Land Crackdown Targets Thai Shareholders

[donx]

OK - so I cannot own land in my own right, but I can legally lease the land for 30 years and "possibly" another 30 years.

I can also build a house on the land and legally own the house.

What happens at the end of 30 years if, for whatever reason, the lease is not, or cannot be, renewed?

I still own the house so what happens to it?

Good question. I've wondering about this for some time.

Move it to another piece of land where you can get another 30 year lease.

Not very feasable I know, but if you build something that could be disassembled or a prefab modular house, it could be done. Most likely you will end up walking away from it or attempting to get the land owner to buy it off you so he/she could sell both land and house to someone else.

[Gary A]

This is what I always heard too. I have a farang friend who closed his company and he told me that it was a big hassle as well as an expensive one.

My Thai friend had a company in Bangkok. He is now retired up country. He simply quit doing business and walked away from his company. That was several years ago. I see him every few days so I'll quiz him some more.

I would think it prudent to properly close out the company.

Gary,

If you just leave a company it does not get shut down automatically.

2 years ago we were advised by our lawyer to just leave our company which we wanted to close.He said nothing would happen and the govt would eventually shut it down.That worked for 2 years and then the govt started phoning us and actually came to our office and wanted to know where the tax,balance sheets etc were for the previous 2 years.

We are due to meet with the lawyer this week to find out how expensive a mistake we have made.I have heard of other people in a similar situation that have ended up being fined more than 100k baht.

[t.s]

I have to agree with Mobi as to increased or decreased home values. A house is a place to live and if you are happy with your house I fail to understand why it is important how much it is worth. I would guess the value increase or decrease would be important to speculators but if you plan to live there long term why is it important?

I've never understood why people obsess about this increased value either, especially people I know back in the States. It's not like any of these folks are going to sell their sole dwelling for a tidy profit, stick that money in a bank, and then go live under a freeway overpass. They would need somewhere else to live. Guess what? The price of other property went up similarly along with theirs.

what is there to understand about people wanting to make decent return on what is the single largest investment most folks ever make?

why would you spend $500,000 on a home you knew would be worthless in 5-10 years? if you were willing to do that you could easily rent.

Not all property prices are linked, nor do they all increase in value at the same rate. quit being obtuse

[Mobi]

Still doesn't circumvent he possibility of the Land Office investigating the thai nominees of the company. It could also lead to further problems in the future, as now farangs are avoiding transfer taxes, etc. on land by simply transferring shares. If the company route is to survive, they will have to have wealthy thai nominees who can withstand the scrutiny of the Land Office. Just my 2 cents. This is just my opinion, but I think, until a more air-tight company structure is provided, land values will fall in Thailand, at least in the tourist areas. In the non-tourist areas, not really, because the market is not driven by farang capital.

I agree with you, although the general feeling on this forum is that the existing land owning companies will probably be Ok as it would be massive and difficult task to start investigating them all. If this turns out to be the case, maybe there will end up being a finite "stock" of houses owned by farangs through companies that will remain in situ. This could even lead to a situation where such houses had an increasing value, because of the relative rareity and the fact that they could be sold on to other farangs by transfering the shares.

A bit fanciful, I know, but possible? Who knows?

I agree the sale/transfer of shares is avoiding land transfer tax, but presumably there would be a personal capital gains tax liability on the farang who sold his shares? And presumably that would also apply to the developer I mentioned in a previous post who plans to sell his house by selling the shares. I know nothing about Thai tax, so maybe someone could comment.

I realise all of the above is highly dubious - but just wondering, after all TIT

[Martin]

My father believed that long-term savings were well-invested in property.

His reasoning was that (in the UK) property prices would keep up with inflation, because it was largely the rise in property prices that fuelled inflation.

And, if you invested wisely in areas where the population could be expected to increase (for instance, the South East), the pressure would actually give you some increase beyond that of inflation.

So far, his dictum has come good.

However, for the future, there may be a change in where it is wise to invest.

We are moving from a period of 200 years in which energy costs have become less and less (in real terms) and property that needed to be heated or cooled had decreasing running costs.

Hence skyscrapers could get taller and taller and yet still be economically viable.

But, as the energy-price tide turns, many other tides will turn, too.

As far as the seaside resorts of Thailand are concerned, will moneyed population increase or not?

There have always been people planning to retire where they enjoyed their holidays, and retiring to Thailand does not involve having any winter heating costs.

