Thai Nominee Shareholding Crackdown in Pattaya announced by DSI

[dagling]

Anyone with knowledge please tell us a good country to put our investment dollars!

Norway.

[petercool]

one slur post removed

11) You will not post slurs, degrading or overly negative comments directed towards Thailand, specific locations, Thai institutions such as the judicial or law enforcement system, Thai culture, Thai people or any other group on the basis of race, nationality, religion, gender or sexual orientation.

[kannot]

Under BOI people like me have 100% western owned investment company with no Thai Nationals. Its 100% legal and includes special benefits such as Work Permits. So legal options do exist!

Right up until they move the goalposts.

[Spoonman]

I hope you're right for so many people on this board that it's all smoke and mirrors, but fact is that NOBODY at this point knows if it is so or not, and that include our local troll Jsixpack.

The future will tell how serious it is, but nobody will lose his property since I think the courts will allow a certain period to get legal.

Pity thing is that when a few thousand properties are on fire sale, the prices will drop as a rock, and that will include condo sales in foreign name and rental prices.

It is all scary stuff,not just for property owners,for everyone.

Nobody in their right mind would want to stay in Thailand if these things come to pass,even the renters would want out with all their possessions,cars,bikes,furniture even their dogs and animals would be abandoned . The decline would be remarkable,guys who have known each other for years would suddenly vanish.

But these things have happened before ,so just getting used to the idea that it will all ba a'changin',easier when young,not so getting old.

Iam a renter (because I cannot own land in my own name).....

Why would I not want to stay ? not as though my life will change because people that have houses in dodgy companies lost their lot.

You might think you can isolate yourself from it all,impossible.Every conversation,every thought process is given to the situation that a fair few are caught up in,if all this goes ahead I feel sorry for them ,I do.

They have been the bedrock of the expat community,someone putting down roots,and others following,sort of balances out the temporary renters

Sure to follow a purge like this are visa issues, compulsary medical insurance issues,the things quoted above do not come singularly

Done it and got the T shirt,even HM govt. got involved in the past. A sad long drawn out ending. Once what was a thriving expat community reduced to a bitter sadness

Been here for 8 years with the same employer (that is Thai owned) and my house is rented from a Thai.....

I don't foresee how I will be affected with the clampdown on dodgy company owned property.

[Thai at Heart]

Shoot themselves in the foot because of silly childish laws.

I hope TOYOTA and HONDA and PIZZA COMPANY and every foreign company slam the door and move on.

SAVE FACE LOSE MONEY new Thai slogan.

You think any of those companies have been set up illegally ?

Thailand is going after the bent companies which it has every right to do, not those that comply with the law.

I doubt Toyota sat in some back street lawyer office and agreed when told 'that's how we do it here, 20,000 baht and it's all sorted'

I just hope that many of those that wanted the ED VISA people out of the country 'because we don't want your sort here' are caught up in this and lose millions.

Sour grapes ? no I believe it's called karma.

Wonderful.

Define bent.

Companies with 51% foreign ownership on paper where the majority shareholders choose to hold a different class of shares. This isn't bent.

It is just a loophole that Thailand doesn't want anyone to have. Thai citizens use this loophole to maintain management control of their thai companies all the time.

[JesseFrank]

Shoot themselves in the foot because of silly childish laws.

I hope TOYOTA and HONDA and PIZZA COMPANY and every foreign company slam the door and move on.

SAVE FACE LOSE MONEY new Thai slogan.

You think any of those companies have been set up illegally ?

Thailand is going after the bent companies which it has every right to do, not those that comply with the law.

I doubt Toyota sat in some back street lawyer office and agreed when told 'that's how we do it here, 20,000 baht and it's all sorted'

I just hope that many of those that wanted the ED VISA people out of the country 'because we don't want your sort here' are caught up in this and lose millions.

Sour grapes ? no I believe it's called karma.

Wonderful.

Define bent.

Companies with 51% foreign ownership on paper where the majority shareholders choose to hold a different class of shares. This isn't bent.

It is just a loophole that Thailand doesn't want anyone to have. Thai citizens use this loophole to maintain management control of their thai companies all the time.

Companies in Thailand don't have 51% foreign ownership, they have 51% Thai ownership.

Bent is a company with 51% of shareholders that have nothing to do with the company and are only straw men.

