Thai Nominee Shareholding Crackdown in Pattaya announced by DSI

[Rorri]

chris2004, on 22 Aug 2014 - 14:22, said:

This was always illegal. If people took the risk and now get caught out it's their own fault. Their country, their rules and laws.

Not and never was "illegal", there is a legal loophole. Please read "LEGAL."

The Foreign Business Act was a law enacted by the Chuan Leekpai-controlled National Legislative Assembly of Thailand in 1999 that limited foreign ownership of certain Thai industries. Its predecessor was the Alien Business Act of 1972, enacted by a military junta. Industries which must be majority-owned by Thais included the newspaper business, radio stations, television stations, rice farming, animal husbandry, fishing, land trading, mining, wholesaling and retailing, restaurants, and all service businesses. The law criminalized nominees, any Thai who held shares on behalf of a foreigner. Nominees could be fined 100,000 to 1 million baht and face up to 3 years in prison. 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.

[gringo99]

If ur rich why u need buy something .just wonder

[bander]

Its outrageous, how can a falang by a house and land in a company name with 51% Thai and 49% falang shareholders. Must be the biggest crime in Southeast Asia.

Maybe if Thais get 100% of the shares it wold be accepted?

[Kru Baa]

The Ministry of Commerce, The Tourism Authority. The Committee of this and that and the Association of making it up as we go along, do nothing but have meetings. If any of them actually did any work instead of just having meetings they might actually have an economy of their own rather than trying to milk the foreigners that are here holding it up.

[JesseFrank]

chris2004, on 22 Aug 2014 - 14:22, said:

This was always illegal. If people took the risk and now get caught out it's their own fault. Their country, their rules and laws.

Not and never was "illegal", there is a legal loophole. Please read "LEGAL."

The Foreign Business Act was a law enacted by the Chuan Leekpai-controlled National Legislative Assembly of Thailand in 1999 that limited foreign ownership of certain Thai industries. Its predecessor was the Alien Business Act of 1972, enacted by a military junta. Industries which must be majority-owned by Thais included the newspaper business, radio stations, television stations, rice farming, animal husbandry, fishing, land trading, mining, wholesaling and retailing, restaurants, and all service businesses. The law criminalized nominees, any Thai who held shares on behalf of a foreigner. Nominees could be fined 100,000 to 1 million baht and face up to 3 years in prison. 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.

The subject of this thread isn't that foreigners held control of a Thai company through legal ways like preference shares, but the fact that the shareholders are straw men who don't have any real interest in the company.

Also the problem is that a company that owns a property has to do REAL business, and not just add some fake business deals to the balance sheet at the end of the year, as is the reality with most companies that were set up with that purpose.

Edited August 22, 2014 by JesseFrank

[chrisinth]

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Hmmmmmm, wonder if there will be a mass exodus of farang bar "owners".... alt=whistling.gif>

I was thinking more about the foreigners that were told they can legally own their property by forming 'paper' companies. If they are truly going to come down hard across the board, these are the folk I feel sorry for.

Something that appears too good to be true, generally isn't...................

[bander]

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loppylugs1, on 22 Aug 2014 - 10:44, said:

Rorri, on 22 Aug 2014 - 10:37, said:

carstenp, on 22 Aug 2014 - 08:24, said:carstenp, on 22 Aug 2014 - 08:24, said:

I feel sorry for the foreigner using Thai Nominee Shareholding to keep control of the land, and house for millions of bt to protect there investment, but they know it was illegal in the beginning

In the end, is all about money and keep them safe in Thailand

Please, show me where, in Thai law, that it was/is illegal. As far as I can determine ALL conditions were met. If they wanted to make it "illegal" Thailand had ample opportunities to close any legal loop holes. As far as I'm concerned it appears Thailand now believes it has everything it needs, from foreign investment, and now wants it all to itself.

