Foreigners can no longer buy houses in Thailand via company.
Fair point, but TTM does have a point and he's been consistent on it.
May and August of last year saw me in HH. I viewed so many properties and saw so many agents. A few mentioned the Co. route, some didn't. Only one - one - explained the reality, shareholders, demonstrate its a real business etc. The risks if you don't.
That, with respect, is a p**s poor ratio!
But agents come and go, you do your reseach and you make your choice.
I still cannot believe that LOS wants to lose the revenue the expats provide, whoever to, or however its provided.
At the end of the day, we're all pawns in a much bigger game - now who said that?
May and August of last year saw me in HH. I viewed so many properties and saw so many agents. A few mentioned the Co. route, some didn't. Only one - one - explained the reality, shareholders, demonstrate its a real business etc. The risks if you don't.
That, with respect, is a p**s poor ratio!
But agents come and go, you do your reseach and you make your choice.
I still cannot believe that LOS wants to lose the revenue the expats provide, whoever to, or however its provided.
At the end of the day, we're all pawns in a much bigger game - now who said that?
Talk is cheap
It seems from reading various reports of emergency meetings to resolve the grey (well black and white is grey!) areas that this whole thing has thrown up that it only dawned on the grandees that the revenue would be affected after the event! A classic case of cutting off one's nose to spite one's face! Now they are surely flapping about trying to find new loopholes for foreigners to buy property, without actually allowing foreigners to own land, so they can take their cut again.caller wrote:I still cannot believe that LOS wants to lose the revenue the expats provide, whoever to, or however its provided.
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tuktukmike
- Guru
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Burger
Indeed i do have the facts and so would you if you had taken the time to attend the meeting.
Why on earth would these people be so afraid to post the facts on this site, are they really afraid of one posters comments.
So come on and share the facts with all of us so that they may put peoples minds at ease.
So meeting no2 was held with who and where, I take it that it follows that meeting no3 had the same result attended by someone who met someone else. Great all is now clear.
Mike.
Indeed i do have the facts and so would you if you had taken the time to attend the meeting.
Why on earth would these people be so afraid to post the facts on this site, are they really afraid of one posters comments.
So come on and share the facts with all of us so that they may put peoples minds at ease.
So meeting no2 was held with who and where, I take it that it follows that meeting no3 had the same result attended by someone who met someone else. Great all is now clear.
Mike.
tuktukmike wrote:
People respected that and did not pursue you on it. Now someone else does the same and you continually post asking for the details. Why do you not show the same courtousy people showed you back then.
Stop being hypocritical.
Burger
Mike attending the Majestic meeting on the 31st, would not give you all the facts as to whether or not people in the real estate business have had meetings with local governement officials. You made the wrong assumption about it, get over it and move on please.Indeed i do have the facts and so would you if you had taken the time to attend the meeting.
Mike, cast your mind back a while, you posted some info on here regarding a conversation you had with someone involved in setting up a computer system between land office and revenue department etc. You stated that you did not want to expand any further on it at the moment.Why on earth would these people be so afraid to post the facts on this site, are they really afraid of one posters comments
People respected that and did not pursue you on it. Now someone else does the same and you continually post asking for the details. Why do you not show the same courtousy people showed you back then.
Stop being hypocritical.
I have said numerous times (please read the posts properly and you wont be wasting peoples time) that there will be no outcome until the local departments receive clarification from central government on how to interpretate and implement the statement.So come on and share the facts with all of us so that they may put peoples minds at ease.
Burger
More concerning this subject from the Bangkok Post business section today (June 12). Pete
Samui cases spark land law crackdown
Recent government action to more strictly enforce laws related to property acquisition by foreigners stems from some blatant abuses reported on Koh Samui, according to Marcus Collins, a partner with the Bangkok law firm McEvily & Collins.
Officials have already begun probes into certain practices on the southern resort island, including a criminal investigation of money laundering, he said.
Buying property is one of the easiest ways to launder money, says Mr Collins. While checks exist requiring foreigners to declare the amount of money they bring in and its source, he is not sure about the extent of co-ordination among the Bank of Thailand the Justice Ministry and the police in investigating large transactions.
"Obviously they have the ability to do that and probably through Interpol they have the ability to check people who could bring a lot of money into Thailand, whether it's money obtained from criminals or criminal enterprises."
