Land Crackdown Targets Thai Shareholders

[ThaiBob]

that sounds like good news for phuket , hopefully land office chiefs elsewhere in thailand will take an equally pragmatic view on the situation and ease the fears of worried buyers.

.....where's the good news? He reports registrations will continue and only those not in compliance with the law will have problems. Most of foreigners buying condos, houses and land forming Thai companies are not in strict compliance with the law. I see no reassurance in his statement.

[taxexile]

i may be wrong , but reading between the lines of k.supots or the BDO chiefs statements it would appear that they are not going to delve too deeply or be too quick to refer deals to head office in bangkok for further investigation.

[Rooo]

Went to land office on Samui yesterday to help a friend.No problems there.

[LaoPo]

I have a 'slight' feeling that there has been a 'message' from BKK to ease the whole matter.

IF they would do a very strict survey (according to the law) these guys would be out of their own job in no time.....and not a single house would be built/sold anymore, (with a Thai company structure) leaving hundreds of thousands of workers without a job...

LaoPo

[Arkady]

The Phuket Land Dept quote sounds like they are only checking to make sure the co is no more than 49% foreign owned and not bothering to check whether Thai shareholders could afford to invest in the company. This is completely different from the apparent intent of the letter to provincial governors. The situation is still very unclear and it seems too early to say which way it will go, particularly with the political situation in a state of flux. It may be different in different parts of the country. It is probably not worth panicking but I would not want to enter into a new transaction until things are clearer and prices may fall anyway due to this and the meltdown in financial markets.

At the end of the day you are exposed not only to the Land Dept and the Commercial Registration Dept or its provincial equivalent by using a dummy nominee company but also the Revenue Dept. The cheap accounting services offered by the real estate legal and accounting consultants frequently result in their accounts being qualified by the auditor who is signing off on up to 300 companies from Jan to May each year for 8,000 baht each. This means that the auditor's opinion contains a disclaimer saying that the company failed to produce detailed documentation for his scrutiny, so that his liability is limited if something untoward is discovered. This disclaimer which the accounting service will not bother to translate for you is an open invitation for the Revenue Dept to come and do a tax audit when they can say they don't believe the company really has no income and demand bribes in return for not making an outrageous tax assessment. They can also determine that whoever has the residential use of the house is receiving a taxable perk and can charge personal income tax on their assessment of the rental value. The best thing is to create some business activity for the company.

The elite card entitlement to buy land through a corporate nominee structure set up by Thai Elite Card got cancelled after ony a few months and no transactions because it ran into "legal problems". Elite card holders were offered a refund if that was the only reason they bought the card. Don't know if any took up the offer.

[rcav8r]

The elite card entitlement to buy land through a corporate nominee structure set up by Thai Elite Card got cancelled after ony a few months and no transactions because it ran into "legal problems". Elite card holders were offered a refund if that was the only reason they bought the card. Don't know if any took up the offer.

So IF the elite card entitlement to buy land through a corporate nominee structure set up was cancelled, was this not one of the main points of having the elite card ? All the other so called elite card benefits - things like fast track through immigration, hotel room discounts, selected restaurant discounts, cheaper rounds of golf, discounts at selected spas - and the like - were only window dressing surely ? If that be the case, is there any point in having an elite card ? And is the whole 'elite' thing about to be scrapped ? And those who bought into the elite thing to be refunded ? MalcolmL

[ovenman]

All the other so called elite card benefits - things like fast track through immigration, hotel room discounts, selected restaurant discounts, cheaper rounds of golf, discounts at selected spas - and the like - were only window dressing surely ?

Not to hear the few TV members who actually bought an elite card tell it. Most all have posted that they already received their money's-worth out of the card, even without any land benefits.

[rcav8r]

All the other so called elite card benefits - things like fast track through immigration, hotel room discounts, selected restaurant discounts, cheaper rounds of golf, discounts at selected spas - and the like - were only window dressing surely ?

Not to hear the few TV members who actually bought an elite card tell it. Most all have posted that they already received their money's-worth out of the card, even without any land benefits.

