Crack down on illegal nominees to continue, Phuket law and account firms to be targeted

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Crack down on illegal nominees to continue, Phuket law and account firms to be targeted
The Phuket News


Minister of Tourism and Sports Kobkarn Wattanavrangkul speaks at yesterday's (Mar 7) meeting to discuss illegal nominees. Photo: PR Dept

PHUKET: The Minister of Tourism and Sport has said that the crack down on companies using illegal nominees will continue and that the best way to deal with them is to strictly enforce the laws on illegal businesses and crack down on their accounting and law firms.

The announcement came from Minister of Tourism and Sports Kobkarn Wattanavrangkul yesterday (Mar 7) when she visited Phuket to preside over a meeting held to follow up on the crack down on illegal nominee companies on the island.

Also attending the meeting were Governor Chamroen Tipayapongtada, Vice Governor Prajiad Aksornthamkul, Tourism and Sport Chief Santi Pawai, Phuket City Police Col Saman Chainarong and others official.

Ms Kobkarn said, “We are holding this meeting because on February 23 the Council of Ministries ordered my department, the Ministry of Commerce, Ministry of Interior, Ministry of Tourism and Sport and other agencies to crack down on illegal nominees.

“We had a meeting about this at the beginning of February to evaluate our procedures and regulations which included investigating businesses with an aim of preventing the use of illegal nominees,” she said.

“We want to prevent foreign investors/businessmen from working illegally in Thailand without paying taxes,” she added.

Full story: http://www.thephuketnews.com/crack-down-on-illegal-nominees-to-continue-phuket-law-and-account-firms-to-be-targeted-56512.php


-- Phuket News 2016-03-08

[LivinginKata]

We want to prevent foreign investors/businessmen from working illegally in Thailand without paying taxes,

The most important thing of all is that businesses must pay taxes as per the law,

Not sure what they are talking about. To work in Thailand a work permit is required and any compnay sponsoring a foreigner must show company accounts and tax paid, thereafter for WP renewal the applicant must show income tax paid.

[aRobotnamedWAR]

Phuket. is in serious doodoo. many thai nominees have stolen everything from the business they were supposed to represent. ... with the help of the phuket mafia/bank/lawfirms they can do what ever they want. thats why they have to slowly target their source of protection. Some of the deviously deceitful phuket locals are about to feel what happens when they LIE AND CHEAT EVERYONE.

Of the 20 new business i helped start up this year. .. NONE will ever touch phuket. And any other business i help set up this remaining year, NONE SHALL GIVE PHUKET A SINGLE SATANG. I refuse to jeopardize my clients and taint my loyal customer base with scum of phuket.

AND UNTILL A CERTAIN BANKER AND LAWYER GOES TO JAIL.... FOR THE LIES AND LIVES THEY STOLE/DESTROYED, i will continue to assume all phuket residence are scum. Sorry, if you happen to be a nice guy on phuket. thats life.

[Goldieinkathu]

At last a crack down on Thai accounting and law firms - long overdue in my mind. We all have to put our lives in the hands of these people in order to do business here and over the years this has cost many dearly. Bad advice and illegal advice has often been given just for them to make money, it's time the bad ones were weeded out!

[shirtless]

Who would investing in Phuket now I keep hearing its very quiet , Crackdowns like this wont help the economy either .You keep on hammering those nails into your coffin,

[NongKhaiKid]

What's the Minister of Tourism involved for, has she figured out no one believes her BS about tourist arrivals etc and is trying to remain relevant ?

[Reigntax]

What's the Minister of Tourism involved for, has she figured out no one believes her BS about tourist arrivals etc and is trying to remain relevant ?

The minister for Tourism and sport is involved because its hunting season for farang wealth.

[LivinginKata]

<snip>

AND UNTILL A CERTAIN BANKER AND LAWYER GOES TO JAIL.... FOR THE LIES AND LIVES THEY STOLE/DESTROYED, i will continue to assume all phuket residence are scum. Sorry, if you happen to be a nice guy on phuket. thats life.

I hope you don't consider me scum ... we registered our limited company almost 17 years ago, wife and I did it without any lawyer or accountant, just asked help from the manager of the company registration office in Phuket Town. File our business acounts every year, pay any company taxes, income taxes, and property taxes.

In our first year we made the mistake of engaging an accredited accounting company to take care of our annual company accounts, they were very late in filing and we paid a big fine to the tax office. Never again. Since then we use a trusted accountant lady. I can you tell many stories about newbies being ripped off by lawyers and accountant companies promising the world, charging big fees, and not delivering ...

Edited March 8, 2016 by LivinginKata

[grumpyoldman]

Wouldn't worry too much about this guy's post LIK, first I've ever seen in the Phuket Forum and what 103 total? Yahooos comin outta the wordworks.....