Bent is a company that is set up for the only purpose of owning a property, but has no real activities, and declares some fictitious business dealing on it's balance sheet at the end of the year.

Bent is a company that declares fictitious yearly shareholding meetings, including some shareholders that may have already deceased a few years.

Bent is a company that has forced his shareholders to sign an undated share transfer document .

You want some more definitions of bent ?

[DD13]

Shoot themselves in the foot because of silly childish laws.

I hope TOYOTA and HONDA and PIZZA COMPANY and every foreign company slam the door and move on.

SAVE FACE LOSE MONEY new Thai slogan.

You think any of those companies have been set up illegally ?

Thailand is going after the bent companies which it has every right to do, not those that comply with the law.

I doubt Toyota sat in some back street lawyer office and agreed when told 'that's how we do it here, 20,000 baht and it's all sorted'

I just hope that many of those that wanted the ED VISA people out of the country 'because we don't want your sort here' are caught up in this and lose millions.

Sour grapes ? no I believe it's called karma.

Wonderful.

Define bent.

Companies with 51% foreign ownership on paper where the majority shareholders choose to hold a different class of shares. This isn't bent.

It is just a loophole that Thailand doesn't want anyone to have. Thai citizens use this loophole to maintain management control of their thai companies all the time.

Companies in Thailand don't have 51% foreign ownership, they have 51% Thai ownership.

Bent is a company with 51% of shareholders that have nothing to do with the company and are only straw men.

Bent is a company that is set up for the only purpose of owning a property, but has no real activities, and declares some fictitious business dealing on it's balance sheet at the end of the year.

Bent is a company that declares fictitious yearly shareholding meetings, including some shareholders that may have already deceased a few years.

Bent is a company that has forced his shareholders to sign an undated share transfer document .

You want some more definitions of bent ?

Asking shareholders if they are "willing and happy" to sign an undated share transfer document.....isn't the same as forcing

[JesseFrank]

Companies in Thailand don't have 51% foreign ownership, they have 51% Thai ownership.

Bent is a company with 51% of shareholders that have nothing to do with the company and are only straw men.

Bent is a company that is set up for the only purpose of owning a property, but has no real activities, and declares some fictitious business dealing on it's balance sheet at the end of the year.

Bent is a company that declares fictitious yearly shareholding meetings, including some shareholders that may have already deceased a few years.

Bent is a company that has forced his shareholders to sign an undated share transfer document .

You want some more definitions of bent ?

Asking shareholders if they are "willing and happy" to sign an undated share transfer document.....isn't the same as forcing

But the end result is the same. It's against the law.

[DD13]

There is bound to be a serious "spin offs" if this were to happen

Yesterday afternoon we were in Chic R on Sukhumvit .....there was not another customer in this huge store.....

Imagine what will be happening to the sales of all these stores..........if farangs did exit Thailand

I am already in the "dog house" this evening for suggesting that I put on hold for a few weeks, the dining table and chairs we were planning, until I see the outcome of this latest news........

[Munger]

ATF, on 22 Aug 2014 - 10:04, said:ATF, on 22 Aug 2014 - 10:04, said:

atsiii, on 22 Aug 2014 - 09:50, said:atsiii, on 22 Aug 2014 - 09:50, said:

My wife is a Thai national; I am a USA national. We live in each country roughly six months per year. But the difference in the way we are treated by each other's native country is night and day. My wife travels in and out of the USA on her Thai passport never needing a Visa. She can work, own property, own businesses, go to school, whatever. She is protected against overt discrimination and welcomed as a tax-paying, contributing part of society. But no matter how long we are married, nor how long we are in Thailand, I can never do any of those things. We are both college educated experienced professionals; but she is welcomed and wanted in my country, and I never will be in hers. Xenophobic or not, it's just plain dumb.

Well go somewhere else where you feel Americans are appreciated more.

BTW every guy's wife or GF on this forum is college educated with multiple doctorates.

My wife's not.... but I'll proudly walk, side by side, anywhere with her.

So if she was not, then what was she ? Do you want to "proudly" tell the forum ?

[Arkady]

This happened last time we had a military installed government. They tried to amend the Foreign Business Act (FBA) to make control of companies through preference shares with greater voting rights illegal but in the end it was not approved in the NLA as there was a hard core of members that thought it wasn't tough enough. Ministers and bureaucrats also went around issuing threats about foreigners who illegally owned "nearly all the Thai coastline" etc. In the end nothing happened at all. All the bitter and twisted bureaucrats have their own pet projects that always get shot down by elected governments, so they bring out to try on with military governments. The Sarayud government was unable to achieve anything meaningful at all, so it went after cheap brownie points by playing the nationalist card and bashing foreigners. Who can say what will happen this time?