But air con will cost more, and that annual long-haul flight back to the West will cost more.

My guess is that Thailand will see more Western pensioners retiring here, but not so many that property built now will sell on for much higher prices in future years.

[stevieff]

This is what one of Bangkok's best known law firms has been telling clients who have purchased land through a company specifically set up to allow a foreigner to do so:

Comments from Dragonman / Nadia2 are welcome. . .

The Thai government did recently change the laws on acquiring land with a

foreign company. Fortunately you were able to purchase and register the land

before this came about. The main problem people have now is forming a

company and trying to register the land. The land department wont do it.

There has been no indication that existing companies holding land will have

problems. Actually, as it stands now, your property purchase has appreciated

substantially as you can sell your land to another farang by simply

selling the shares in the company.

Your company has not actually done anything “illegal” by purchasing the

land. We simply slipped through an open loophole. You can still register

land with a company of your type, the only difference is now you must show

proof that the Thai shareholders have the ability to pay for their shares.

Its easy for them to implement “from now on”, but it would be impossible for

them to go back and investigate the shareholders in every land purchase.

What’s the worst case scenario? They could investigate your company and find

you in violation of land registration laws. In this case you would have 1

year to sell the property.

The guy's talking out of both sides of his mouth. On one point, he says you've done nothing illegal. On another point, he says you've done something illegal and it's possibe the Land Office can force you to sell the property. So which is it? The second one, of course. He says it's impossible to investigate all the shareholders in every land purchase. Not really impossible at all. Most attorneys use the same set of thai nominees in every land purchase. Any investigator could go to an attorney's office, ask for the papers on various companies, and quickly ascertain that there were the same nominees in every land purchase. A no-brainer. I'm really tired of these Thai attorneys defending this practice, because their interests are not what's best for the client, it's what's best for them. Their interest lies in doing a perpetual administrative, legal, and accounting service for the company. Screw them, I'm tired of their hack practices and I'm shutting my company down.

[Gary A]

t.s.. Who said it would be worthless? I said that people have to have a place to live and as long as they are living there it would make no difference if the price goes up or down. I certainly can't see the cost of renting going down even if property values decrease. Add the fact that most retiring farangs are not likely to spend $500,000 dollars or any substantial portion of their life's savings on a house in a foreign country. You get NO return on a house. If you do get a return that is because you sell it and then need to find somewhere else to live.

Edited June 2, 2006 by Gary A

[Noel]

A letter in today's Pattaya Mail:

Unfriendly to foreign investors

Editor;

Yesterday my attorney went into the Pattaya Land Office to register a land transfer for a parcel of land in Pattaya from a private Thai name (seller) into a Thai company name (buyer). I (a farang) was listed as a 49% shareholder and five Thais were listed as the 51% shareholders in the company. For many previous transactions over many years, this has always satisfied the government regulations and the name change on the land title deed papers was always approved. Now - so sorry - new government directive from Bangkok. 1) all shareholders must be present at the land office and their identities verified for this type of transfer to occur, 2) if there are any foreign shareholders, the change will not be approved. Over forty transactions were rejected the first day of this new directive. Effectively this prevents any foreigner from investing in new property transactions; land or houses in Thai company names and condo projects exceeding the 49% foreign ownership rule. Way to go Thailand - a great way to make this country investor friendly!

Signed,

Looking Elsewhere

[stevehaigh]

Steve, now that your wife is the sole stockholder will you now dissolve the company? What would be the purpose of paying an accountant to file tax returns? Yesterday I asked a male Thai friend of mine about this. He told me that since his company was inactive, the government would automatically dissolve it for him. That's contrary to what I have heard in the past.

i'm keeping it for the work permit.

[stevehaigh]

At the risk of being a bore, I am interested in this business of farangs transferring their shares to other farangs when selling their houses, and effectively circumventing the new crackdown. I know it may only affect a small number of people, but it could be a way out for farangs who wish to sell their house and still retain a reasonable value, if they were able to sell to another farang via this route.

Do any of our "experts" out there have any views on this? Will it stand up to scrutiny? Will the companies registry office (or whatever it is called) raise any queries when the share transfers are lodged with the appropriate authorities?

anyone buying shares in one of these "dodge" companies so to speak is taking a big risk. chances are you will not be able to verify if it has liabilities or pending legal action. i wouldn't touch one, even before this crack down.