Very interesting indeed ! Where did these TV people post that they had already received their money's worth ? Did they say what they spent on to obtain discounts to the value of Bt1mil ?

[taxexile]

Most all have posted that they already received their money's-worth out of the card,

well they would wouldnt they.

were the legal problems that cropped up the very same problems that are now affecting house and land ownership

The cheap accounting services offered by the real estate legal and accounting consultants frequently result in their accounts being qualified by the auditor who is signing off on up to 300 companies from Jan to May each year for 8,000 baht each. This means that the auditor's opinion contains a disclaimer saying that the company failed to produce detailed documentation for his scrutiny, so that his liability is limited if something untoward is discovered. This disclaimer which the accounting service will not bother to translate for you is an open invitation for the Revenue Dept to come and do a tax audit when they can say they don't believe the company really has no income and demand bribes in return for not making an outrageous tax assessment.

this is also quite interesting, its money for old rope , just the kind of gravy train that developers and legals love.

if this is the case then developers and their legal cronies really do have some questions to answer.

it also shows just how exposed buyers could be should the authorities really want to make things difficult.

talk about hanging your clients out to dry.

[ovenman]

All the other so called elite card benefits - things like fast track through immigration, hotel room discounts, selected restaurant discounts, cheaper rounds of golf, discounts at selected spas - and the like - were only window dressing surely ?

Not to hear the few TV members who actually bought an elite card tell it. Most all have posted that they already received their money's-worth out of the card, even without any land benefits.

Very interesting indeed ! Where did these TV people post that they had already received their money's worth ? Did they say what they spent on to obtain discounts to the value of Bt1mil ?

You would have to look up some of the old threads that have run in the past regarding the elite card. I am drawing a blank as to who the TV members are that actually purchased elite cards but it seems like the number is three members or so.

were the legal problems that cropped up the very same problems that are now affecting house and land ownership

Not an expert but I don't think they were per se. In the case of the elite card, the elite card company would have been the actual property owner (if memory serves).

The cheap accounting services offered by the real estate legal and accounting consultants frequently result in their accounts being qualified by the auditor who is signing off on up to 300 companies from Jan to May each year for 8,000 baht each. This means that the auditor's opinion contains a disclaimer saying that the company failed to produce detailed documentation for his scrutiny, so that his liability is limited if something untoward is discovered. This disclaimer which the accounting service will not bother to translate for you is an open invitation for the Revenue Dept to come and do a tax audit when they can say they don't believe the company really has no income and demand bribes in return for not making an outrageous tax assessment.

this is also quite interesting, its money for old rope , just the kind of gravy train that developers and legals love.

if this is the case then developers and their legal cronies really do have some questions to answer.

it also shows just how exposed buyers could be should the authorities really want to make things difficult.

talk about hanging your clients out to dry.

Well, you wouldn't expect any of these services to actually stand by their misstatements, would you?

[~G~]

Thailand has been allowing foreigners to buy/build for more than a hundred+ years now. And yes, the economic effects have been incredible. At first, it was just the Chinese, but for the past 50+ years, it's been the Japanese as well. Now the Koreans, Taiwanese, and Singaporeans are quite welcome as well. Western foreigners as well... through THEIR FAMILIES. IMO the issue is that westerners don't maintain their legacies in the LOS

Is this same person who previously posted in this forum: "I trust my wife, but I also trust HSBC, Citibank, etc", talking about keeping secret accounts out of reach and out of sight of his wife?

Yes, I think it is. One can only guess if you'd practice what you preach, regardless of what your ancesstors did 70 years ago.

[rcav8r]

I am drawing a blank as to who the TV members are that actually purchased elite cards but it seems like the number is three members or so.

So there were only a very few who claimed to have recovered their expense on the elite card ? Well, there were only a few who bought into elite too.

