rickfarang Posted May 31, 2006 Report Share Posted May 31, 2006 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." Link to comment Share on other sites More sharing options...
Neo Posted May 31, 2006 Report Share Posted May 31, 2006 Thailand's booming property sector has been thrown into confusion Confusion? They closed the loophole that most people know is a sham anyway. Prospective buyers should appreciate this because they can no longer be guided into an illegal activity. The new regulation is actually an enforcement of Thailand's existing laws, legal experts said. Exactly. Now what will be the fate of foreigners who currently "own" land through a shell company. I've got to think a lot of panicky sales are imminent. Link to comment Share on other sites More sharing options...
chuckwoww Posted May 31, 2006 Report Share Posted May 31, 2006 They may have to clarify the announcement to calm people's nerves but basically any farang who thinks they own property 100% in Thailand is seriously deluded IMO. Link to comment Share on other sites More sharing options...
BuffHello Posted May 31, 2006 Report Share Posted May 31, 2006 here we see an example of how things can suddenly change for prosective retirees. no warnings no consultation it just happens, then you are fugged... a Glut of expensive properties in phuket i think ,and thais wont be buying them anytime soon.. Link to comment Share on other sites More sharing options...
.. Posted May 31, 2006 Report Share Posted May 31, 2006 LOL, which means those of us who trust our wives may be able to pick up some nice property at fire sale prices! I know I'll be looking and making lowball offers... Cheers, SD Link to comment Share on other sites More sharing options...
chuckwoww Posted May 31, 2006 Report Share Posted May 31, 2006 Well anybody who's lived in Thailand a while knows who owns it. Link to comment Share on other sites More sharing options...
OCgringo Posted May 31, 2006 Report Share Posted May 31, 2006 I wonder if this works for Sony , Nissan, Toyota etc or is it just houses / condos ? OC Link to comment Share on other sites More sharing options...
chuckwoww Posted May 31, 2006 Report Share Posted May 31, 2006 Sony , Nissan, Toyota you're talking real clout there. They're too big and too smart to get conned by real estate agents. The Yippuns learned their lesson in California. Link to comment Share on other sites More sharing options...
MadStockBroker Posted May 31, 2006 Report Share Posted May 31, 2006 If you read it carefully it does not say that foreigners can not own land. It says that the thai partners in thai/farang companies that purchase land will be investigated to see if they have sufficient income to make such a purchase. So all you need to do is make sure u are careful in chosing your thai partner. Sony, Nissan, Toyota etc all own land in industrial estates which are covered by BOI privilage. Link to comment Share on other sites More sharing options...
chuckwoww Posted May 31, 2006 Report Share Posted May 31, 2006 You're right. Under the 49% rule if the company is legit then nobody has to worry. I guess we'll find out how many companies in Pattaya, Phuket and Samui are legit. Link to comment Share on other sites More sharing options...
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