New law, negative effect?

tuktukmike · Guru Joined: 18 Apr 2005 Posts: 525

Sounds great,

One exception which was explained at the meeting.

The moment you change the directors of these companies they will investigate.

What no one needs right now is as predicted are more ways to circumvent the laws on land ownership out here.

I have contacted the British Embassy today and they are looking into putting the regulations on their web site.

The sooner the better, then maybe for once and for all everyone can stop blaming the Lawyers/real estate companys and start looking at themselves.

How many times does it had to be said, we all knew this was a risk but for some with large returns if you were lucky.

Mike.

Now back to the footie.

Burger · Ace Joined: 19 Apr 2004 Posts: 1114 Location: Hua Hin

This is interesting, from a large Bangkok solicitor firm who have actually contacted the Ministry of Interior:

"We read with interest the article in the Bangkok Post dated 31 May 2006 entitled, “New Regulation Causes Confusion.” Since the article has caused some concern in the expatriate and business community, we researched the basis of the statements made in the article.

The Ministry of Interior informed us that there was no regulation dated 25 May 2006 as was referred to in the article, and that the closest document that they have to such a regulation as described in the article was a circular letter dated 15 May 2006.

According to that circular letter, a company involved in the real estate business with a significant foreign shareholding, and where the use of Thai nominees (front men) is suspected, may come under investigation when the company has the objective of engaging in the real property business.

Trading real property is a business prohibited to non-Thai companies and persons and is listed on List 1 of the Foreign Business Act, which is the most strictly prohibited category of businesses. There are 2 other lists of prohibited businesses where restrictions and punishments are less severe.

Although the use of Thai nominees to evade the Foreign Business Act or Land Act is illegal, general enforcement is not, apparently, the objective of the circular letter. The circular letter is aimed particularly at the companies engaged in the real estate business and not limited companies that purchase real property for objectives other than the real property business. There are many business activities other than the real estate business. For example, limited companies may purchase real estate for resort operations, company headquarters, fitness centers, research facilities, factories and a host of other activities.

The companies that would likely be affected by the circular letter would be real estate development and real estate sales companies using Thai nominees that are in actuality managed by or for the benefit of non-Thai nationals. Such an activity would also be in violation of the Foreign Business Act by engaging in a business listed on List 1 of business activities prohibited to non-Thai nationals.

An English translation of the circular letter can be found on our website at http://www.sgalegal.com/landletter15May06.html. This is our opinion, and persons taking any legal action, are advised, as usual, to consult with their own attorney.

Siam Global Associates, Co. Ltd."

tuktukmike · Guru Joined: 18 Apr 2005 Posts: 525

limited companies may purchase real estate for resort operations, company headquarters, fitness centers, research facilities, factories and a host of other activities.

And the point????

Siam Global Assosiates, This wouldent be another Thai Lawyers company by chance???.

Lets just wait and see, hopefully all will pan out ok in the end. Maybe.

Mike.

Burger · Ace Joined: 19 Apr 2004 Posts: 1114 Location: Hua Hin

Jaime · Ace Joined: 14 Jan 2004 Posts: 1898 Location: Sh*t Creek

Burger · Ace Joined: 19 Apr 2004 Posts: 1114 Location: Hua Hin

Highlighted quotes for you:

According to that circular letter, a company involved in the real estate business with a significant foreign shareholding, and where the use of Thai nominees (front men) is suspected, may come under investigation when the company has the objective of engaging in the real property business.

Although the use of Thai nominees to evade the Foreign Business Act or Land Act is illegal, general enforcement is not, apparently, the objective of the circular letter.

The circular letter is aimed particularly at the companies engaged in the real estate business and not limited companies that purchase real property for objectives other than the real property business.

There are many business activities other than the real estate business.
For example, limited companies may purchase real estate for resort operations, company headquarters, fitness centers, research facilities, factories and a host of other activities.

The companies that would likely be affected by the circular letter would be real estate development and real estate sales companies using Thai nominees that are in actuality managed by or for the benefit of non-Thai nationals. Such an activity would also be in violation of the Foreign Business Act by engaging in a business listed on List 1 of business activities prohibited to non-Thai nationals.

Burger

Burger · Ace Joined: 19 Apr 2004 Posts: 1114 Location: Hua Hin

Jaime · Ace Joined: 14 Jan 2004 Posts: 1898 Location: Sh*t Creek

I understand and accept that the intention of the circular is clear - i.e. that individual property owners are not the intended targets but it also seems to confirm that buying a property through the company route is illegal. Isn't the whole point of forming a Ltd Co. for purpose of buying land to evade the Land Act? Which is illegal, right? Am I right or wrong?

I'm not involved in buying, selling or getting one over on people BTW, I just want to know.
_________________
"The man who never made a mistake never did bugger all" - Old Welsh proverb

"Why limit yourself to the death of a crummy celery stalk when you can eat a giraffe?" - PWEETA

Jaime · Ace Joined: 14 Jan 2004 Posts: 1898 Location: Sh*t Creek

Burger, I think you beat me to my last post!
_________________
"The man who never made a mistake never did bugger all" - Old Welsh proverb

"Why limit yourself to the death of a crummy celery stalk when you can eat a giraffe?" - PWEETA

malcolminthemiddle · Posted: Fri Jun 02, 2006 7:22 pm Post subject:

Burger · Ace Joined: 19 Apr 2004 Posts: 1114 Location: Hua Hin

Malcolm,

I think Hogus misunderstood.

One project, lets call it 'Kings Cross', 12 houses/plots.

Developer sets up 12 Thai companies, 'Kings Cross 1', 'Kings Cross 2', 'Kings Cross 3' etc etc

Buyers comes along and purchases house/plot 1 and transfers shares in company 'Kings Cross 1' into his name/control at completion stage.

Burger

malcolminthemiddle · Posted: Fri Jun 02, 2006 9:20 pm Post subject:

Burger,

Wow,

Never heard of that one before.

Such a scenario would :

1. Have a substantial impact on the Developers cash flow (establishment and maintenance of numerous companies).
2. Offer no benefit to a Thai buyer who would not need a company to buy and in any case why establish pre-emptive companies before knowing who your customers are?
3. Further aggravate those laws now under discussion especially should the developer choose to use the same "nominated Thai share holders" (now being investigated), throughout the multiple companies you describe.

And what about all the common areas and access, who do these belong to?

I don't think so some how?

hogus · Posted: Sat Jun 03, 2006 1:12 am Post subject:

If I read the last statements, I'm totally agreed with TTM's opinion, that no one needs more ways to circumvent laws on land ownership.
All these loophole-constructions make it more and more clear for me, what was told to us at the meeting with the Land Official already.
There aren't any riskless or even legal ways for foreigners to own land & houses for private purposes in Thailand yet.
Every tricky loophole includes one or more traps, which could make it possible to lose all investments.
End of story!

Let's lean back and enjoy the coming world championship!!!
I suppose, all of us will find out the results of the announced offical investigations earlier than some of us would like to know!

Burger · Ace Joined: 19 Apr 2004 Posts: 1114 Location: Hua Hin

Malcominthemiddle wrote:

Burger · Ace Joined: 19 Apr 2004 Posts: 1114 Location: Hua Hin

Hogus,

Lets be fair, I posted something earlier about a common practice regarding this situation.
You replied that you did not understand it and asked for clarification. You were given clarification.
Now you reply that it is suddenely "more ways to circumvent laws on land ownership" .... No I told you it was already common practice!!

If you don't understand something then fair enough, ask away, but don't come back a couple of hours later making bold statements about the legality of something you were not even aware earlier in the evening.
It's not on and its irresponsible.

Burger