Thailand took a blind eye to this,new govt will not. Never was legal for farang to own land,never mind the house that stood on it. Even the company that owned the land/house was Thai owned,so farang owned nothing

Loopholes were created to shovel more money into the scheme of things,now farang going to get fingers burnt

Um, it is "legal" to own the house...and according to law, through a company to own land. The loophole is there, and allowed by the government.

Time to change the law Somsak, let thai owns everything and the buyer of the land and house (falang) owns nothing. If they want to get rid of all the foreigners here just keep on with what their doing now.

[puipuitom]

You understand now why I left Thailand in 2006 ?

[carstenp]

After about 8 pages I will try to explain what to do to "own" legal right for house and land.

The right way is using usufruct on land.

Let a thai buy it registered it as usufruct for lifetimes with you name in thai on the backside

Make the thai to sign a paper, where she is unable to claim the land, borrow money in it and so on.

He/she will not be able to go to the bank and borrow money on it.

You has now a land and house for you lifetime. He/she will then get it when you die

The laws

Under Thai Law, the owner of a piece of land (immovable property) can grant the right of usufruct to another person, or many people, foreigners or not. The person receiving this right of usufruct is called usufructuary. The usufructuary can enjoy, use and possess the land for a limited period of time (maximum 30 years) or for his lifetime (even more than 30 years).

Following a Supreme Court judgment, a usufruct agreement must be registered to be valid. And you

can only register a usufruct contract on land having title deeds Nor Sor Sam or higher (like Chanote).

You must register a usufruct agreement at the local land department.

A usufruct is a real right. It means that it's attached to a thing, meaning the immovable property.

Even if the owner of the land die, or if the land is sold, the usufructuary will keep his right to stay on this piece of land. Usufruct agreements are a very easy way to protect a foreigner married to a Thai spouse, in case something happens to her.

This usufruct contract ends at when the usufructuary dies (if it's done for lifetime) or when the period of time is expired according to the contract.

Sections 1417 to 1428 of the Thai Commercial and Civil Code are related to usufruct contract in T

hailand.

Edited August 22, 2014 by carstenp

[darkian]

The writing is on the wall boys , might be time to get outta Dodge ! Malaysia , Cambodia and Vietnam looking better and better every day ! Yes this crackdown is whats needed to fix the ills of the kingdom

This is a big barrier to potential foreign investors, and I think of this every time some idiot says to someone wanting to be self employed here that they should get 4 staff etc - the big problem is shareholding. Unless you are genuinely working with a Thai partner '50/50', then what do you do? Also last time I read the Foreign Business Act, the nominee shareholder was not allowed to be a spouse either if the sole purpose of that shareholding was as a nominee/workaround. So I don't think just putting it in the wife's name is an option.

By contrast Hong Kong makes all this stuff way easier, so lots of people I know have foreigner owned companies there. They can own 100% or use a nominee director/shareholder if they wish. I appreciate that Thailand wants to protect itself, but ultimately is this really for the better of the country? Because the sad truth is that a lot of the law-bending/breaking benefits Thailand.

Begs the question, why Pattaya and not Bangkok? Are they too worried about the implications of doing it there?

[gigman]

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.

Let's just call it discrimination.

[schweizer]

After about 8 pages I will try to explain what to do to "own" legal right for house and land.

The right way is using usufruct on land.

Let a thai buy it registered it as usufruct for lifetimes with you name in thai on the backside

Make the thai to sign a paper, where she is unable to claim the land, borrow money in it and so on.

He/she will not be able to go to the bank and borrow money on it.

You has now a land and house for you lifetime. He/she will then get it when you die

At least until your Thai house owner invites you on a free holiday to the Chaing Mai tiger park, accidents will happen :-)

[Christie Paul]

They want to hope that they don't catch too many trusting Russians in their bait and switch schemes - as it may end unpleasantly.

[gringo99]

In Europe its call racist . Wonder how they call in thailand

I

Edited August 22, 2014 by gringo99

[petercool]

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[carstenp]

After about 8 pages I will try to explain what to do to "own" legal right for house and land.

The right way is using usufruct on land.