[thaigene2]

Many here have been guessing at what has motivated the government to suddenly make such a profound policy change. Clearly this directive must have come from the top, so why rock the boat now?

One possible explanation is that the Thai government is attempting to devalue the Thai baht by putting a plug on certain types of foreign investments. [...] Although nationalistic feelings, fears, racism, etc., are contributing factors, discovering the real source may be as simple as looking at which parties might benefit the most from such a significant policy change:[...] it’s an easy sell for the Thai authorities to claim they are just protecting the Thai people from evil foreign lawbreakers/land stealers.

Yep..well said. Except the ironic thing is that really "they are just protecting the rich specific ethnic minority Thais who own most of the businesses and property from evil foreigners" and I think that answers your first question..who's best interests does this serve? Also if you had advance notice that a chill wind was about to blow up the back of foreign investors what would you do?? You'd be shorting the baht wouldn't you? The Hi-So's are probably all up in Hong Kong at this very moment - yet again doing the same thing they all did in 1997 - getting rich off the crash - and blaming the farangs for it.

I agree with others, don't buy - rent. Don't do business here either. And like others have said, don't invest any more in anything here than you are prepared to walk away from. Pizza Hut learned this, Carlsberg Beer learned this, and Khun Thaksin's former American partner learned this..(the Treaty of Amity didn't help him much now did it....so drop that stupid idea).

Just keep smiling - but watch your back. It's that kind of place and these are those kind of people.

[Zoltan]

I bought a condo on Jomtien beach i hope if did the right thing... all the thai women told me to buy a house and land.. the real estate guys told me to buy land throught the company thing was safe... boy were they wrong.

[JimmyGreaves]

Will the housing department approve building a house on a piece of land that is owned by a 49% farang owned company?

[Levent]

So if I understand correctly right now I could not sell my house to another farang by transferring the company shares into his name, but I could shut down the company and the buyers could put the house under the Thai wife's name? (in case it's a farang-Thai marriage of course)

[Prakanong2005]

Stevieff

Here is a legal opinion posted in the Real Estate section from a Thai Law firm whose opinion in this law does not effect resorts etc - as stated it is their "Opinion" but some people tend to think their lawyers opnion is the only one that counts and it ends up costing them ;-)

"We read with interest the article in the Bangkok Post dated 31 May 2006 entitled, “New Regulation Causes Confusion.” Since the article has caused some concern in the expatriate and business community, we researched the basis of the statements made in the article.

The Ministry of Interior informed us that there was no regulation dated 25 May 2006 as was referred to in the article, and that the closest document that they have to such a regulation as described in the article was a circular letter dated 15 May 2006.

According to that circular letter, a company involved in the real estate business with a significant foreign shareholding, and where the use of Thai nominees (front men) is suspected, may come under investigation when the company has the objective of engaging in the real property business.

Trading real property is a business prohibited to non-Thai companies and persons and is listed on List 1 of the Foreign Business Act, which is the most strictly prohibited category of businesses. There are 2 other lists of prohibited businesses where restrictions and punishments are less severe.

Although the use of Thai nominees to evade the Foreign Business Act or Land Act is illegal, general enforcement is not, apparently, the objective of the circular letter. The circular letter is aimed particularly at the companies engaged in the real estate business and not limited companies that purchase real property for objectives other than the real property business. There are many business activities other than the real estate business. For example, limited companies may purchase real estate for resort operations, company headquarters, fitness centers, research facilities, factories and a host of other activities.

The companies that would likely be affected by the circular letter would be real estate development and real estate sales companies using Thai nominees that are in actuality managed by or for the benefit of non-Thai nationals. Such an activity would also be in violation of the Foreign Business Act by engaging in a business listed on List 1 of business activities prohibited to non-Thai nationals.

[rayw]

I have now read a lot of this thread and heard lots of opinions and advice, some good, some bad, some racist, some genuine worries and now would like to indulge you with my own thoughts and opinions,which I hope make some sense. Be warned it is quite a long posting but I wanted to get all my thoughts on this into writing, so you are indeed forgiven if you decide not to read on.

This article by "Bangkok's Best Known Law Firm" does make some sense from how I see it. Forgive me if I have missed anyone already mentioning the following valid points and the danger of me repeating what has already been said, but here goes anyway.