[Heng]

Thailand has been allowing foreigners to buy/build for more than a hundred+ years now. And yes, the economic effects have been incredible. At first, it was just the Chinese, but for the past 50+ years, it's been the Japanese as well. Now the Koreans, Taiwanese, and Singaporeans are quite welcome as well. Western foreigners as well... through THEIR FAMILIES. IMO the issue is that westerners don't maintain their legacies in the LOS

Is this same person who previously posted in this forum: "I trust my wife, but I also trust HSBC, Citibank, etc", talking about keeping secret accounts out of reach and out of sight of his wife?

Yes, I think it is. One can only guess if you'd practice what you preach, regardless of what your ancesstors did 70 years ago.

And it's exactly as I stated. I trust my wife, but I also have responsibilities to a greater organization as well, my own family. The trust is equal. I have the same trust that her family has made arrangements for their own independent existance as well.

Regarding real estate, every other purchase of real estate that I make is made in my wife's name. My name-her name-my name-her name. All previously acquired properties stay 'named' as they are. This is for the future of nuclear family AB (Hengs = A, Wife's family = . Keeping certain cash accounts that mostly pre-exist family AB, earned by family A is in maintaining with our legacy tradition; it keeps the legacies of both families independent of one another to certain extent. These A accounts are namely coffers for education, business, or whatever for family A siblings and cousins on my side of the family who may need an interest free loan or gift from time to time. It would be improper of me to expect these investments to fall on my wife's side of the family, although typically we are more than happy to fund these endeavers from the coffers of family AB. IMO, in the end, this practice only strengthens the family in the long term as family A accounts are typically only rainy day accounts for family AB were to ever need them and in all likelihood passed down to AB children anyway. It's our own "trust fund" system in a country where there aren't mechanisms to create trusts.

And mind you, we're talking about very modest amounts of cash. All real estate, family wise, is 'on the table' in plain view as it should be. It's the equivalent of you not telling your spouse about the change in the ash tray in your car.

[Thaiquila]

Is the elite card still valid? And transferable? I would buy one for 10K baht, im me with the details.

[~G~]

Regarding real estate, every other purchase of real estate that I make is made in my wife's name. My name-her name-my name-her name.

Sounds pretty fair, balanced and reasonable. Why not put %100 of the real estate property on her name as you suggest foreigners do?

[Heng]

Regarding real estate, every other purchase of real estate that I make is made in my wife's name. My name-her name-my name-her name.

Sounds pretty fair, balanced and reasonable. Why not put %100 of the real estate property on her name as you suggest foreigners do?

I only suggest foreigners do that for ONE generation, the same way foreign Indians and Chinese Thais have done in the past and present. It amazes me that some folks can't seem to make their family last for more than one generation (which sounds like a long time... but in practical application is only 18 years, the time when your first son's and daughters can legally head the family).

Like all things in life, balance is the key.

[~G~]

Regarding real estate, every other purchase of real estate that I make is made in my wife's name. My name-her name-my name-her name.

Sounds pretty fair, balanced and reasonable. Why not put %100 of the real estate property on her name as you suggest foreigners do?

I only suggest foreigners do that for ONE generation, the same way foreign Indians and Chinese Thais have done in the past and present. It amazes me that some folks can't seem to make their family last for more than one generation (which sounds like a long time... but in practical application is only 18 years, the time when your first son's and daughters can legally head the family).

Like all things in life, balance is the key.

I agree that balance is the key. Having the wife (or the husband) own 100% of the real estate property is niether balanced nor reasonable.

49% of all marriages in the US these days end up in a divorce. In the 1930's, when your anccestors immigrated to Thailand, those numbers were a tiny fraction of it. I seriously doubt that many chinese with money to invest these days come and buy property in Thailand on their spouse's name. I believe that "worried phone calls from hong kong" were also mentioned in this thread. Correct me if I'm wrong.

