Clamp-down on foreign owned land

[OCgringo]

Yes our Japanese brothers lost tons of $$ in California ,

but they also lost tons of Yen at home ,

 

Banks would loan millions if you had a pulse

 

But they did not lose because the rules changed like in LOS.

 

We will see what happens , If the condo market dumps them we will see if it pulls down more of the economy /////

 

OC

[Flashermac]

Problem with Thailand is they can change the rules on you TOMORROW and there is nothing you can do about it.

[Lusty]

If you own a property via one of these "paper"companies can we assume it can be confiscated if something is found to be amiss?

[pe7e]

I doubt they will be any confiscations (bad press) but enforced sales could well be on the way. Expats living with their thai wives could always transfere ownership and lease it back on a long lease if they didn't feel they could trust their spouse. I think many developers will be caught with their pants down with this announcement, no one will be buying their retirement houses before this is sorted or a work around is found. It illustrates the dangers of 'buying' where land ownership is expressly forbidden for foreigners, they can't claim ignorance.

[SingaporeSteve]

This is nothing new - the laws have been in place for Donkeys years and the use of nominees has always been mentioned. If somebody has done it properly, I dont believe they have anything to worry about - however there are multiple angles on this that are causing the confusion.

 

Firstly there is this badly written instruction asking local land offices to investigate any shareholders in a company that has a farang director or shareholder - however whats not clear at least to the land offices is how they are supposed to measure such shareholders - basically like giving somebody the ingrediants of a cake and expecting them to produce it without showing them what you do to make the cake and then cook it - end result, total confusion in the kitchen and as many versions of a cake as there are people.

 

Secondly, this also impacts the use of people who suddenly are shown at least on paper to be able to come up with 20,000,000 baht of capital investment when they are employed as lets say somebodies maid or driver (can't think who springs to mind).

 

Thirdly, the revenue department, who are now incentivised to pull in money, see going after farangs as easy and fair game - as part of this they want the Interior ministry to tighten up the land element so that they can more actively pursue tax revenues - at it stands at the moment, most farang controlled Thai companies that also happen to own houses, dont actually do a lot of business. The arguement of the revenue office is quite simple, why would a genuine shareholder invest in a business that say for 5 years, has failed to make any money and pay any dividends? Again this is not new - it happended to me about 4 years ago when some tax inspector came snooping around without doing his homework - when my accountant showed him the tax returns for the company which I controlled, he had to agree that yes, everything has been done correctly and yes, he has declared the income in full and paid taxes on that income. To say the tax inspector was surprised was an underestimate - his whole manner changed and he went of completely satisfied. However the irony is that putting a property into a company is actually very tax efficient - you can depreciatte the entire cost of building the place, furniture and maintenance. Its actually not that smart of a business to go after purely because depreciation rules allow for so much to be written off and have the effect of minimising profit. As an example, the company I now head will produce income of 5,000,000 baht a year probably for the next 5 years - we are expecting to actually start paying corporation tax in year 7 based on current depreciation rules. There is nothing illegal in this - its merely structuring your business to minimise your liabilities legally versus the typical approach of hiding everything in a predominantly cash based society. I know for a fact that the builder who built our project is being investigated - we deducted with holding taxes on every payment we made to him - which was in excess of 30,000,000 baht - now the revenue office is after him to pay income tax on that lot. We actually told him this would happen but he just smiled and said "oh mai pen rai, I am a small man, not a big business."

 

Cheers

[Guest lazyphil]

happens in spain too, i saw on the news a while back a few english expats with there villas were booted out, villas 'dozed and land reclaimed ::

[kamui]

lazyphil said:

happens in spain too, i saw on the news a while back a few english expats with there villas were booted out, villas 'dozed and land reclaimed ::

 

There was just a very long report on German TV about the dispossessions of foreign landowners in Spain.

 

That's a different story and much more terrible:

If a someone want's to setup a new settlement (usually a very well connected local construction company) in an exclusive area near the sea where many foreigners built their houses, he can go to mayor and request that the landowner/s have to hand over most of it's ground to the village. The village which will give the land to the construction company for a very, very small fee.

To make it much more worse the dispossessed owners will receive a huge bill which can bemore than 100.000 Euro for the development (streets, e.g.) of the _confiscated_ ground, while the construction company will make millions of Euro (and the mayor will receive a huge kickback almost probably).

 

 

Of course this is against European law, but as always it will take years and thousands of Euro to sort this out, while more and more foreigeners will be dispossessed.

[chuckwoww]

Phuket Gazette News: Land crackdown targets Thai shareholders

 

BANGKOK: -- The Ministry of Interior has ordered a crackdown on property companies attempting to circumvent Section 74 of the Land Act in order to allow foreigners to control land ownership.

 

Section 74 states (unofficial translation): ?In the process of registering [land] possession rights and contracts between parties ? officers have the power to investigate both parties and call them for questioning or have them send relevant documentary evidence as is necessary. Officers will proceed as is appropriate to the case.

 

?In cases where there is reason to believe that the request to register possession rights will evade the law or where there is reason to believe that land is being bought for the benefit of foreigners a request for an order from the Minister will be made. The Minister?s order will be final.?

 

The crackdown will target Thai partners in Thai-foreign ventures, examining their inco me, their professional qualifications or experience, and their credit history.

 

In an order dated May 15 and issued to all provincial governors, the Deputy Permanent Director of the Ministry, Sura-art Thongniramol, notes, ?The Ministry of Interior has received reports that there are foreigners working with Thais or [engaging] Thais to register a company with the aim of buying and selling immovable property as a business venture.

 

?At the initial stage a house and land are purchased for residence or [for use as] an office and later [the aims are changed] to selling and subdividing for sale to foreigners ? which is illegal.?

 

Provincial officials are ordered, ?as protection against bypassing the law?, to examine limited companies, limited partnerships and general partnerships ?having the aim of carrying out business in immovable property.?

 

The order continues, ?If it appears that an alien holds shares or is a director, or if 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 been] in [their] current profession, and their income. The provision of necessary evidence is required.

 

?If a loan was taken [by the Thai] for the purchase [of shares] evidence of the loan is required.?

 

The order does not specify which officials will be responsible for investigating suspect companies, nor does it set out, except in the vaguest of terms, what will happen after the ?investigation?.

 

All it says is, ?If after due investigation it can conceivably be believed that the request for registration ? is to bypass the law or [it can be believed] that [those involved are buying] land for the benefit of an alien as defined in Section 74 ? the officers who undertook the investigation shall forward the findings to the Land Department to a wait the order of the Minister.?

 

No deadlines are set for how long an investigation will take, or how fast the Minister will be required to deliver a judgment.

 

Local reaction was hard to come by. The Phuket Provincial Land Office was not aware of the new order. However, one Thai involved in the property industry, who did not wish to be named, remarked that it seemed ?like a good thing, as long as the application is fair?. He added that he worried that it might be used by some ?for their [own] benefit?.

 

-- Phuket Gazette 2006-05-31

[David_66_UK]

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

 

I think the scary words here are "appears" and "reasonable to beleive". I read this as being that they need no proof that a Foreigner is involved, and it would be kinda hard to argue in a Court that you were not, as after all why would you try and argue something if you were not the owner!!!

 

Catch 22. Methinks - probably Thais at the moment working out how they can fuck over a foreigner or at least drop one in the sh#t. Of course if the boot was on the other foot I would of course not try and take advantage of this myself :D

[BuffHello]

rest assured local thais will snitch on anyfarang they think is owning land . snitching on neighbours is common about anything