Let a thai buy it registered it as usufruct for lifetimes with you name in thai on the backside

Make the thai to sign a paper, where she is unable to claim the land, borrow money in it and so on.

He/she will not be able to go to the bank and borrow money on it.

You has now a land and house for you lifetime. He/she will then get it when you die

At least until your Thai house owner invites you on a free holiday to the Chaing Mai tiger park, accidents will happen :-)

Well I can only say, then you don't need the land and house anymore. Problem solved

[JesseFrank]

After about 8 pages I will try to explain what to do to "own" legal right for house and land.

The right way is using usufruct on land.

Let a thai buy it registered it as usufruct for lifetimes with you name in thai on the backside

Make the thai to sign a paper, where she is unable to claim the land, borrow money in it and so on.

He/she will not be able to go to the bank and borrow money on it.

You has now a land and house for you lifetime. He/she will then get it when you die

At least until your Thai house owner invites you on a free holiday to the Chaing Mai tiger park, accidents will happen :-)

When I registered the land I purchased in the name of a long time Thai friends name, I went to a lawyer, who explained the following to me.

He told me there are two way to go.

1. Register a long term lease or usefruct on the land at the land department.

2. Register a considerable amount of mortgage on the land, from which you are beneficiary, at the land department.

He added, however option 1 is completely legal, it gives you a reason to die. While if you die with option 2, the mortgage contract will transfer to your legal heirs.

[Living in a cartoon]

After about 8 pages I will try to explain what to do to "own" legal right for house and land.

The right way is using usufruct on land.

Let a thai buy it registered it as usufruct for lifetimes with you name in thai on the backside

Make the thai to sign a paper, where she is unable to claim the land, borrow money in it and so on.

He/she will not be able to go to the bank and borrow money on it.

You has now a land and house for you lifetime. He/she will then get it when you die

The laws

Under Thai Law, the owner of a piece of land (immovable property) can grant the right of usufruct to another person, or many people, foreigners or not. The person receiving this right of usufruct is called usufructuary. The usufructuary can enjoy, use and possess the land for a limited period of time (maximum 30 years) or for his lifetime (even more than 30 years).

Following a Supreme Court judgment, a usufruct agreement must be registered to be valid. And you

can only register a usufruct contract on land having title deeds Nor Sor Sam or higher (like Chanote).

You must register a usufruct agreement at the local land department.

A usufruct is a real right. It means that it's attached to a thing, meaning the immovable property.

Even if the owner of the land die, or if the land is sold, the usufructuary will keep his right to stay on this piece of land. Usufruct agreements are a very easy way to protect a foreigner married to a Thai spouse, in case something happens to her.

This usufruct contract ends at when the usufructuary dies (if it's done for lifetime) or when the period of time is expired according to the contract.

Sections 1417 to 1428 of the Thai Commercial and Civil Code are related to usufruct contract in T

hailand.

Then the Thai family just needs to get rid of you.

Sorry, couldn't resist...

[bertty]

I guess the Thai's have looked at the business model of other countries, USA U.K. Europe, And decided that letting anyone and everyone into your country might not always be the best idea.

Trillions in debt , Every other person wants to start their own religion, etc etc.

Who's to say they are wrong ?

[tomacht8]

Thai Nominee Shareholding Crackdown in Pattaya announced by DSI

Such messages certainly do not promote the investment climate.
It's not like the DSI fights organized crime and money laundering here,
but going against the little ones, like family shops, restaurants, bars, travel agencies, diving schools, language schools, etc.

The advice can only be: Do not start any business with a LTD, if your have not 3 active Thai partners with equal captal.
To open a business with 100% Foreign capital is calculated then only for the investor 49% business share.
From a business perspective this is really moronic.

Edited August 22, 2014 by tomacht8

[Mr Yim]

It was said on more than one occasion during the protests, that Suthep and his cohorts do not like foreigners. I fear that even those of us who comply completely with all visa requirements and "ownership" of property are in for a tough time under the current reforms.

[Bluedan]

it is illegal to have nominee shareholders. This is clear.