I am curious though how this effects certain property owners who set up shell corporations so that they can own the company and thus own some land. I think those types might be worried with this news.

[eisfeld]

Never have I seen a place where lawyers are so crooked as Phuket. They have to clean up this mess with one swipe and enforce proper rules and build trust over time but I doubt it's gonna happen.

And the ridiculous statement that they need to crack down on illegal nominees in order to enforce tax payments? These nominees are not used to evade taxes. They are used because the business owner otherwise can't conduct business at all unless they have some other Thais who can join the business and hold 51%. If you remove the possibility of these nominees then what you really end up with is foreigners working illegally and paying NO TAX whatsoever apart from bribes to the BIB.

If you want more revenue then you need to incetivize company formations and not crack down on companies who try to operate despite the stupid roadblocks.

Look at successful economies like most western countries or Hong Kong, Singapore etc. They make it extremely easy to open and operate a business, let foreigners own 100% of the shares and don't have idiotic rules like 4 locals for each foreign employee. Clear rules, ease of doing business, honest lawyers and courts plus a sensible tax system is all it takes. But hey, why copy a proven and successful model when you can just mess around and muck things up real good?

[Deli]

And when will they start to crack down the Taxi / Tuk Tuk / Touts / Iguana / Time Share / Pick Pocket / Yaba Sell cartel ?

Ahhh, they would have to crack down themselves, maybe not a bad idea, though

[Tatsujin]

What a load of <deleted> the tax excuse is.

It's the Thai companies, large and small who avoid paying taxes, not "foreign" owned companies who ALL have to show taxes paid to maintain Work Permits.

[Nip]

Phuket. is in serious doodoo. many thai nominees have stolen everything from the business they were supposed to represent. ... with the help of the phuket mafia/bank/lawfirms they can do what ever they want. thats why they have to slowly target their source of protection. Some of the deviously deceitful phuket locals are about to feel what happens when they LIE AND CHEAT EVERYONE.

Of the 20 new business i helped start up this year. .. NONE will ever touch phuket. And any other business i help set up this remaining year, NONE SHALL GIVE PHUKET A SINGLE SATANG. I refuse to jeopardize my clients and taint my loyal customer base with scum of phuket.

AND UNTILL A CERTAIN BANKER AND LAWYER GOES TO JAIL.... FOR THE LIES AND LIVES THEY STOLE/DESTROYED, i will continue to assume all phuket residence are scum. Sorry, if you happen to be a nice guy on phuket. thats life.

Clearly many foreigners have fallen foul to the corrupt lawyers, moneylenders and bankers on Phuket .... They operate with impunity and confidence and will continue to do so until those defrauded brave up and pool their knowledge and experiences. Please anybody who has experience and wants to share please contact me in confidence. Money laundering and identity theft is the lifeblood of the corruption in Phuket. Nobody can purchase or lease a property in Phuket in confidence. You can loose everything within 24 hours and have no idea until you have lost everything and don't expect the judicial system to assist you.

[madmitch]

I had such a company set up for me several years ago by a reputable Bangkok-based law firm who to this day are a Thaivisa sponsor. Yes, I used it to buy a Phuket-based business but for several reasons, one of which was that I realised it was illegal, I closed it down a few years ago. As far as I know it was absolutely normal to set up companies with unknown nominees back then. And, as GOM said, those with properties purchased with such a company should be a bit worried.

There are probably many naive individuals out there who may be punished for something they didn't realise was wrong. I think it's absolutely right to go after the lawyers and accountants. I also see no reason, finances aside, that if someone does lose money or property as a result of this, a lawsuit against the lawyers and accountants shouldn't be a consideration.

Edited March 8, 2016 by madmitch

[IAMHERE]

What's the Minister of Tourism involved for, has she figured out no one believes her BS about tourist arrivals etc and is trying to remain relevant ?

Could be she is doing a 'favor' for some other minister. Much in the orient seems to be inscrutable.

[steelepulse]

Wow, another year has passed already? This old chestnut gets brought up every year to put the scare on. Maybe one year they will actually enforce this, but like most laws, and North Korea, lots of bluster and not much action.

[useronthenet]

I think the penny has finally dropped. Foreigners realizing they have zero footprint in Thailand.

Come here to holiday sure, but to do business or invest, definitely not !

[Srikcir]

The Thai government has yet to face the impact of ASEAN-owned nonThai companies who now have the right to conduct unimpeded business in Thailand.

If Thailand doesn't amend its laws to allow foreign majority owned ASEAN businesses, Thailand may find itself as the Hub of the Forgotten.

[metisdead]

Off topic posts and replies have been removed.

[Acharn]

Never have I seen a place where lawyers are so crooked as Phuket. They have to clean up this mess with one swipe and enforce proper rules and build trust over time but I doubt it's gonna happen.