Last year when I registered in Rayong province my small 90 sq wah residential land in a quiet non estate area, together with a nice quite well built house on it, I did so through my new Thai company legally set up specifically for this purpose. I spent several hours at the local Land Office whilst ALL of the relevant documents were VERY carefully scrutinised for legality, YES including the Company papers showing the formation and share holdings, including details of just who owned the Jusristic shares (only myself as sole director and amazingly a retired falang!). They then as an OFFICIAL Government Authority APPROVED the transfer and stamped the papers accordingly, so that in my eyes surely HAS TO mean that they considered the transfer to be 100% LEGAL. Call it precedence or whatever you like, but the transfer deal was officially government office approved and must therefore stand, unless I am truly missing something here. This point is surely VERY RELEVENT, and as far as I can see appears to have been missed so far in this long thread.

So you see as a law abiding citizen who respects Thai laws, I took what I am sure was good sound legal advice (not from a property broker but a professional business advisor and his legal team who had no vested interest in the deal). On this advice I went down the well trodden company formation method of buying my retirement home in Thailand through a perfectly LEGAL loophole. I purchased incidentally from a Thai national in a quiet area of just three houses, two of which are owned by Thais, and not from one of these developers on a large "falang" type estate. I mention this just so you get the picture of my situation, but this of course will make no legal difference at all. The transfer was NOT illegal as loopholes, (as their name implies), are loopholes and thus not contraventions of the law. The legality was as far as I am concerned confirmed by the Local Land Office when they fully endorsing the land transfer to my "loophole" formed company. So you see "Bangkok's Best Known Law Firm" are I think speaking a lot of sense here.

I am almost 100% certain that no retired expats living here in Thailand will lose their already set up, company owned retirement homes over this issue. In fact I think as was also mentioned in that "Law Firms" article, it might just mean a substantial value appreciation where the house is already owned by one of these 49% falang owned companies. This issue has been raised primarily I feel just as a clamp down on these huge foreign property developers who are making lots of money from this loophole. Many of them leaving masses of sometimes badly built homes in what often ends up as huge unsitely and as Thais see it undesireable housing estates. The term "Falang Ghettos" or it's Thai equivalent, has recently been mentioned to me as used in Thai circles (and some falang circles too). This is not conducive to good Thai/Falang harmony and relationships in the community which I for one want to see.

Personally all of my retirement assets are here in my 2.5 - 3.0 million Baht home (as approximately valued a few months ago). I have no other assets anywhere in the World to fall back on now and happily live here reasonably comfortable on my fairly small UK company pension. So I cannot afford to risk registering my land with my Thai wife/girlfriend like a lot of you do, because I know too well over my lifetime that relationships everywhere (not just here) are never guaranteed for ever or even for very long. Break ups can and do change people and bitterness often leads to spiteful deeds hurting one or both parties. If I lost my only hard earned asset to a broken Thai marriage then life would be pretty tough and miserable for me, like it would for the many others living here in similar circumstances. If property prices fall or rise then as I would only be selling to move to another residential home here then there is no loss or gain to me as the new home will also be proportionately cheaper or dearer. I am not here to make money from my residential home. Same goes for leaving the home to your Thai wife, she will neither gain nor lose as she has to carry on living somewhere which anyway will likely be in the house that she has lived in and got used to for many years.

The Thai authorities do officially advertise Thailand as an ideal retirement location for foreigners to move to, I remember seeing such Thai Government sponsored adverts in the UK publications several years ago before I retired and moved here. Can you really see the Thai Government now approving of any action that kicks ordinary clean living foreign retirees (who their adverts welcomed) out of their retirement homes, leaving them homeless with most or even all of their assets confiscated ?? You can just see the worldwide newspaper headlines "Thai Government Approves Action to Evict Foreign Retirees out of their Thai Homes over a Loophole in the Law". Somehow with the Thai cultural high importance of "not losing face" I just cannot ever see Taksin and/or his compatriats risking such damning publicity on the World stage. Sure Libyan, Iranian, Cuban and many African state governments would not have any worries on this score, but the Thai Goverment, come on no way would they risk losing face like that.

So good advice I have been given and fully endorse is for those falangs already with their company owned cosy residential homes not to panic, as it is highly unlikely that you will be adversely affected. I feel more sorry for those at the moment half way through buying their new home through this company method, as they may find it difficult or impossible to complete their transactions at least for now, and have to go down a different and maybe for them undesirable route with additional costs. I personally think from past experiences here that this will all blow over in a few weeks, like most things seem to, but considerable and I think intended damage will have been done in particular to the big property developers some of whom are selling mass produced sometimes shoddily built housing mainly to falangs.