So to own and run a business in Thailand (except for Americans who have a treaty) one must find genuine Thai investors who actually invest capital commensurate with their shareholding, and hope that they don't rip you off.

anyone know someone who has managed this?

ownership of land is also illegal, and of course through a Thai company with nominees as outlined above. However there is also an argument that the so called 30 plus 30 year leases are defacto ownership of land as are purchases by a foreigner's Thai spouse, and these could also be found to technically breach the land ownership laws.

as other posters have said these practices have not only been encouraged and allowed by officials and professionals working in the field, but have also greatly enriched many Thais who make a business from Law, accounting, visa runs, not to mention the public officials who demand and accept bribes, and the many affiliated industries and flow on expenditure from having the expats concerned reside in the Kingdom.

[Tatsujin]

It was said on more than one occasion during the protests, that Suthep and his cohorts do not like foreigners. I fear that even those of us who comply completely with all visa requirements and "ownership" of property are in for a tough time under the current reforms.

The "other side" didn't like foreigners either.

And yes, looks like we're heading for rough times and changes across the board. It's 2006 all over again.

[cacruden]

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.

You are one of the lucky ones. My American friend has been married to a Thai for 15 years and she has never been granted a visa to visit US, even to attend his father's funeral.

Depends on the person. My Thai GF (not wife) got a 10 year business and tourist visa with 180 day entries.

I am guessing that is just a tourist visa that means she is qualified to visit the US (equivalent to a visa waiver for Canadians for 180 days per year). Thais are not qualified for visa waivers. She however is precluded from earning money through work in the US. i.e. the US has determined that she is not likely to become an illegal alien working in the US.

Edited August 22, 2014 by cacruden

[gringo99]

Rent better than buy in Thailand

[cacruden]

it is illegal to have nominee shareholders. This is clear.

So to own and run a business in Thailand (except for Americans who have a treaty) one must find genuine Thai investors who actually invest capital commensurate with their shareholding, and hope that they don't rip you off.

anyone know someone who has managed this?

ownership of land is also illegal, and of course through a Thai company with nominees as outlined above. However there is also an argument that the so called 30 plus 30 year leases are defacto ownership of land as are purchases by a foreigner's Thai spouse, and these could also be found to technically breach the land ownership laws.

as other posters have said these practices have not only been encouraged and allowed by officials and professionals working in the field, but have also greatly enriched many Thais who make a business from Law, accounting, visa runs, not to mention the public officials who demand and accept bribes, and the many affiliated industries and flow on expenditure from having the expats concerned reside in the Kingdom.

30 + 30 year leases ARE illegal and unenforceable. 30 years is the maximum legal length of a lease and promises beyond that are not legal.

[watcharacters]

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.

I think you missed his point ATF, but more power to you anyway.

[BernieOnTour]

The Government should think about what it will cost to Thailand if all those investing foreigners and contributers to the well being of many Thai families will leave Thailand...

More likely, certain influential groups are more betting on taking over these companies at rock bottom prices and then run the biz by themselves or getting hold of the land to build their own hotel or whatsoever there...

[Bernard Flint]

Thai Nominee Shareholding Crackdown in Pattaya announced by DSI

Such messages certainly do not promote the investment climate.

It's not like the DSI fights organized crime and money laundering here,

but going against the little ones, like family shops, restaurants, bars, travel agencies, diving schools, language schools, etc.

The advice can only be: Do not start any business with a LTD, if your have not 3 active Thai partners with equal captal.

To open a business with 100% Foreign capital is calculated then only for the investor 49% business share.

From a business perspective this is really moronic.

Sounds advise, but you are a few years too late

Edited August 22, 2014 by Bernard Flint

[Bernard Flint]

Rent better than buy in Thailand

Not for me, been here 12 years, AND NOT FOR THE LONG TERM EXPATS WHO HAVE LIVED LONGER.Saves on rent,and house appreciates in value, or should i say most land appreciates in value.

Waiting for, YOU CANNOT OWN LAND FALUNG/FALANG/ FARANG.