Edited June 9, 2006 by ~G~

[Arkady]

So IF the elite card entitlement to buy land through a corporate nominee structure set up was cancelled, was this not one of the main points of having the elite card ? All the other so called elite card benefits - things like fast track through immigration, hotel room discounts, selected restaurant discounts, cheaper rounds of golf, discounts at selected spas - and the like - were only window dressing surely ? If that be the case, is there any point in having an elite card ? And is the whole 'elite' thing about to be scrapped ? And those who bought into the elite thing to be refunded ? MalcolmL

I know a few people who bought this card and all live in Thailand, although it was originally intended for visitors who live elsewhere. Those who worked hard at using the golf, spa and other benefits like two for one first class THAI tickets (now expired) seemed happy with the value and they liked the fast track and limo service at the airport. All of them have work permits and could get permanent residence if they applied but have not bothered and now can't without having their Elite cards terminated, if they disclose it. So the visa thing is actually useless for them. The card seemed to appeal to the vanity of people who can afford to blow a million baht and liked the prestige and the novelty. It must be hard in reality to use a million baht's worth of the perks.

For the well healed who wanted to buy land, exploring the one rai/40 million baht investment route would make more sense as that seems the only legitimate way a foreigner can own land permanently in his own name but it had better be an expensive piece of land in Bangkok. It's not worth putting 40 million in low yield government bonds for three years to buy a rai of scrubland in Buriram. The Elite idea of the nominee structure sounded a bad work around at the time and would probably not have been permanent. Even buying through a 100% foreign company with BoI priveliges you have to sell the land when the priveliges expire.

Some one asked if the cards are transferable. The answer is yes but you have to pay a fee of 100,000 baht to have the card transferred to your name. The 5 year visa still has to be endorsed at Immigration every 3 months at a cost of 1,900 and it is not clear that it will be automatically renewed after the first 5 years ends. It may depend on whatever government is in power then. I would imagine that it will just be allowed to fade out with priveliges being gradually withdrawn until it is useless like other hasty schemes introduced without much thought by the star of The Emperor's New Clothes.

[rcav8r]

So IF the elite card entitlement to buy land through a corporate nominee structure set up was cancelled, was this not one of the main points of having the elite card ? All the other so called elite card benefits - things like fast track through immigration, hotel room discounts, selected restaurant discounts, cheaper rounds of golf, discounts at selected spas - and the like - were only window dressing surely ? If that be the case, is there any point in having an elite card ? And is the whole 'elite' thing about to be scrapped ? And those who bought into the elite thing to be refunded ? MalcolmL

I know a few people who bought this card and all live in Thailand, although it was originally intended for visitors who live elsewhere. Those who worked hard at using the golf, spa and other benefits like two for one first class THAI tickets (now expired) seemed happy with the value and they liked the fast track and limo service at the airport. All of them have work permits and could get permanent residence if they applied but have not bothered and now can't without having their Elite cards terminated, if they disclose it. So the visa thing is actually useless for them. The card seemed to appeal to the vanity of people who can afford to blow a million baht and liked the prestige and the novelty. It must be hard in reality to use a million baht's worth of the perks.

For the well healed who wanted to buy land, exploring the one rai/40 million baht investment route would make more sense as that seems the only legitimate way a foreigner can own land permanently in his own name but it had better be an expensive piece of land in Bangkok. It's not worth putting 40 million in low yield government bonds for three years to buy a rai of scrubland in Buriram. The Elite idea of the nominee structure sounded a bad work around at the time and would probably not have been permanent. Even buying through a 100% foreign company with BoI priveliges you have to sell the land when the priveliges expire.

Some one asked if the cards are transferable. The answer is yes but you have to pay a fee of 100,000 baht to have the card transferred to your name. The 5 year visa still has to be endorsed at Immigration every 3 months at a cost of 1,900 and it is not clear that it will be automatically renewed after the first 5 years ends. It may depend on whatever government is in power then. I would imagine that it will just be allowed to fade out with priveliges being gradually withdrawn until it is useless like other hasty schemes introduced without much thought by the star of The Emperor's New Clothes.

Thanks for the interesting and detailed response on elite. I was trying to get as up to date as possible on elite.

Now here's another aspect - a piece of land near Don Muang was "appropriated" from the Royal Thai Air Force (RTAF) supposedly by and/or for elite. This land was used for 30+ years before (since the early 70s) as a public recreation area with the full agreement of the Air Force. It was in use by the general public every day.