Finally if the Democrats get in at the next election, I wonder whether they will reintroduce their previous plan to allow foreign retirees over 50 on retirement "O-A" visas to buy a single small plot of land for their retirement home in Thailand. That would solve a lot of these petty problems and makes a lot of logical sense to me. If restricted to say less than half a Rai of land it can hardly be construed as Thailand losing all their land to foreign investors. On the contrary it will encourage more retirees into Thailand bringing in their regular foreign currency pensions and not taking away jobs from the Thais, so perfectly fits in with general Thai values and beneficial to a good Thai/Falang community relationship.

This is what one of Bangkok's best known law firms has been telling clients who have purchased land through a company specifically set up to allow a foreigner to do so:

Comments from Dragonman / Nadia2 are welcome. . .

The Thai government did recently change the laws on acquiring land with a

foreign company. Fortunately you were able to purchase and register the land

before this came about. The main problem people have now is forming a

company and trying to register the land. The land department wont do it.

There has been no indication that existing companies holding land will have

problems. Actually, as it stands now, your property purchase has appreciated

substantially as you can sell your land to another farang by simply

selling the shares in the company.

Your company has not actually done anything “illegal” by purchasing the

land. We simply slipped through an open loophole. You can still register

land with a company of your type, the only difference is now you must show

proof that the Thai shareholders have the ability to pay for their shares.

Its easy for them to implement “from now on”, but it would be impossible for

them to go back and investigate the shareholders in every land purchase.

What’s the worst case scenario? They could investigate your company and find

you in violation of land registration laws. In this case you would have 1

year to sell the property.

[KhunMarco]

snip...

The Thai authorities do officially advertise Thailand as an ideal retirement location for foreigners to move to, I remember seeing such Thai Government sponsored adverts in the UK publications several years ago before I retired and moved here.

snip...

Maybe they do, but their law speaks a totally different language, and that's what counts not some TaT advertising on a magazine.

Anyone who plans to move and invest here should think carefully and study the law.

I'm not retired here, I'm still young for that.

I have to give credit to Thailand for being "guilty" of my passion for this area of the world.

But if nothing changes, I 'm already planning a couple of months in Malaysia next year to have an idea of life and properties there.

[backflip]

I too had a company set up by Sunbelt. When the dust settles, and there are any questions whatsoever, I expect Sunbelt to email me, and we can get the problem resolved. There's no need for the "sky is falling" mentality, no need for threats, no need for swearing, no need for panic. The law in question is six years old, and no one has lost a home due to the law. On the other hand, many men have lost a home to a "wife", "girl friend", or "business partner"

[ando]

The land purchase by the company is legal.

Just the purpose and function of the company is illegal.

I think thats probably just the way the Thai government (past, present and future) likes it. They can selectively investigate and enforce the law for troublesome farang company directors. Thailand has more than enough foreign interest and investment in residential land at the moment, under the present scheme. I can see no reason why they would want to give freehold title to individuals.

But when foreigners start exploiting this loophole on a grand scale for profit and start competing with genuine Thai companies, well thats when the hammer comes down. And thats where we are right now. They will cull out the big players running illegal real estate development and sales businesses and leave those with a single residential property alone. There is a lot of uncertainty and panic right now, but when the dust settles it will be business as usual for the little fellows with a lot less farang real estate developers. There is more than sufficient foreign demand for Thai property for genuine Thai real estate companies to fill the niche. When you think about it, now is a perfect time for Thailand to get rid of the illegal foreign real estate companies and take over the inflow of foreign clientèle they have created. Certainly a few customers will be scared off in the short term, but that will settle down after a short while.

[rayw]

>>The law in question is six years old, and no one has lost a home due to the law. On the other hand, many men have lost a home to a "wife", "girl friend", or "business partner" <<

Very well put indeed I had not looked it at that way but it does put things in relative perspective. Glad you did not add "Thai" to wife, girlfriend or business partner as most guys lose more in their western homes from these these sources than they do here. It is an international occurence not just in Thailand.

[Nawtilus]

OK - so I cannot own land in my own right, but I can legally lease the land for 30 years and "possibly" another 30 years.

I can also build a house on the land and legally own the house.

What happens at the end of 30 years if, for whatever reason, the lease is not, or cannot be, renewed?

I still own the house so what happens to it?