At the end of the day, this is a real problem for foreign direct investment in the services sector which is largely blocked for majority foreign ownership under the FBA. Just like Thai investors abroad, foreign investors in Thailand have no interest in investing, if they can't have control of their own business and Thai-Chinese joint venture partners hardly ever add any significant value at all. It's time to scrap the FBA completely and replace it with a modern investment code and also permit leases of more than 30 years. There are plenty of examples they can follow: Laos, Cambodia, Vietnam and Burma etc.

I have posted about that event in post #130

http://www.thaivisa.com/forum/topic/753763-thai-nominee-shareholding-crackdown-in-pattaya-announced-by-dsi/?p=8281274

Only difference with then is that this time the NLA and the military are one and the same.

Correct. The 2007 NLA looked far more disparate than this one and was susceptible to lobbying from specialised interest groups. I think the Thai Chamber of Commerce pushed hard for FBA amendment, maybe the Federation of Thai Industries too.

Very blatant protectionism with can only benefit a few already rich families, while damaging competitiveness and denying opportunities to Thai consumers and workers.

Sent from my iPhone using Thaivisa Connect Thailand

[JesseFrank]

This happened last time we had a military installed government. They tried to amend the Foreign Business Act (FBA) to make control of companies through preference shares with greater voting rights illegal but in the end it was not approved in the NLA as there was a hard core of members that thought it wasn't tough enough. Ministers and bureaucrats also went around issuing threats about foreigners who illegally owned "nearly all the Thai coastline" etc. In the end nothing happened at all. All the bitter and twisted bureaucrats have their own pet projects that always get shot down by elected governments, so they bring out to try on with military governments. The Sarayud government was unable to achieve anything meaningful at all, so it went after cheap brownie points by playing the nationalist card and bashing foreigners. Who can say what will happen this time?

At the end of the day, this is a real problem for foreign direct investment in the services sector which is largely blocked for majority foreign ownership under the FBA. Just like Thai investors abroad, foreign investors in Thailand have no interest in investing, if they can't have control of their own business and Thai-Chinese joint venture partners hardly ever add any significant value at all. It's time to scrap the FBA completely and replace it with a modern investment code and also permit leases of more than 30 years. There are plenty of examples they can follow: Laos, Cambodia, Vietnam and Burma etc.

I have posted about that event in post #130

http://www.thaivisa.com/forum/topic/753763-thai-nominee-shareholding-crackdown-in-pattaya-announced-by-dsi/?p=8281274

Only difference with then is that this time the NLA and the military are one and the same.

Correct. The 2007 NLA looked far more disparate than this one and was susceptible to lobbying from specialised interest groups. I think the Thai Chamber of Commerce pushed hard for FBA amendment, maybe the Federation of Thai Industries too.

Very blatant protectionism with can only benefit a few already rich families, while damaging competitiveness and denying opportunities to Thai consumers and workers.

Sent from my iPhone using Thaivisa Connect Thailand

I understand from your post that you consider there is this time even less chance for the amendment to be approved ?

I think the opposite.

[KittenKong]

I thought the 49% foreign ownership in condo is not affected?

It isn't. Why should it be?

Farang-name ownership of condos up to 49% of the total is perfectly legal and has been for many years. It's all the other tricks that aren't legal.

[mikeflysthai]

No comment useless the trues nobody wants to know!! Because Expats are blind to rasism because thats what it is!

[wilcopops]

It seems that the current administration is still determined to crackdown on errant foreigners.....at least until they are quietly told that this isn't really either practical or in the country's best interests.

It would be nice if just one dictum came out where someone somewhere had done just a tiny modicum of research on, before they went public.

Edited August 22, 2014 by wilcopops

[Japhrodisiac]

I'll say it again, the answer is simple. Lengthen the lease terms by law and you won't have any more issues.

The byzantine legal structures are there simply because Paying 30m baht for a property(or what have you, just an example) that has a 30yr lease is unacceptable to 99% of people.

Leases elsewhere in the world are 90 and 99 years, why not in Thailand?