When elite came along, offering golf "holidays", this land was "taken over" by elite or taken back

by RTAF - to make a golf course - supposedly for elite card holders. Thailand really needs another golf course - right ? The land was closed for public use - the golf course has not been built - yet !!!

Does anyone believe this land will revert to it's use as a public recreation facilty - or will it now be turned into condos ? And who gains ? I wonder ?

[Heng]

Regarding real estate, every other purchase of real estate that I make is made in my wife's name. My name-her name-my name-her name.

Sounds pretty fair, balanced and reasonable. Why not put %100 of the real estate property on her name as you suggest foreigners do?

I only suggest foreigners do that for ONE generation, the same way foreign Indians and Chinese Thais have done in the past and present. It amazes me that some folks can't seem to make their family last for more than one generation (which sounds like a long time... but in practical application is only 18 years, the time when your first son's and daughters can legally head the family).

Like all things in life, balance is the key.

I agree that balance is the key. Having the wife (or the husband) own 100% of the real estate property is niether balanced nor reasonable.

49% of all marriages in the US these days end up in a divorce. In the 1930's, when your anccestors immigrated to Thailand, those numbers were a tiny fraction of it. I seriously doubt that many chinese with money to invest these days come and buy property in Thailand on their spouse's name. I believe that "worried phone calls from hong kong" were also mentioned in this thread. Correct me if I'm wrong.

The Chinese experience in Thailand is at a different point of development so to speak, so it's difficult to compare the two situations (presumably with the western experience) accurately. In my experience, nowadays they take other types of risk other than merely trusting one's spouse (which still happens). Often investments (purchase of property) are made through distant relatives merely based on the trust that they are of the same family and name place association (for example, you'd trust that I will hold this property for you until you get settled, or perhaps purchase it for you as my part of the investment and you rent to own, just because you are also a Heng, but perhaps from a neighboring village, and you have a cousin here who knows me to be an upstanding fella, etc). There is also less of the trusting your spouse issue for the current generation of Chinese immigrants as those that are in power here don't make it terribly difficult for newcomers to become citizens. Learn some Thai, think of a Thai name (more likely become part of a family here), and go to a "friendly" amphur to get on the house registry and smile for that ID card photo. Done.

Back to the local husband or wife owning 100% of the real estate as a way of gaining a property foothold for one's family here, again, I must stress that I'm not recommending it for everyone. Plenty of folks pick the wrong people to trust. Some folks pick the right folks, but then are 100% successful at making them enemies. YMMV.

[BlackJack]

any comments on this idea i saw in a local newspaper

buy the house property in the wifes name

go to lawyer

have them draw up a mortgage agreement where the wife has to pay you back as you are lending her the money

if the house is never paid off then the mortgage remains and so cannot be sold

[~G~]

Back to the local husband or wife owning 100% of the real estate as a way of gaining a property foothold for one's family here, again, I must stress that I'm not recommending it for everyone. Plenty of folks pick the wrong people to trust. Some folks pick the right folks, but then are 100% successful at making them enemies. YMMV.

Even if one trust his Thai wife and her immdediate relatives, there are always those uncles and anties who can never be responsible for themselves and need to be taken care of by the one family member with money. In this kind of situations I think it is not unlikely that even without any bad intentions of the wife and her parents, pressure can be put on them by influential relatives.

[~G~]

any comments on this idea i saw in a local newspaper

buy the house property in the wifes name

go to lawyer

have them draw up a mortgage agreement where the wife has to pay you back as you are lending her the money

if the house is never paid off then the mortgage remains and so cannot be sold

There was a discussion about that in the Real Estate sub-forum. Apparantly this kind of morgage that depends on a foreign body will not be approved.

[Dragonman]

any comments on this idea i saw in a local newspaper

buy the house property in the wifes name

go to lawyer

have them draw up a mortgage agreement where the wife has to pay you back as you are lending her the money

if the house is never paid off then the mortgage remains and so cannot be sold

Under Thai Law all debts and loans after marriage are communal, and therefore you would be lending and borrowing from yourself, to yourself. . It would be interesting to see someone going to Court to sue themselves for non-performance. OK if your not married, and not yet living as husband and wife, but plan to.