As for money that has been made in Thailand, Mr Collins said it is much harder to investigate because there is really no reporting requirement. "So if somebody has earned a lot of money or somehow been able to bring in a lot of money into Thailand then it's easy to buy property and whitewash the money that way."
Despite this, there have been occasional investigations into the "grey economy", which some studies say could be half of Thailand's GDP. This is money obtained from businesses on which no taxes are paid or businesses that are illegal, such as gambling and prostitution.
"Now, I'm not saying that is the main focus of the crackdown [on foreigners' property transactions]. I still think the main focus of the crackdown is basically a reinforcement of the legal provisions in the land code."
The Thai land code of 1954 states quite clearly that if you are a foreigner and use a Thai company to purchase land, you are violating the law if you hold more than 49% of the shares in that company. In practice, though, nominee structures using Thai individuals who have no financial interest in those companies is widespread, says Mr Collins, who has practised law in Thailand for 16 years.
"The flip side is, of course, that the officials themselves have known very well that this has been going on for a very long time. So I think you can't only blame the foreigners. You must also blame the officials for not enforcing the law as they should have.
"The reasons are many, and probably one is there is so much money at stake. So much money is being invested and there is also so money to be made in transfer taxes, specific taxes and money that the Land Office will generate for all those transactions that are going on."
The key issue as Mr Collins sees it is to what extent the officials are able to investigate these transactions, which can number in the thousands. "I'm not sure that they have the means or manpower to do that. I'm also not sure they really want to because obviously if they really do, it's going to affect the property market."
For the time being Mr Collins expects authorities to focus on new registrations and on making sure they follow the law. Some dubious cases such as those alleged on Samui will come under scrutiny but it would be difficult for the authorities to dig up all transactions across the board.
The Interior Ministry announcement issued on May 15 clearly states that the focus is on people who are using Thai companies to buy property for business purposes. "The circular clearly refers to people, foreigners, who do it for a business venture, to develop property as a business," Mr Collins explains.
While developers building fewer than nine villas have to apply for a building permit, they do not have to obtain a development permit. This means officials may not actually check the legality of the underlying transaction until the actual transfer takes place.
The Lands Department, in an announcement that predates the Interior Ministry's May 15 circular, requires all land offices in conjunction with the Commerce Ministry to check every six months the shareholding ratio and shareholders in companies that have obtained land ownership. The main focus is those with foreign directors and/or shareholders.
"So what they want to do is check that after they have transferred, they don't start changing the shareholding whereby the foreigners are given more shares than permitted by the land code," says Mr Collins. "They have the mechanism whereby they do an annual or semi-annual check to see whether the ratios that are required under the land code to legally be able to own land are still maintained."
This means foreigners can continue developing property on resort islands such as Samui and Phuket but they have to acquire true Thai investors and not nominees. The reason is that the Lands Department will investigate whether the Thai shareholders of these companies draw a salary and they will look at the financial accounts of the company.
Mr Collins says this changes the game because foreigners who want to develop property cannot always find suitable Thai partners. Also, Thai developers do not necessarily need to link up with foreigners because they can undertake such projects on their own.
"And what I always tell people _ I have practised law for nearly 25 years now _ is that a joint venture is like a marriage, more than 50% end in a divorce."
Mr Collins foresees that this move will lead to a significant slowdown in property development by foreigners who do not have Thai partners. However, projects that have already been launched will probably proceed because it is unlikely that the government will look at retroactive enforcement.
Individual foreign buyers, meanwhile, are on a safe footing if they acquire a leasehold for landed property, or a freehold condominium within the foreign quota of up to 49% of any development.
However, Mr Collins points out a common misconception that a 30-year leasehold can be extended twice, meaning 90 years in total. In fact, the civil and commercial code allows a foreigner only one extension of 30 years.
Samui cases spark land law crackdown
Recent government action to more strictly enforce laws related to property acquisition by foreigners stems from some blatant abuses reported on Koh Samui, according to Marcus Collins, a partner with the Bangkok law firm McEvily & Collins.
Officials have already begun probes into certain practices on the southern resort island, including a criminal investigation of money laundering, he said.
Buying property is one of the easiest ways to launder money, says Mr Collins. While checks exist requiring foreigners to declare the amount of money they bring in and its source, he is not sure about the extent of co-ordination among the Bank of Thailand the Justice Ministry and the police in investigating large transactions.