[Geordie59]

I feel sorry for the foreigner using Thai Nominee Shareholding .....

I dont. It's illegal. It's always been illegal. There has never been any suggestion that it is anything other than completely illegal.

Anyone who does this chooses to do so in full knowledge of the fact that it is totally illegal, and so they only have themselves to blame if it goes pear-shaped.

That said, from the report it appears that they are targeting active businesses rather than just house-owning nominee company structures. Though I would not be at all surprised if the latter were not targeted also at some point in the near future.

Target the house owning nominee company structures (including the condos)?

I doubt they would wish to kill the market totally and are not stupid to believe that there would be any other outcome.

[Seymour1]

'The law criminalized nominees, any Thai who held shares on behalf of a foreigner.'

Q)So what is the proof/ how is it defined/the difference between real legit thai shareholders and those nominees used by the foreigner and doing it for the benefit of the foreigner? Especially with the loophole below

'However, the law did not prohibit foreigners from being the majority in the board of directors and also did not prohibit having different classes of shares with differing voting rights. This loophole allowed thousands of foreign-controlled businesses to operate in Thailand.'

[Thai at Heart]

Shoot themselves in the foot because of silly childish laws.

I hope TOYOTA and HONDA and PIZZA COMPANY and every foreign company slam the door and move on.

SAVE FACE LOSE MONEY new Thai slogan.

You think any of those companies have been set up illegally ?

Thailand is going after the bent companies which it has every right to do, not those that comply with the law.

I doubt Toyota sat in some back street lawyer office and agreed when told 'that's how we do it here, 20,000 baht and it's all sorted'

I just hope that many of those that wanted the ED VISA people out of the country 'because we don't want your sort here' are caught up in this and lose millions.

Sour grapes ? no I believe it's called karma.

Wonderful.

Define bent.

Companies with 51% foreign ownership on paper where the majority shareholders choose to hold a different class of shares. This isn't bent.

It is just a loophole that Thailand doesn't want anyone to have. Thai citizens use this loophole to maintain management control of their thai companies all the time.

Companies in Thailand don't have 51% foreign ownership, they have 51% Thai ownership.

Bent is a company with 51% of shareholders that have nothing to do with the company and are only straw men.

Bent is a company that is set up for the only purpose of owning a property, but has no real activities, and declares some fictitious business dealing on it's balance sheet at the end of the year.

Bent is a company that declares fictitious yearly shareholding meetings, including some shareholders that may have already deceased a few years.

Bent is a company that has forced his shareholders to sign an undated share transfer document .

You want some more definitions of bent ?

That is the issue. Define straw men. There are literally hundreds of companies where Thais have been gifted shares by family where the owner has less than 51% but still exercises full control by using share classes.

The only difference here is whether the minority owner is Thai or foreign.

[Bender]

well after the visa runner, the illegal teacher, the young retired, now thats your turn. I hope you will enjoy your ride

[hawker9000]

well after the visa runner, the illegal teacher, the young retired, now thats your turn. I hope you will enjoy your ride

Yeap. Give 'em time (not that they've been wasting much of it since all this started). They'll be getting around to just about everybody sooner or later. I wouldn't be surprised in the least if even the elite card holders get a little s#!t sandwich to munch on eventually. All of you have broken the law (whether you know it yet or not...) in some which way, and you must pay!

[MobileContent]

You do know that Pizza Company is owned by the Minor Food Group which is owned by a Thai person don't you.

Bill Heinecke may have "Thailand" stamped on the front of his passport but he still doesnt look very Thai to me.

What are you saying ???? A new law coming out that says you must not only be Thai, but now you must LOOK Thai ????55555

+1 William Heinecke is Thai and this for a long time already. I know many farangs that are Thai.

@Spoonman - You are wrong - Minor Food is owned by Minor International and the Heinecke family controls 60%. The other shares are held by Banks on behalf of nominees and his HM has 2% in shares as well. Minor Food was delisted on the SET a long time ago.

[KittenKong]

That said, from the report it appears that they are targeting active businesses rather than just house-owning nominee company structures. Though I would not be at all surprised if the latter were not targeted also at some point in the near future.

Target the house owning nominee company structures (including the condos)?

I doubt they would wish to kill the market totally and are not stupid to believe that there would be any other outcome.

Who knows?