Jimbo, you can either walk away from it, move it, or try to sell it to the land owner. All this of course in the event he will not grant a new lease.

If a disagreement arises, chances are he will not and he will try to get a nice new 30yo house for free out of it. Then your options are to burn it to the ground and leave him the bill to clean it up.

Another option better to pursue might be to include in the lease that the owner is obliged to buy the house at a market evaluated price from you, taking into consideration the age of it, repairs etc this could be anything, or that he has to grant you a new lease if he is not willing to purchase the building at all.

30 year leases with the option of another 30 years, or an automatice renewal of another 30 year lease are not really clear in this country, simply because the maximum they can issue a lease for is 30 years, so offering another 30 in any way shape or form just may not hold any value because 30 years is the maximum.

RayW, if the government said it was right, then i guess you have nothing to worry about Oh, I think I read something about land owners in Phuket saying similar shit about the land office down there....then the land office guy got his head blown off.

For all the poeple complaining about this new possible crackdown and the 101 scenarios that may occurr, stop crying over spilt milk. You enetered a possibly shady deal that you knew about and that was not quite right within the Thai law. never the less you continued so you could get your hands on what you wanted, now face the music i guess.

Take your medicines like a man and act accordingly.

[Thaible]

Finally if the Democrats get in at the next election, I wonder whether they will reintroduce their previous plan to allow foreign retirees over 50 on retirement "O-A" visas to buy a single small plot of land for their retirement home in Thailand. That would solve a lot of these petty problems and makes a lot of logical sense to me. If restricted to say less than half a Rai of land it can hardly be construed as Thailand losing all their land to foreign investors. On the contrary it will encourage more retirees into Thailand bringing in their regular foreign currency pensions and not taking away jobs from the Thais, so perfectly fits in with general Thai values and beneficial to a good Thai/Falang community relationship.

Do you really believe that any Thais would vote for a party that helps farangs take their land and women?

I will be voting for whatever party came up with this law to finally stop farangs from pricing poor Thais out of their own land.

[solesman]

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,

[Dakhar]

Finally if the Democrats get in at the next election, I wonder whether they will reintroduce their previous plan to allow foreign retirees over 50 on retirement "O-A" visas to buy a single small plot of land for their retirement home in Thailand. That would solve a lot of these petty problems and makes a lot of logical sense to me. If restricted to say less than half a Rai of land it can hardly be construed as Thailand losing all their land to foreign investors. On the contrary it will encourage more retirees into Thailand bringing in their regular foreign currency pensions and not taking away jobs from the Thais, so perfectly fits in with general Thai values and beneficial to a good Thai/Falang community relationship.

Do you really believe that any Thais would vote for a party that helps farangs take their land and women?

I will be voting for whatever party came up with this law to finally stop farangs from pricing poor Thais out of their own land.

Do you really think farangs are pricing poor people out of Phuket etc.? Please, falangs are far from pricing out squaters that have no intention on paying for property in the first place! "Take your women...."? So they "Belong" to you? Oh yes, I forgot, this is a place where a "dory/sinsod" is still commonly practiced..... So I guess they do "belong" to you, much like an object or pet.

Yep, run to the polls, intitutionalize relationship standards.... that ought to keep thinks rigght.

[Maejo Man]

Do you really believe that any Thais would vote for a party that helps farangs take their land and women?

I will be voting for whatever party came up with this law to finally stop farangs from pricing poor Thais out of their own land.

Quick pass the bucket again Most of the Thais that I know own property in Australia or London. If Thai nationals can buy land next door to me in my country of origin, you would think that the Thai government in all it's benevelonce would reciprocate

[archiedixon]

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.

[Heng]

If Thai nationals can buy land next door to me in my country of origin, you would think that the Thai government in all it's benevelonce would reciprocate

Sure you can. It'll just cost you 40 million. Which if you compare the numbers of Thais who can afford to go abroad and acquire property (few) and foreigners who are willing and able to invest 40,, here for a piece of land (few), I'd say it about evens out. It's just a matter of each country setting roadblocks at different points.

[Deadcert]

Finally if the Democrats get in at the next election, I wonder whether they will reintroduce their previous plan to allow foreign retirees over 50 on retirement "O-A" visas to buy a single small plot of land for their retirement home in Thailand. That would solve a lot of these petty problems and makes a lot of logical sense to me. If restricted to say less than half a Rai of land it can hardly be construed as Thailand losing all their land to foreign investors. On the contrary it will encourage more retirees into Thailand bringing in their regular foreign currency pensions and not taking away jobs from the Thais, so perfectly fits in with general Thai values and beneficial to a good Thai/Falang community relationship.

