Phuket firms face DSI probe over alleged use of nominees

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NOMINEE
Phuket firms face DSI probe over alleged use of nominees
Petchanet Pratruangkrai
The Nation

PHUKET: -- Four Phuket companies will soon face an in-depth probe by the Department of Special Investigation for possibly circumventing the Foreign Business Act by letting Thai nominees hold a majority stake.

The Commerce Ministry will next check for such cases in Chiang Mai.

Pongpun Gearaviriyapun, director-general of the ministry's Business Development Department, said last week that three companies were found operating in tourism and one in real estate. Foreigners are forbidden from owning more than 50 per cent of such companies.

In cooperation with the DSI and the Tourism Ministry, the department has investigated more than 80 suspect firms in Phuket province and determined that four firms were highly likely to have breached the law.

As part of the investigation, the department has asked those companies' shareholders to speak to its legal officers.

The department will also question the companies' directors and examine their records. If any have committed offences, their cases will be forwarded for prosecution.

Offenders, both foreigners and local nominees, could face a fine of Bt100,000-Bt1 million and/or three years in prison. If the company does not correct its shareholding structure, it will also be fined Bt10,000-50,000 a day until it conforms to the law.

The department has checked into Bangkok, Pattaya, Samui and Hua Hin and found more than 10 suspect nominee cases, which are now being examined under the legal process.

Working with the Tourism Ministry and the DSI, the department is closely scrutinising the travel industry this year to prevent nominee cases, as they could affect national stability, the economy and society.

Under the Foreign Business Act of 1999, Thailand does not allow foreign interests to hold more than 50 per cent of some types of businesses, such as telecommunications, rice milling, property development, media and tourism services. However, some foreigners have used Thai nationals as nominees to run such businesses.

The businesses listed in Appendix III of the FBA cover those in which Thais are not yet ready to compete with foreigners. Businesses protected for Thais include those in the retail and wholesale sectors.

Although it is stringently overseeing companies' shareholding structure, the department suggests that enterprises register with the department legally, while any firm wanting to engage in a business related to tourism will also need to register and get a business licence from the Tourism Department.

This stringent measure is aimed at protecting travellers from getting scammed by unscrupulous enterprises.

Source: http://www.nationmultimedia.com/business/Phuket-firms-face-DSI-probe-over-alleged-use-of-no-30265248.html


-- The Nation 2015-07-27

[FangFerang]

"The Commerce Ministry will next check for such cases in Chiang Mai." -- all the yellow territories are safe and sound.

[Colabamumbai]

All this protection makes Thai's lazy, without competition there is no progress.

[KarenBravo]

They only found four??!!

[hansgruber]

They only found four??!!

The four that didn't pay.

[bongoz]

"Working with the Tourism Ministry and the DSI, the department is closely scrutinising the travel industry this year to prevent nominee cases, as they could affect national stability, the economy and society."

[Valentine]

"The Commerce Ministry will next check for such cases in Chiang Mai." -- all the yellow territories are safe and sound.

I fail to understand what relevance does your comment have to do with the topic?

[konying]

I wonder when they would start investigating Thai owned and operated businesses, half of which are not even registered companies ie pay no tax, others do not comply with minimum wage nor pay social security or have any licences to operate.

Then those with poor safety measures.

They might triple tax revenue if they actually bother to do something right

[arfurcrown]

Yet again visibly demonstrated the Thai viewpoint that there is only one way and it's their way no matter what their rules must apply .

The country is slowly but surely descending into the status of a third world manufacturing country yet the arcane laws governing foreign ownership of business enterprises must be upheld at all cost.

Protectionism must survive no matter what so as the few can cripple the country for their own benefit.

The writing is on the wall neighboring countries are relaxing ownership rules regarding property ,business investment visa's etc yet Thailand carries on walking backwards to insolvency with its antiquated feudal practices.

Will they, can they, *(the administrators of this fair land) ever learn the lessons of reality ?

Edited July 27, 2015 by Rimmer

[eisfeld]

When countries start to struggle they usually also get more protective which only worsens their problems. Thailand only got to the current state through foreign investments and tourism. It is nigh impossible to run a business here if you want to stay completely legal as a foreigner and still retain control. Hong Kong, Singapore etc are thriving because of how easy it is to do business there.

They have to relax their regulations for businesses, land ownership etc if they want to stay competitive in the near future as other countries around them open up while providing cheaper labor.

Apart from the ease of doing business, there is another important factor: stability. You can have the easiest rules for companies in the world but in the end it means nothing if your police force and officials are corrupt through and through and don't enforce any laws. Same with the whole judiciary. You'll only attract fishy businesses.

[PS2]

"The Commerce Ministry will next check for such cases in Chiang Mai." -- all the yellow territories are safe and sound.

wow, When did Phuket, Prachuap Khiri Khan and Suratthani become red....

Edited July 27, 2015 by PS2

[Mudcrab]

Could be a few of the "I own many properties using the company route" posters feeling a little nervous right now?

[konying]

Could be a few of the "I own many properties using the company route" posters feeling a little nervous right now?

Why? They not investigating ownership of property but real estate and tourism related companies

[KarenBravo]

Could be a few of the "I own many properties using the company route" posters feeling a little nervous right now?

They'll never open up that can of worms.

Too many very important people involved in the construction industry.

[NamKangMan]

Could be a few of the "I own many properties using the company route" posters feeling a little nervous right now?

They'll never open up that can of worms.

Too many very important people involved in the construction industry.

Never say never in Thailand.

I think the clock is ticking on the eventual opening of that "can of worms."

[Blitzkrieg Bob]

So will later then a newly-built "Commitee for Business Investor in Thailand" short and catchy CBIT "lure" new investors into pumping their money into Thailand to receive a mindboggling 49% of their 100% investment? Wouldn't that be something...

Edited July 27, 2015 by Blitzkrieg Bob