"Obviously they have the ability to do that and probably through Interpol they have the ability to check people who could bring a lot of money into Thailand, whether it's money obtained from criminals or criminal enterprises."
As for money that has been made in Thailand, Mr Collins said it is much harder to investigate because there is really no reporting requirement. "So if somebody has earned a lot of money or somehow been able to bring in a lot of money into Thailand then it's easy to buy property and whitewash the money that way."
Despite this, there have been occasional investigations into the "grey economy", which some studies say could be half of Thailand's GDP. This is money obtained from businesses on which no taxes are paid or businesses that are illegal, such as gambling and prostitution.
"Now, I'm not saying that is the main focus of the crackdown [on foreigners' property transactions]. I still think the main focus of the crackdown is basically a reinforcement of the legal provisions in the land code."
The Thai land code of 1954 states quite clearly that if you are a foreigner and use a Thai company to purchase land, you are violating the law if you hold more than 49% of the shares in that company. In practice, though, nominee structures using Thai individuals who have no financial interest in those companies is widespread, says Mr Collins, who has practised law in Thailand for 16 years.
"The flip side is, of course, that the officials themselves have known very well that this has been going on for a very long time. So I think you can't only blame the foreigners. You must also blame the officials for not enforcing the law as they should have.
"The reasons are many, and probably one is there is so much money at stake. So much money is being invested and there is also so money to be made in transfer taxes, specific taxes and money that the Land Office will generate for all those transactions that are going on."
The key issue as Mr Collins sees it is to what extent the officials are able to investigate these transactions, which can number in the thousands. "I'm not sure that they have the means or manpower to do that. I'm also not sure they really want to because obviously if they really do, it's going to affect the property market."
For the time being Mr Collins expects authorities to focus on new registrations and on making sure they follow the law. Some dubious cases such as those alleged on Samui will come under scrutiny but it would be difficult for the authorities to dig up all transactions across the board.
The Interior Ministry announcement issued on May 15 clearly states that the focus is on people who are using Thai companies to buy property for business purposes. "The circular clearly refers to people, foreigners, who do it for a business venture, to develop property as a business," Mr Collins explains.
While developers building fewer than nine villas have to apply for a building permit, they do not have to obtain a development permit. This means officials may not actually check the legality of the underlying transaction until the actual transfer takes place.
The Lands Department, in an announcement that predates the Interior Ministry's May 15 circular, requires all land offices in conjunction with the Commerce Ministry to check every six months the shareholding ratio and shareholders in companies that have obtained land ownership. The main focus is those with foreign directors and/or shareholders.
"So what they want to do is check that after they have transferred, they don't start changing the shareholding whereby the foreigners are given more shares than permitted by the land code," says Mr Collins. "They have the mechanism whereby they do an annual or semi-annual check to see whether the ratios that are required under the land code to legally be able to own land are still maintained."
This means foreigners can continue developing property on resort islands such as Samui and Phuket but they have to acquire true Thai investors and not nominees. The reason is that the Lands Department will investigate whether the Thai shareholders of these companies draw a salary and they will look at the financial accounts of the company.
Mr Collins says this changes the game because foreigners who want to develop property cannot always find suitable Thai partners. Also, Thai developers do not necessarily need to link up with foreigners because they can undertake such projects on their own.
"And what I always tell people _ I have practised law for nearly 25 years now _ is that a joint venture is like a marriage, more than 50% end in a divorce."
Mr Collins foresees that this move will lead to a significant slowdown in property development by foreigners who do not have Thai partners. However, projects that have already been launched will probably proceed because it is unlikely that the government will look at retroactive enforcement.
Individual foreign buyers, meanwhile, are on a safe footing if they acquire a leasehold for landed property, or a freehold condominium within the foreign quota of up to 49% of any development.
However, Mr Collins points out a common misconception that a 30-year leasehold can be extended twice, meaning 90 years in total. In fact, the civil and commercial code allows a foreigner only one extension of 30 years.
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Guess
- Deceased
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I think one of the facts that may have compounded the situation is that there is no Govt.caller wrote:These reports, whist helpful to see, are frustrating, in that its always lawyers or those involved in real estate that are quoted!
Why doesn't the Govt. come out and say what its intentions are?
