your annual return in the process.

Oh and i find if you treat your thai wife with courtesy and respect its equally returned.

Or ship the required 400k/800k into LOS for your visa application and ship it out again the next day.

I agree completely with the second statement as well. My wife has a mortgage which I pay. It is only 2K more than the rent I was paying so it is no different for me to pay it and she has to stay with me long time to get a house out of me which as far as I am concerned she is welcome to. We also have other land etc. in her name but even if I did get proved wrong I would lose so much less than I did in my last divorce. All these whingers do not seem to put it into perspective.

[GezT]

Going back to the initial quote by George, I get the feeling the authorities are trying to stop the trend where company's, that are falang controled, are buying large plots of land then sub-dividing them, re-registering the plot's with the land office then selling on the individual plots at a greater profit.

I don't think they are so much targeting 'Pattaya Pete' who is living with or married to 'Nakon Nok' and just trying to keep his property should things got tit's up.

[JimsKnight]

The solution is easy,

Buy the LAND in your wife’s name. Usually circa B1.000,000

Put a 30 year lease on it, plus another 30 to follow.

Build the house, this you can own and demolish if you choose to.

Keep your money out of Thailand and out of reach of the Thai courts and you’re soon to be ex wife.

If you end up divorced. The Thai law says all assets should be split 50/50.

So half the value of the house and land each. (poss, 2.000,000 each)

So it costs you about 2.000.000 Baht for the pleasure of getting rid of her.

You can offer to buy her out for a lower amount or make her wait till the end of the lease.

Get divorced in any western country and it will cost you a lot more.

Our house in Thailand is in my wifes name, if anything went wrong i would not want it, its in the village amongst the Thai family. property is one of the powest priorites in a divorce for me.

A very crude and some might say a wasteful strategy there m8. The fact is you'll be paying good money and wasting half or more of your dosh on the divorce settlement not to mention legal fees involved.

Getting the thais to go for the fish rather than the fishing rod (ie the money and not the property) is a risky chance at best. Waiting until the lease runs out... hmm how much of a patient man are you! If you died before the lease expired the property reverts back to the thai named owner anyway!

Still I wholeheartedly agree on the keeping the money out of thailand strategy!

[stevehaigh]

does anyone see a legal problem with the company selling the land to a thai, say the directors wife?

[logbags]

Well I think it is clear this new drive is to crack down on Farang developers who are taking over the markets in many tourist areas.

I agree that Thailand is not a place for investments, especially if you are retired. I personally stay only 90 days at a time in Thailand and live like a tourist.

I stay in a province in the south where you can stay in a 2 bedroom apartment in a 5 star hotel for 10,000 baht a month including breakfast, laundry and maid service free.

There is cable TV, a gym, sauna and a full sized pool. Why would you bother with all the crap of investing in a country so unfriendly for your dosh when you can live high on the hog anyway.

I have a large extended Thai family and could have bought rais of cheap land over the years. I say make and invest your money elsewhere, enjoy and spend it in Thailand.

[Patriot]

As I mentioned before, TORNADO advised against "company" ownership three and a half years ago ........... and yet this guy is banned ........... go figure. Lads ; if you want me off the forum please PM.

Cheers

Chris from Nai Harn

[Jai Dee]

As I mentioned before, TORNADO advised against "company" ownership three and a half years ago ........... and yet this guy is banned ........... go figure.

Chris, Tornado was not banned from ThaiVisa for posting his views on property ownership in Thailand.

Anyway, back on topic please.

[danone]

I am surprised that this "company" ownership was going on and on.

recently in hua hin a main property broker there assured me it is "absolutely no problem" to own a house as a foreigner.

go figure.

thats how they "sell" all these houses to unknowing foreigners.

there is no way around a trustworthy thai. if you dont have a trustworthy thai, leave your hands off it. or stick to condos with assured ownerships.

it remains to be seen what kind of penalties they would issue, like confiscation of land?

but this stricter interpretation of the law is certainly no crackdown against thai shareholders. its a crackdown against the people using and living on the premises.

but lets see how it is actually enforced.

