New law, negative effect?

[caller]

Surprised that no-one has picked up on this yet (read it elsewhere)?

Basically, it seems that the financial status of Thais listed as shareholders is to be investigated to see if the deal was simply a front for an alien to buy land. Such matters are to be referred to the Ministry of the Interior for a "decision".

It appears an edict to officers at Land Registries at the re-sale stage rather than a full investigation into such companies.

Not sure what the purpose is, as the Thai authorities cannot be ignorant of the reality and as ever, when one loophole closes, another opens.........

Anyone have any more knowledge? I know I can't link to the source and I can't copy the legal document shown re: the above. But a potential buy/sell in Cha-am is mentioned as having been affected.

Not trying to scaremonger, but I guess it needs considering?
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I know nothing

[Wanderlust]

caller,
As far as I am aware this is not a new law or regulation; this power has always been there, which is why some do not go down the company route to buy land and house in Thailand. What i have heard before is that it is the 49% farang owned companies that are more often investigated in the way you describe, which is why many are now set up as 39% to stay under the radar so to speak. I imagine this has come from 'the site that shall not be mentioned' and often there is an over the top knee jerk reaction to stuff like this on there - I can't see the powers that be wanting to kill the goose that lays the golden egg as many of them have benefited from higher prices and other benefits. However it does serve as a timely reminder of what can happen.

[Jockey]

If the land office had to investigate the financial status of the 6 Thai shareholders for every company at every resale, I can not see the sale getting done within one day. How many company 'owners' actually know who the shareholders are? Presumably the 'shareholders' would have to produce bank statements and a private letter signed by the bank with their ID's photo copied on the letter? If that stipulation came in to play, not many Ferangs could resell their house, and as wanderlust says, the powerful people in authority could lose the golden egg from the goose.

But lets say I set up a legit trading company. What is to stop me GIFTING the Thai shareholders with shares? That surely can not be against the law?

The danger is, a lesser authority from the land office could see this as another way to make money. They could insist to see these financial documents from the 'shareholders' or accept a 'fine'. I could see that happening.

I think I will talk to my lawyer about this. I think its time I knew who my shareholders are!!!!

At the end of the day, flouting the law is always going to put the flouter in a position of weakness and make the authorities stronger.

[Burger]

Someone told me that a lot of 'company' house sales are carried out by the new 'buyer' acquiring the shares of the seller, ie: new buyer takes over company.
This way no assets have been realised, no tax is due yet, no visit to land office

Burger

[tuktukmike]

I hate to say this but, I told you so.

Before anyone has a rant it is as bad news for me as anyone else.

We all want to be able to own our own land and home, but this has been on the cards for a long time.

I did explain to people how myself and a good friend met a guy who was responsable for setting up the new computer database in this province for the Tessa Bahn, Land Office, and the revenue dept.

For us it makes our future out here even more uncertain as we had hoped that one day the Thai Goverment would allow Farangs to own land.

As a friend of mine said, why not limit all farangs to 1 rai each.

Does anyone have any feedback from the meeting with the Govenor on monday.

Looking back at my previous posts it seems sad that i was descrived as a scaremonger, I only posted what i was told by reliable sources.

Mike.

[tuktukmike]

New property law stuns foreigners

Bangkok (dpa) - Thailand's booming property sector has been thrown into confusion by a new regulation issued this month that requires all partly foreign-owned companies to prove the source of their funding before purchasing land, industry sources said Tuesday.

The new Interior Ministry regulation that went into effect on May 25 has already started to slow sales of housing estates in Thailand's popular seaside resorts, such as Pattaya, Phuket, Hua Hin and Samui Island, which have been specifically targeting well-to-do foreigners as vacation getaways or retirement homes.

"The property boom ended on May 25," said Ronachai Krisadaolarn, managing director of Bangkok International Associates, a Bangkok-based legal consultancy firm that caters to foreign clients.

Thailand has strict laws prohibiting foreigners from directly purchasing property themselves although loopholes in the law allow them to own land and their houses through long leases or a "nominee company," providing the company is majority Thai-owned.

It is common practice for such "shell companies" to include Thai nationals who have been paid to act as nominees to facilitate the deal and who have invested nothing in the purchase.

The new regulation, signed by Suraart Thoingniramol, deputy permanent secretary of the Interior Ministry, is designed to halt the use of such companies for property purchases in the future.

"If it appears that an alien holds shares or is a director or it is reasonable to believe that a Thai holds shares as a representative of an alien, the officers shall investigate the income of Thais holding shares, delving into the number of years [they have spent] in the current profession and monthly salary," reads a translation of the law. "The provision of necessary evidence is required."

The new regulation is actually an enforcement of Thailand's existing laws, legal experts said.

"It's not a radical change. It's a radical implementation," Ronachai said.

The regulation has already started to stall home sales to foreigners, sources said.