[ando]

Even if one trust his Thai wife and her immediate relatives, there are always those uncles and anties who can never be responsible for themselves and need to be taken care of by the one family member with money. In this kind of situations I think it is not unlikely that even without any bad intentions of the wife and her parents, pressure can be put on them by influential relatives.

Quite true.

Husbands may come and go, but family is forever.

A lot of farangs just dont realize how strong family ties are in Thailand. Only rarely will a husbands status be placed above that of the family in the hierarchy of the wifes needs and duty.

Like it or lump it. If you dont like it, then dont marry a Thai. Thats just the way it is in Thai culture.

No pension plan, no unemployment benefits. Family are the greatest security a Thai has for old age.

[Heng]

Back to the local husband or wife owning 100% of the real estate as a way of gaining a property foothold for one's family here, again, I must stress that I'm not recommending it for everyone. Plenty of folks pick the wrong people to trust. Some folks pick the right folks, but then are 100% successful at making them enemies. YMMV.

Even if one trust his Thai wife and her immdediate relatives, there are always those uncles and anties who can never be responsible for themselves and need to be taken care of by the one family member with money. In this kind of situations I think it is not unlikely that even without any bad intentions of the wife and her parents, pressure can be put on them by influential relatives.

I'm talking about the "right folks" as the entire family (along the lines of what Ando has mentioned above) as well as the individual, as they are often one and the same here. The "influential relative" situation happens all the time for locals as well. Both the individual in question and his/her responsible spouse (and sometimes immediate relatives: brother in laws, sister in laws, father + mother in laws, etc.) has the ability to handle such situations.

[thailand_tom]

we all need to stop investing in thailand. why should we as foreigners settle for 49% of ownership anyway when 100% of the money is ours. my wife can own land and a house in the united states 100%. i will not be investing another dime here. i will just live here and save my money now. and yes i own land and a house here in my wifes name. we have been together 11 years and believe it or not she is 4 years older then me. save your money and find a country that allows 100% ownership and when we start to retire and bring our money to a different country you will see things change and then it will be too late for thailand. if anyone knows of countrys that allow 100% ownership in asia for foreigners let us all know. time to start another boom somewhere else and watch the market here go bust. i do feel bad for everyone that is getting screwed, i hope you all can sell quickly to a thai. and no i would not buy a condo here. i do not believe the law for condos will stay the way it is. it will change also.

[Thaible]

we all need to stop investing in thailand. why should we as foreigners settle for 49% of ownership anyway when 100% of the money is ours. my wife can own land and a house in the united states 100%. i will not be investing another dime here. i will just live here and save my money now. and yes i own land and a house here in my wifes name. we have been together 11 years and believe it or not she is 4 years older then me. save your money and find a country that allows 100% ownership and when we start to retire and bring our money to a different country you will see things change and then it will be too late for thailand. if anyone knows of countrys that allow 100% ownership in asia for foreigners let us all know. time to start another boom somewhere else and watch the market here go bust. i do feel bad for everyone that is getting screwed, i hope you all can sell quickly to a thai. and no i would not buy a condo here. i do not believe the law for condos will stay the way it is. it will change also.

Farangs that buy real estate do not "invest" in Thailand, they molest it. Real estate is a NON-PRODUCTIVE asset.

The ONLY reason you need to buy vs rent is to sell it to a Thai at a higher price than they woud have paid otherwise.

[Noel]

Farangs that buy real estate do not "invest" in Thailand, they molest it. Real estate is a NON-PRODUCTIVE asset.

The ONLY reason you need to buy vs rent is to sell it to a Thai at a higher price than they woud have paid otherwise.

What a load of crap...

[lukamar]

The ONLY reason you need to buy vs rent is to sell it to a Thai at a higher price than they woud have paid otherwise.

There are lots of people that want land for other reasons, not just to rape a Thai on a resale. Land ownership gives you personal security, a sense of being, a home for your family, a place in the community and the ability to knock the walls out and make modifications any time you want without having to beg the landlord.