And the ridiculous statement that they need to crack down on illegal nominees in order to enforce tax payments? These nominees are not used to evade taxes. They are used because the business owner otherwise can't conduct business at all unless they have some other Thais who can join the business and hold 51%. If you remove the possibility of these nominees then what you really end up with is foreigners working illegally and paying NO TAX whatsoever apart from bribes to the BIB.

If you want more revenue then you need to incetivize company formations and not crack down on companies who try to operate despite the stupid roadblocks.

Look at successful economies like most western countries or Hong Kong, Singapore etc. They make it extremely easy to open and operate a business, let foreigners own 100% of the shares and don't have idiotic rules like 4 locals for each foreign employee. Clear rules, ease of doing business, honest lawyers and courts plus a sensible tax system is all it takes. But hey, why copy a proven and successful model when you can just mess around and muck things up real good?

You may be right that they would gain more revenue by making it easier for foreigners to run their own companies, but I suspect you don't know very much about Thai history. Like China, although Thailand wasn't actually invaded and occupied, they did have to accept what were called "unequal treaties," which provided that foreign residents were not subject to Siamese law but in any disputes the Thai would have to accept the jurisdiction of a foreign court set up in Bangkok. Of course few Thais knew anything about European legal procedures. Then there were cases of foreign companies using the threat of invasion to coerce the government into granting them "concessions" for timber cutting and mining. That has a lot to do with why the revolutionary government, especially during the periods when Phibul Songkhram was Prime Minister. He was also surrounded by reactionaries and ultra-nationalists who thought the Japanese ides of an East Asian Co-Prosperity Sphere would be wonderful. There was a lot of support among the anti-monarchists to ally with Japan even before the incursion in December 1941. So given this background and the paranoia it engendered among the highest ranks of the nobility it might be understandable why they would not want to let foreigners prosper too much in the country they regard as their own.

[eisfeld]

Never have I seen a place where lawyers are so crooked as Phuket. They have to clean up this mess with one swipe and enforce proper rules and build trust over time but I doubt it's gonna happen.

And the ridiculous statement that they need to crack down on illegal nominees in order to enforce tax payments? These nominees are not used to evade taxes. They are used because the business owner otherwise can't conduct business at all unless they have some other Thais who can join the business and hold 51%. If you remove the possibility of these nominees then what you really end up with is foreigners working illegally and paying NO TAX whatsoever apart from bribes to the BIB.

If you want more revenue then you need to incetivize company formations and not crack down on companies who try to operate despite the stupid roadblocks.

Look at successful economies like most western countries or Hong Kong, Singapore etc. They make it extremely easy to open and operate a business, let foreigners own 100% of the shares and don't have idiotic rules like 4 locals for each foreign employee. Clear rules, ease of doing business, honest lawyers and courts plus a sensible tax system is all it takes. But hey, why copy a proven and successful model when you can just mess around and muck things up real good?

You may be right that they would gain more revenue by making it easier for foreigners to run their own companies, but I suspect you don't know very much about Thai history. Like China, although Thailand wasn't actually invaded and occupied, they did have to accept what were called "unequal treaties," which provided that foreign residents were not subject to Siamese law but in any disputes the Thai would have to accept the jurisdiction of a foreign court set up in Bangkok. Of course few Thais knew anything about European legal procedures. Then there were cases of foreign companies using the threat of invasion to coerce the government into granting them "concessions" for timber cutting and mining. That has a lot to do with why the revolutionary government, especially during the periods when Phibul Songkhram was Prime Minister. He was also surrounded by reactionaries and ultra-nationalists who thought the Japanese ides of an East Asian Co-Prosperity Sphere would be wonderful. There was a lot of support among the anti-monarchists to ally with Japan even before the incursion in December 1941. So given this background and the paranoia it engendered among the highest ranks of the nobility it might be understandable why they would not want to let foreigners prosper too much in the country they regard as their own.

It's good to know where things originate but it doesn't change the facts of the present nor does it make the decisions even right.

And by the way, both Singapore and Hong Kong were invaded and occupied in the past. Notably by Britain and Japan. That hasn't prevented them from being open to foreigners. There's a big difference between being invaded/threatened using military force and having foreigners own businesses and property in a country.

[No1inbangkok]

Excuse my ignorance but if a Thai holds 51% of a foreign company with limited voting rights. What is the major danger in this?

How will the authorities prove that a Thai is a nominee or actively involved in the company?

[Orac]

Never have I seen a place where lawyers are so crooked as Phuket. They have to clean up this mess with one swipe and enforce proper rules and build trust over time but I doubt it's gonna happen.

And the ridiculous statement that they need to crack down on illegal nominees in order to enforce tax payments? These nominees are not used to evade taxes. They are used because the business owner otherwise can't conduct business at all unless they have some other Thais who can join the business and hold 51%. If you remove the possibility of these nominees then what you really end up with is foreigners working illegally and paying NO TAX whatsoever apart from bribes to the BIB.

