Vip Program - Is it legal??

[amortm]

Doubts raised against investment scheme for long-stay tourists

THE Tourism Authority of Thailand (TAT) launched in 2002 its “Long-stay” campaign to develop and promote long-term stay in Thailand. The project hoped to attract retirees from countries that have harsh winters and a higher cost of living to have extended stays in Thailand, as well as visitors traveling for medical and health services, international athletes who wish to make Thailand their training base as well as international students.

The “Long-stay” campaign aims to offer assistance and certain privileges like communication services, facilitating longer staying arrangement and a one-year visa. It does not create a new visa category, it aims to make it easier for these groups to apply for such a visa.

A Samui real estate agent is currently marketing a property scheme called Vacation Investment Program (VIP) suggesting a new government backed option for -foreigners to purchase property on Samui.

The scheme says it includes the benefits of the TAT Longstay campaign and allows foreign investors to enjoy “perpetual” leasehold on property on Koh Samui via a recently established (August 2006) private company.

In response to questions about TAT’s involvement in the Vacation Investment Program, the TAT stated that foreign real estate investment is not part of a government policy to promote long-term stay in Thailand or the TAT’s longstay campaign objectives, nor does the TAT provide services for foreigners to invest in real estate on the island.

It is the private service provider Thailand Longstay Co., Ltd. (TLM) that has been entrusted by the TAT to promote Thailand’s Longstay campaign Its subsidiary, the Longstay

Property Management Co., Ltd., is the one associated with the commercial VIP scheme and not the Thai government. The TLM combines a government campaign with a commercial property scheme.

TLM is a privately owned company with 55 percent of its shares held by a Thai national Mr. Ruamnakorn Tubtim-thongchai, who is the company’s chief executive officer.

The VIP is not created by, or set up in association with the Thai government, but by Thai businessmen and real estate sellers. The scheme seems simple, the foreign investor buys from the Samui Estate agent and the 100 percent privately Thai owned VIP company registers ownership over the property ‘as the agent of the foreigner’. The VIP in return

provides the foreigner with a 30-year lease and a promise it can be renewed in ‘perpetuity’.

Beware, this is not an absolute right and like any other renewable lease constructions offered by any developer on the island, this is not guaranteed by law or the Royal Thai Government and the ‘perpetuity’ of the lease is merely based on a contractual renewal obligation. In addition the scheme includes in a substantial fee to offset the VIP service.

The VIP scheme says ‘the Thai government department will register the buyer as a perpetual owner’. This in practice means the local Land Office will register the foreigner’s name as the ‘lease owner’ on the land title deed. This is not a new development or new law, as any lease in

Thailand exceeding 3 years must be registered at the local Land office to be enforceable and automatically includes the registration of the lease and name of the lessee to the title deed.

Under the VIP the foreigner gets a 30-year lease, the maximum period allowed by Thai law, the ‘enduring forever, everlasting’ renewal of the lease comes under Contract Law and is not more than a promise you can easily lose under present lease law.

Perpetual leasehold is under Thai law legally meaningless. This doubtful and misleading scheme has several legal drawbacks and in practice it will encounter legal problems as the Land Code prohibits foreigners from purchasing land and prohibits Thai entities to acquire land as an agent of an ‘alien’.

Without proper approval from the Ministry of Interior and the Land Department (which it has not) it must be deemed that the VIP company will acquire the land under section 96 of the Land Code, as the owner in place of an alien, which contravenes section 113 of the

Code. Section 96 Land Code; ‘When it appears that any person has acquired land as the owner in place of an alien or juristic person under the provisions of Section 97 and 98, the Director-General shall have the authority to dispose of such land and the provisions of Section 94 shall apply mutatis mutandis’. Section 113 Land Code; ‘Any person who acquires land as an agent of an alien or juristic person under the provisions of Section 97 or 98 shall be punished with a fine not exceeding twenty thousand baht or an imprisonment not exceeding two years, or both’.

The privileges and facilities offered under the Thailand Longstay tourism campaign are open for all foreign members and are separate from any commercial property scheme (TAT). With regard to recent political developments it is very doubtful if the new government will adapt the Thailand Longstay campaign. Like other “pet projects” set up by the previous Taksin administration it needs to be re-studied.

- NADIA HENDERSON

source: http://www.samuiexpress.net/node/172

[quiksilva]

No great surprise this, be very wary of any structure set up to exploit so called loop holes.

In Thailand the measure the courts will apply when testing the legality of such schemes is whether the structure goes against the 'spirit of the law'.

If the scheme is setup to allow a foreigner to own residential land, dont expect it to last too long.