[imjustagirl]

Im in a bit of a panic here! the baht has dropped so fast and the whole country seems to be going bonkers! At the moment i rent (thank god) but my money is here in a baht account. Someone previously mentioned get your money the hel_l out of Thailand asap.....i cant do that......I am however transfering it to a sterling account in Siam bank (apparently protected by the king so should be secure).......does anyone else feel reminded of the late 90's devaluation? Is this possible again?????

Im looking for some helpful answers and advice and no pi**taking please, I can't afford to loose my life savings!!!! (and am not prepared to marry a thai man to invest in a house!!!)

Help!!!!!

[logbags]

I have posted the story below for newcomers to Thailand. It sums up the whole Thai system in one article. A government official more than likely using her political clout to upset long standing vested interests. Hired lackeys paid to wipe her out and they then die by some mysterous hand. This is how most disputes end in Thailand over land and business.

Key suspect takes full blame in 'suicide' note

Police say enough evidence against other four suspects

## i.e scapegoats, hired lackeys, patseys

Shortly before police were to apprehend him yesterday, a key suspect in the murder of MP Kobkul Nopamornbodi in Ratchaburi on Saturday drank poison-laced beer and died, leaving a suicide note acquitting others who had already been arrested.

## How convenient.

Four suspects have been apprehended. One is Jamron Omthong, a kamnan in Ban Lad district in neighbouring Phetchaburi province. Another is his son, Suppharit.

## a Kumnan invloved in a land scam, that would be a first

The alleged driver of a pickup truck carrying the two gunmen who blasted Kobkul's car was Anont Phanrat. The fourth suspect is Anantasak Srisawas, a member of the Muang Ratchaburi municipality.

## a local official involved in a land or business dispute leading to murder. In Thailand??

The man who died after drinking beer laced with pesticide is Sa-ngad Phumpheng, who left a suicide note written with a pencil saying he was solely responsible for the murder. Police are investigating whether Sa-ngad wrote the letter, had it dictated to him or whether it was faked.

## Agent Fox Mulder couldn't get to the truth here

The letter read: "Everything was carried out all by myself. Anantasak and the others had nothing to do with it. I had helped MP Kobkul all along but she had betrayed me, so I got angry. The senator, I apologise for doing things without letting you know beforehand. I did it alone. Please take care of my kids, my wife and my cows. Really sorry."

## its the first thing you think of when topping yourself, write a letter exonerating the local sor sor in a murder.

Jamron, 50, was the first suspect arrested after police apprehended him at his home in Phetchaburi at 5am yesterday morning and found two shotguns, two pistols and ammunition.

##Another law abiding citizen with an arsenal in his cupboard.

The details of the assassination were provided mostly by Anantasak, the manager of Sri Sawat Market. Quoting Anantasak, 42, police said Jamron sat in the passenger seat of the pickup used in the murder, while Suppharit and Anantasak hid in the flatbed among baskets of vegetables. Sa-ngad, who was to identify Kobkul, was driving another vehicle.

## agent 13 would be proud of them, the old hiding in the vegetables in the pick up trick

The shooting occurred at an intersection when Kobkul's vehicle stopped for a red light. Anont pulled up alongside Kobkul's pickup. Jamron, carrying an M-16 with folded stock, and his 26-year-old son, with a standard M-16, jumped out and sprayed bullets into the passenger cabin. Neither murder weapon has been found.

## Serious shooters, no mention of how military hardware finds its way into the hands of government officials

Sa-ngad's wife Thassawan told police he was drinking beer alone at the house of a local politician in the Don Tako tambon of Muang Ratchaburi district when she last saw him. Sa-ngad was later found lying unconscious with saliva coming out of his mouth. He was pronounced dead shortly after being admitted to Suan Phueng Hospital. An autopsy is under way to determine whether Sa-ngad killed himself or was forced to drink the pesticide.

A warrant is being sought to summon Phongphat Narknook, a member of Don Tako tambon administrative organisation and the owner of the house in which Sa-ngad was drinking, to question him over his relationship with Sa-ngad.

Police spokesman General Ajiravid Subarnbhesaj said investigations are centring on whether the two gunmen belonged to any guns-for-hire groups.

## hired gunmen in Thailand?? heaven forbid

He said police had sufficient evidence against the four men arrested. "They are not scapegoats," he said.

## the Thai police looking for a scapegoat? Hard to believe that.

Edited June 1, 2006 by logbags