If you want more revenue then you need to incetivize company formations and not crack down on companies who try to operate despite the stupid roadblocks.

Look at successful economies like most western countries or Hong Kong, Singapore etc. They make it extremely easy to open and operate a business, let foreigners own 100% of the shares and don't have idiotic rules like 4 locals for each foreign employee. Clear rules, ease of doing business, honest lawyers and courts plus a sensible tax system is all it takes. But hey, why copy a proven and successful model when you can just mess around and muck things up real good?

You may be right that they would gain more revenue by making it easier for foreigners to run their own companies, but I suspect you don't know very much about Thai history. Like China, although Thailand wasn't actually invaded and occupied, they did have to accept what were called "unequal treaties," which provided that foreign residents were not subject to Siamese law but in any disputes the Thai would have to accept the jurisdiction of a foreign court set up in Bangkok. Of course few Thais knew anything about European legal procedures. Then there were cases of foreign companies using the threat of invasion to coerce the government into granting them "concessions" for timber cutting and mining. That has a lot to do with why the revolutionary government, especially during the periods when Phibul Songkhram was Prime Minister. He was also surrounded by reactionaries and ultra-nationalists who thought the Japanese ides of an East Asian Co-Prosperity Sphere would be wonderful. There was a lot of support among the anti-monarchists to ally with Japan even before the incursion in December 1941. So given this background and the paranoia it engendered among the highest ranks of the nobility it might be understandable why they would not want to let foreigners prosper too much in the country they regard as their own.

It's good to know where things originate but it doesn't change the facts of the present nor does it make the decisions even right.

And by the way, both Singapore and Hong Kong were invaded and occupied in the past. Notably by Britain and Japan. That hasn't prevented them from being open to foreigners. There's a big difference between being invaded/threatened using military force and having foreigners own businesses and property in a country.

Singpore and Hong Kong are not really comparable to Thailand as they both owe their prosperity to being small trading posts set up to facilitate UK business interests in the region and lack the large rural population of Thailand.

The history of Phibul and the ultra-nationalists does have a link to the current story as the minister involved here is decended from one of those key families that supported him - though she uses a different surname now her family name is Bulakul which, when adopted by her Chinese grandfather, was made up from 'bul' taken from Phibuls name and 'kul' meaning clan.

[beechbum]

i will continue to assume all phuket residence are scum

To label all residence of the island as such make it's easy to believe your probably not all there and that letting you anywhere near a business deal would be a very big mistake.

[xylophone]

IMO, and seeing that this lady is the driving force, this will be primarily aimed at businesses servicing the tourist industry, this especially as the previous "mini-crackdown" only turned up a handful of such businesses.

Having said that, I believe this is just one step away from them investigating the "companies" which have been set up with a specific intent of buying a house and land, by going after the lawyers and accountants who set them up in the first place, and by the way, who give advice and charge fees for carrying out this illegal practice.

[DrDave]

Excuse my ignorance but if a Thai holds 51% of a foreign company with limited voting rights. What is the major danger in this?

How will the authorities prove that a Thai is a nominee or actively involved in the company?

If a company is under investigation, then each of the Thai shareholders will be required to provide proof that they contributed 51% (in aggregate, at a minimum) of the company's registered capital. In many cases, the Thai nominee shareholders never had more than a few thousand baht to their name, let alone their share of the company's capital. This makes it very easy to determine whether a Thai shareholder is legitimate or a nominee.

[LivinginKata]

Excuse my ignorance but if a Thai holds 51% of a foreign company with limited voting rights. What is the major danger in this?

How will the authorities prove that a Thai is a nominee or actively involved in the company?

If a company is under investigation, then each of the Thai shareholders will be required to provide proof that they contributed 51% (in aggregate, at a minimum) of the company's registered capital. In many cases, the Thai nominee shareholders never had more than a few thousand baht to their name, let alone their share of the company's capital. This makes it very easy to determine whether a Thai shareholder is legitimate or a nominee.

What a joke ... going off topic here. 'Authorities' just need to have a look at the wealth of so many government officials and investigate where that wealth came from .... for sure not from their official monthly pay cheque.

[Tapster]

I agree with Xylophone.

The article says clearly:

“We want to prevent foreign investors/businessmen from working illegally in Thailand without paying taxes”

and if that sums up their aims, then they aren't targeting companies which have been opened solely for property purchase....at the moment.

Although Thailand does do some crazy stuff when it comes to laws and what they investigate, I don't think that the powers that be are known for cutting off valuable income streams.

I know it's only my opinion, but they would be stupid to target home owners, even if the associated companies are strictly illegal.

With money-spending tourist numbers dropping, it would not make sense to force home owners to sell at a considerable loss, and possibly to leave Thailand as a result.