Another snippit I heard yesterday that has a ring of truth about it is that the measure were put in place to put a certain Malaysian registered Australian compay of crooks on hold. This company has made fortunes in proerty development in Pattaya and Phuket and ghosting the procedes out of the country via their Malaysian front.
By making this claim I am probably adding to the frustation but realistically I can not see any reason why the Thais would want to stop farang owning property here. on a small scale. These people are sometimes couples sometimes with Children who do not wish to have a partnership with a Thai just so they can buy a house.
These people (and maybe their children) will be fuelling the Thai economy for decades.
There is not one country on earth can has succeded economically without allowing immigrants for specific tasks. Even the insular Japanese have a clearly defined policy. Anything that the Thai government does that would not conform with this simple concept would be retrograde and would start to send Thailand back in the direction of Myanmar.
[color=blue][size=134]Care in the community success story.[/size][/color]
On the other hand, there's only one thing worse than an immigrant - and that's a rich, educated immigrant!Guess wrote:There is not one country on earth can has succeded economically without allowing immigrants for specific tasks.
Rich, educated immigrants are an economic threat at grass roots level and therefore need to be controlled, hence the restrictions on employment for foreigners. As I've posted elsewhere on this forum, if things were relaxed on the employment front foreigners would simply take over!
I can understand the Thai viewpoint on controlling employment but they are just incapable of thinking through a sensible long term policy as far as residency, land ownership and citizenship are concerned.
There's been lots of references to money laundering as the reasons behind all of this, I was wondering how it worked, so useful info from Guess.
It would seem the Aussie Govt. could be involved then, as they are probably supplying the Thia authorities with this information? And most money laundering concerns drugs.
I have found it interesting that most reports talk about Bkk, Pattaya, Samui and Phuket.
It does make me wonder what the developments are like in these other areas if HH doesn't get a mention.
It would seem the Aussie Govt. could be involved then, as they are probably supplying the Thia authorities with this information? And most money laundering concerns drugs.
I have found it interesting that most reports talk about Bkk, Pattaya, Samui and Phuket.
It does make me wonder what the developments are like in these other areas if HH doesn't get a mention.
The best laid plans of mice and men
Well its not a great surprise but the error of their ways will suddenly dawn on the government officials when they see the collapse of their construction industry that is so dependent on inward investment. This will have a significant effect on the planned new golf course which had 2000 expat houses planned. This kind of investment will go to the wall. (some may say its a good thing)
I do feel sorry for the Thais and the influx of overseas money has priced many out of the market, but the upside of this revenue creates a boom in the economy and that feeds back to all Thais.
Once the government realise the problem, the man who made the change/clarification in the law will be found another job and the whole thing will be forgotten.
I do feel sorry for the Thais and the influx of overseas money has priced many out of the market, but the upside of this revenue creates a boom in the economy and that feeds back to all Thais.
Once the government realise the problem, the man who made the change/clarification in the law will be found another job and the whole thing will be forgotten.
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shakin' boxcar joe
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- Location: HUA HIN
The Thai government is caught between a rock and a hard place here.
They want to encourage investment , but they dont want to be seen by foriegn governments as being an easy touch for investors with dirty money to bring in.
I suspect that money laundering has something to do with this crackdown , and given the mood around the world regarding money laundering ( look at the hoops you have to jump through in the UK and Europe these days if you want to transfer more than 10000 pounds or Euro) I would imagine that foriegn governments have asked Thailand to be more watchful on incoming funds and how those funds are used.
If the foreign government is one that Thailand has recently signed a trade agreement with , or one that Thailand is negotiating trading priveledges with , then a crackdown on money laundering may just be part of the deal.
Hard to know where it will all lead.
They want to encourage investment , but they dont want to be seen by foriegn governments as being an easy touch for investors with dirty money to bring in.
I suspect that money laundering has something to do with this crackdown , and given the mood around the world regarding money laundering ( look at the hoops you have to jump through in the UK and Europe these days if you want to transfer more than 10000 pounds or Euro) I would imagine that foriegn governments have asked Thailand to be more watchful on incoming funds and how those funds are used.
If the foreign government is one that Thailand has recently signed a trade agreement with , or one that Thailand is negotiating trading priveledges with , then a crackdown on money laundering may just be part of the deal.
Hard to know where it will all lead.
shakin' boxcar joe.
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malcolminthemiddle
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