[astral]

Based on current knowledge this scheme does appear to be dodgy at the very least.

Offering leases in perpetuity is outside the scope of Thai law,

and anyone who accepts a "promise" of what can be done in 30 years time is a fool.

[quiksilva]

Indeed, just to add to that even if a company is set up to renew these leases what guarantees are there that this newly established firm will still be here in 30 years time?

[chownah]

I'm wondering if this kind of deal would be legal if they provided a usurfruct without the lease.

Chownah

Edited November 7, 2006 by chownah

[astral]

Moved for more general viewing.

[gazza1]

Moved for more general viewing.

MOVED FROM ANOTHER FORUM:

Im currently based in Bangkok but am considering attending the following which is being held by Samui Estate Corporation who are the agents offering the VIP scheme:

Dear Sir

Further to our last email, seats are being reserved fast. So if you wish to attend this event please send your name and company to [email protected] .

The Launch Event is being held at The Samui Palm Beach Resort in the Wanlee ball room on the Friday 17th November, the event starts at 1pm

The Key people who will be speaking at the Launch are

Dr.Suvit Yodmanee - The Minster of Tourism and Sport

Mr Ruamnakorn Tabtimtongchai – President of TLM

Mr Niwat Sawadkeaw .- Chief of Surrathani Province

Mr Chaiykarn Sudampanthorn – CEO of Samui Estate Corporation

The representative of the Chief of Immigration

Officials from the Land Office

The Seminar will be in THAI only, but with English literature being made available to those who do not understand Thai, also English representatives will be on hand to answer any questions.

The structure of the seminar is

กำหนดการ

การสัมมนาและเปิดตัวโครงการ VACATION INVESTMENT PROGRAM (VIP)

โดยบริษัท ไทยจัดการลองสเตย์ จำกัด

ร่วมกับหน่วยงานราชการและภาคเอกชนด้านอสังหาริมทรัพย์

ณ สมุย ปาล์ม บีช รีสอร์ท ห้องวันลี บอลรูม เกาะสมุย สุราษฎร์ธานี

วันศุกร์ที่ 17 พฤศจิกายน 2549 เวลา 13.30 น.

......................................................................

13.30 น. ลงทะเบียนผู้เข้าร่วมงานและสื่อมวลชน

14.00 น. พิธีกรกล่าวต้อนรับแขกผู้มีเกียรติ และนำเข้าชมวีดิทัศน์

แนะนำโครงการ VACATION INVESTMENT PROGRAM (VIP)

14.10 น. พันตำรวจเอก รวมนคร ทับทิมธงไชย

ประธานเจ้าหน้าที่บริหาร บริษัท ไทยจัดการลองสเตย์ จำกัด กล่าวรายงานวัตถุประสงค์

14.20 น. ผู้แทนสำนักงานตรวจคนเข้าเมือง กล่าวรายงาน ความพร้อมในการอำนวยความสะดวกการจัดทำวีซ่า 1 ปี ให้กับนักท่องเที่ยวชาวต่างประเทศ

14.30 น. เจ้าพนักงานที่ดิน กล่าวรายงาน การเตรียมความพร้อมและอำนวยความสะดวกให้กับนักท่องเที่ยวชาวต่างประเทศในการจดทะเบียนโอนกรรมสิทธิ์และการทำสัญญาเช่าที่พักระยะยาว

14.40 น. ผู้ว่าราชการจังหวัดสุราษฎร์ธานี กล่าวรายงาน

14.50 น. ร.ท.ดร.สุวิทย์ ยอดมณี รัฐมนตรีว่าการกระทรวงการท่องเที่ยวและกีฬา

กล่าวนโยบายส่งเสริมการท่องเที่ยวแบบ LONG STAY และกล่าวเปิดโครงการ

15.10 น. ร.ท.ดร.สุวิทย์ ยอดมณี รัฐมนตรีว่าการกระทรวงการท่องเที่ยวและกีฬา

มอบโลห์ประกาศเกียรติคุณให้กับผู้แทนสำนักงานตรวนคนเข้าเมือง, ผู้แทนกรมที่ดิน,

ผู้ว่าราชการจังหวัดสุราษฎร์ธานี

15.15 น. แขกผู้มีเกียรติถ่ายรูปร่วมกันบนเวที

15.30 น. รับประทานอาหารว่าง

16.00 น. สัมมนาแลกเปลี่ยนข้อมูล ข้อคิดเห็น ระหว่างหน่วยงานราชการ

และภาคเอกชนด้านอสังหาริมทรัพย์

Best Regards

The VIP Team