Do you really believe that any Thais would vote for a party that helps farangs take their land and women?

I will be voting for whatever party came up with this law to finally stop farangs from pricing poor Thais out of their own land.

Not all farangs are in Thailand to exploit the women and the land and if they are there are plenty of Thais benefiting too !

Bottom line is that Thailand wants to become part of the International community then it is going to have to change many things or loose out to those countries that will.

[Inspector 2211]

Copy&paste from the Thorntree Thailand forum:

The HOT news from a contact at Government House:

There's been another letter sent out from the Interior Ministry to all provincial governors: "Ignore the previous letter and carry on as before"

Toxin was apparently purple with rage during a meeting with major Thai-Chinese developers/investors today.

Lots of junior clerks are in the toilet scraping their underwear as we speak and a couple of assistant permanent heads of department are about to have the word "permanent" erased from their job titles - in addition to being sent to the Ministry of Inactive Posts, Mukdahan branch office, to live out their lives. TIT!

It took 6 days to fix. It might take a little longer to undo the damage and the scaremongering and hysteria stirred up by the likes of Emperor Tud and the Bangkok Post.

The more I despair of Thailand the more I have confidence in knowing that what is f****d today will be fixed tomorrow. Trouble is, the reverse happens all too often. Surely it's not too hard to learn the old maxim - "if it ain't broke, don't fix it!"

[stevieff]

Stevieff

Here is a legal opinion posted in the Real Estate section from a Thai Law firm whose opinion in this law does not effect resorts etc - as stated it is their "Opinion" but some people tend to think their lawyers opnion is the only one that counts and it ends up costing them ;-)

"We read with interest the article in the Bangkok Post dated 31 May 2006 entitled, “New Regulation Causes Confusion.” Since the article has caused some concern in the expatriate and business community, we researched the basis of the statements made in the article.

The Ministry of Interior informed us that there was no regulation dated 25 May 2006 as was referred to in the article, and that the closest document that they have to such a regulation as described in the article was a circular letter dated 15 May 2006.

According to that circular letter, a company involved in the real estate business with a significant foreign shareholding, and where the use of Thai nominees (front men) is suspected, may come under investigation when the company has the objective of engaging in the real property business.

Trading real property is a business prohibited to non-Thai companies and persons and is listed on List 1 of the Foreign Business Act, which is the most strictly prohibited category of businesses. There are 2 other lists of prohibited businesses where restrictions and punishments are less severe.

Although the use of Thai nominees to evade the Foreign Business Act or Land Act is illegal, general enforcement is not, apparently, the objective of the circular letter. The circular letter is aimed particularly at the companies engaged in the real estate business and not limited companies that purchase real property for objectives other than the real property business. There are many business activities other than the real estate business. For example, limited companies may purchase real estate for resort operations, company headquarters, fitness centers, research facilities, factories and a host of other activities.

The companies that would likely be affected by the circular letter would be real estate development and real estate sales companies using Thai nominees that are in actuality managed by or for the benefit of non-Thai nationals. Such an activity would also be in violation of the Foreign Business Act by engaging in a business listed on List 1 of business activities prohibited to non-Thai nationals.

Well, then, there's our answer. Everyone can just buy a 300 baht sign that reads "Hotel California", get the necessary businees license, throw-up a cheap website, appoint ourselves "hotel manager", and our "guests" would be our wife, her brother, etc. Zoning is pretty lax in most parts of Thailand, so that's not a problem. Actually, I never thought they would target resort owners, or small homeowners, but if they wanted to get pissy, they could. I really do think they want the larger farang developers, but who knows for sure? According to the letter in the Pattaya Mail, they're preventing farangs with companies from acquiring even small lands. As far as existing companies, according to 2 legal firms in Samui who have emailed me, companies are fine, as long as the thai nominees can prove capital. As far as the "legality" of the companies, a previous commenter makes a good point. They reviewed the documents at the Land Office, they approved the documents at the Land Office, the company's then "legal" at that point,unless the law changes, which it has not. Of course, subsequent accounting, taxes, etc. must be maintained. So that's it in a nutshell, make sure your nominees are solid and pay your taxes and your existing company should be fine, as long as you're not engaged in real estate trading.