"There's a lot of confusion," said Simon Landy, managing director of the Primo Co, a property-development firm. "Some land offices don't know what to do with it, and many have simply stopped transferring land."

I think we could all be in for a bumpy ride.

Mike.

[timego]

Stunned is the word. or maybe Disgusted is a better word to desribe how the foreigners feel.

For everything a reason.
What i don't understand is WHY. and WHY NOW?
Always comes down to money in Thailand so Who makes the money from this. Is it a very small group of chinese-thai politians and their cronies at the expense of the rest of the population again?

I was joking recently with a thai lawyer over a drink about the cycle of letting foreigners put a great mountain range of money into the country again and then taking it away from them and then doing it again. It was funny at the time because i did not think it would happen again or happen so quickly. At the end of the day it relects very badly on The Thai Nation.

[hogus]

Well, seems the confusion is going on...

The only thing I never ever will understand, why Farangs are sooooooooo eagerly to buy land & houses in a country which seems to be uninterested in sale anything under acceptable and legal conditions?
Is it the exchange-rate, the hope to be one time in life owner of a cheap house in a tropical country they never could afford in their own countries, or just the wish to please their gfs, wives, lovers etc.???

Now one more law-hole seems to be closed.
That's really bad for people, which had the idea to buy houses by using the company-way, or bought it already.
On the other side I just wonder, why there isn't any law yet, which forbid and control real-estate-companies to give foreigners the illusion that they can buy land & houses easily?

It will be interesting to see, what's going on now!
I just hope it won't be too worst for all the credulous buyers, which believed in the questionable promises of some real-estate salesclerks.

May be we can hear something new at the authority meeting tomorrow?
But I suppose, they just will remind, that it was all the time prohibited for Farangs to buy land & houses legally.

[tuktukmike]

Hogus

Clearly a good post.

Those of us who always knew what the law stated tried to warn others about the risk.

I wonder how the real estate people here will now react as there seems to be a sudden lack of comment from that quater.

The members on this site that rubished every comment i made about this subject seem to have gone very quiet at present, what i wonder is what mr burgers lawyer telling him now.

Most of my info came from the British Embassy and all i asked everyone who was thinking of buying land to do was contact their own Embassy for advice, and i was slated for this.

Well maybe the gravy train is over for the developers and agents who were making vast sums of money from gullible farangs.

I end with this comment, how do you live with yourself having in many cases taken peoples life savings on the promise of paradise,

Sort of reminds me of Tenerife in the 80s with the timeshare scams.

But of course i would assume that anyone who bought on a false promise will of course be reimbersed by the said companies.

Now as the educated said lets see just how much your country will protest about Thailand enforcing the laws that have always been in place.

Mike

[hogus]

[caller]

Its clearly far too early to know how this will pan out, but I would imagine the immediate effect on those looking to buy is to make them sit and wait.

Only a fool would go ahead with a purchase with the uncertainty and insecurity caused by this news. Simply to evaluate any effect on prices - the bottom line. Even if, like me, the company route wasn't the favoured option in any case.

However, if this new change is the way forward then it will impact on me in any case, in that the seller would have to prove the Thai shareholders are legitimate business partners?

Could be a new way for Thais to take control of the business by buying up the nominee shares and paying off the majority farang owner - being the only way he/she can get any return on their investment?

Whats the point of sitting on land you can't do anything with?

Who knows?
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I know nothing

[ajarnfrank]

[buksida]

I can't say I'm at all surprised by this, what did anyone expect from a xenophobic government?

Don't want to sound pessimistic but I believe this is the tip of the iceberg, life is going to become a lot tougher for foreigners who wish to reside and or work here if TRT get re-elected in October.

I hear Malaysia is nice this time of year
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Named must your fear be before banish it you can.

[tuktukmike]

Buksida wrote

Don't want to sound pessimistic but I believe this is the tip of the iceberg,
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You maybe dont know how right you are, I posted a thread some time ago about the labour dept who had visited a well known lawyers office while we were there.

They were pulling all the files on registered companies and wanted photocopies of the directors, this falls in line with the implementation of the new linked computer system.

Some time ago we as many know had a problem and many out there said, its your own fault as you must have done something wrong.

Well we both had our work permits, we both pay our company and personal tax and I have my Thai Customs Card and Department of Foreign Trade card. You can not get these cards without a work permit and a registered company all paid up.

And the funny thing is that my wife recieved a letter from the revenue department last week which we had to take to our lawyer as we dont read thai.

Guess what, They are giving her an 8000bht rebate as she has paid too much tax. anyone still think we did something wrong?.

On a more serious note, I do think that our companies will also be under threat even if we are genuine trading companies. For me, i dont earn my money in Thailand but am a genuine exporter and return funds back into Thailand.

I think we all have to wait and see what pans out in the coming months, but it does look quite serious for many of us.

Do they make tuk tuks in Malasia??????

Mike.

[shakin' boxcar joe]