One nice thing about property (if you are a government) is that it cant be moved or exported. The cash that has been paid over for these company-owned units is already in the economy, and if they simply confiscated all illegal company-owned units and sold them at knock-down prices to Thais, would there really be any losers apart from the farangs who currently own (or think they own) the illegal companies?

We all know to what extent Thailand is concerned about the well-being of farangs who are involved in illegal activities.

[KittenKong]

You do know that Pizza Company is owned by the Minor Food Group which is owned by a Thai person don't you.

Bill Heinecke may have "Thailand" stamped on the front of his passport but he still doesnt look very Thai to me.

What are you saying ???? A new law coming out that says you must not only be Thai, but now you must LOOK Thai ????55555

+1 William Heinecke is Thai and this for a long time already.

Heinecke is just as much Thai as Rupert Murdoch is American, and for exactly the same reasons.

Not hard to work out.

[shirtless]

If they start down this path they will end up losing Investors have better choices now and many i think are tired of the Thai system.

[Spoonman]

You do know that Pizza Company is owned by the Minor Food Group which is owned by a Thai person don't you.

Bill Heinecke may have "Thailand" stamped on the front of his passport but he still doesnt look very Thai to me.

What are you saying ???? A new law coming out that says you must not only be Thai, but now you must LOOK Thai ????55555

+1 William Heinecke is Thai and this for a long time already. I know many farangs that are Thai.

@Spoonman - You are wrong - Minor Food is owned by Minor International and the Heinecke family controls 60%. The other shares are held by Banks on behalf of nominees and his HM has 2% in shares as well. Minor Food was delisted on the SET a long time ago.

My bad, I should have said Pizza Company is owned by Minor Group which is a 100% owned subsidiary of Minor International. A company which was founded by William Heinecke who a Thai person.

[Rimmer]

DSI Holds Seminar About Foreign Businesses In Pattaya

PATTAYA – August 21, 2014 [Pattaya Daily News];- at 09.00 am at Nong nooch Garden Pol.Lt.Col.Pongin Indarakaw-commander of the Department of Special Investigation- chaired the opening ceremony of seminar for preventing wrongdoings of foreigners in Pattaya. At the ceremony were Ms.Umaporn Prapasert-director of information section-, DSI officers, officers of DBD (Department of Business Development), TAT (Tourism Authority of Thailand) and hoteliers.

Pol.Lt.Col.Pongin revealed that according to the policy which Thailand had promoted and supported free trade, foreign investors had invested in Thailand more and more. As a result it affected the SME in the local area because the foreign investors had dominated businesses such as restaurants, laundry services, Thai massage, tour guides and spas.

Therefore the Department of Special Investigation held a seminar in order to reach a goal to stop this kind of business. They aimed to run the project in Pattaya first because there were a lot of foreign investors.

Full story:http://www.pattayadailynews.com/pattaya-news/dsi-holds-seminar-foreign-businesses-pattaya/

-- Pattaya Daily News 2014-08-23

[JesseFrank]

Companies in Thailand don't have 51% foreign ownership, they have 51% Thai ownership.

Bent is a company with 51% of shareholders that have nothing to do with the company and are only straw men.

Bent is a company that is set up for the only purpose of owning a property, but has no real activities, and declares some fictitious business dealing on it's balance sheet at the end of the year.

Bent is a company that declares fictitious yearly shareholding meetings, including some shareholders that may have already deceased a few years.

Bent is a company that has forced his shareholders to sign an undated share transfer document .

You want some more definitions of bent ?

That is the issue. Define straw men. There are literally hundreds of companies where Thais have been gifted shares by family where the owner has less than 51% but still exercises full control by using share classes.

The only difference here is whether the minority owner is Thai or foreign.

Why would a Thai have to gift shares to family members to hold control of a company. A Thai can hold 98% of the shares of a company LTD, have 2 minority shareholders of each 1%.

[Ling Kae]

I've never seen a farang running and washing cloths in a laundry for anyone anywhere in Thailand. Their Thai partners might but not the farangs themselves. They really come out with some nonsense, just because a farang might live with his wife who does run a laundry doesn't make it a farang business.

[JesseFrank]

Pol.Lt.Col.Pongin revealed that according to the policy which Thailand had promoted and supported free trade, foreign investors had invested in Thailand more and more.

Another example of, we promote investing in Thailand but actually we are not serious about it, the only thing we want is your money.

Edited August 23, 2014 by JesseFrank