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Archive for the ‘Thailand Business’ Category
24th FEB 2010
Thailand to Raise Corporate Land Conveyancing Fees in March 2010
Posted by : admin
A common method of land ownership in Thailand is through use of a Thai Limited Company. In many cases, a juristic person is incorporated to hold Thai property on behalf of the principal investors in the company. Over the past three years the Thailand Real Estate market has been somewhat stagnant, but recently there seems to have been something of an upward trend in Real Estate transactions. This has resulted in the Ministry of the Interior raising the fees for land transactions, particularly with respect to land transactions executed on behalf of a corporation. To quote a Pattaya Times article promulgated on the website Thaivisa.com:
“‘A nationwide increase in land offices fees will go in effect on March 2,’ a spokeswoman for the Ministry of Interior announced in Bangkok. The fees for purchases and sales involving a Thai company limited which most foreigners use to buy land will go up from one percent to six and a half percent of appraised or contract value, whichever is higher. The head of the Chonburi Land Office, Director Vaiyavuth Surapruik, said, ‘In 2008 the fees were lowered to help the economy. This has stimulated the sale of properties. Since the fees were lowered almost two years ago there has been no slow-down in the number of transactions at the land office in Banglamung which services Pattaya so now fees will go back up in order to increase government revenues.’”
On the one hand, the recovery of the Thailand Property market is definitely a positive development, and hopefully a sign of an underlying upsurge in the overall Thai economy. This upswing in Thai property sales may also be indicative of an overall upward trend in the world wide economy. However, for those who are thinking of purchasing Thai property be it land or another form of Thai Real Estate such as a Thai Condo, this development will likely be viewed negatively as it will result in increased fees for the buyer or seller of Thai property.
This fee increase will also have an impact on individuals as the aforementioned article concluded:
“Property transfered between individuals will be charged three percent fees if owned for more than two years by the current owner. If owned less than two years the fee is higher, between five and six and a half percent.” [sic]
Property transfers between individual foreigners is probably as common, if not less common, than property transfer between corporations controlled by foreigners. That being said, under certain conditions a foreigner can own a Thai Condominium in freehold and therefore could be effected by these increased individual transfer fees.
For related information on this blog please see: Thailand Property Law.
16th FEB 2010
Thai Visas for Citizens of the United States of America
Posted by : admin
Thailand is considered one of the most beautiful tourist destinations in the world. In recent years, Thailand has boasted some of the highest tourist numbers in Asia, but as the world economic downturn continues, fewer Americans are traveling to Thailand as tourists. However, that state of affairs is poised to change as Thailand is being heralded as a great destination for budget-conscious travelers. In many ways, the buying power of the US dollar has only been slightly diminished in the Kingdom of Thailand and the dollar still represents disproportionate buying power for Americans in Thailand.
In order to remain in Thailand, an American must either obtain a Thai visa exemption stamp or a Thai visa. One of the many questions that many Americans pose regarding Thai visas is: how do I get a long term Thai visa? Many are under the mistaken impression that obtainment of a long stay Thai visa can be more easily accomplished from Southeast Asia. This is often not the case. For many, obtaining a 1 year Thai visa can be more easily facilitated if the applicant is in the United States at the time of application. That being said, proper document preparation is essential and many American applicants opt to retain the services of Thai immigration specialists in order to streamline the process.
The proper visa category is also an issue for many Americans. The plethora of Thai visa categories can be mind boggling, but fortunately there are a few major categories that cover the activities of most applicants. The first major category is the Thai business visa. Thai business visas are perfect for those conducting business in Thailand. These travel documents are also a benefit to those who are seeking employment in the Kingdom of Thailand. In many ways, a Thai business visa is extremely helpful when it comes to applying for a Thai work permit.
A Thai O visa is a sort of “catch all” category that is most commonly used by Americans with family members in Thailand. However, under the moniker of the “O” category there is the sub-category for retirees. A Thai retirement visa can be extremely beneficial for those who simply wish to remain in the Kingdom of Thailand in order to enjoy their so-called “golden years.”
An increasingly popular visa category is that of the Thai ED visa. This visa is often utilized by those in Thailand who wish to remain in the Kingdom in order to pursue a course of study. In many ways, ED visas are very beneficial to those from other countries. That being said, these types of visas often do not confer work authorization and therefore many opt not to obtain an ED visa as it is usually difficult to obtain a Thai work permit.
For more on this issue please see: Thailand visa.
14th FEB 2010
Amity Treaty Companies and Thai Condo Ownership
Posted by : admin
The Treaty of Amity between the United States of America and the Kingdom of Thailand (US-Thai Treaty of Amity) allows American Citizens to own virtually one hundred percent of a Thai company. This can prove highly beneficial to American expatriates in Thailand who wish to conduct business. That being said, there are restrictions to the types of activity that an Amity Treaty Company can undertake. Most notable amongst the restricted activities are: land ownership, internal communications, internal transportation, fiduciary functions, and the liberal professions.
Under Thai law, there is a de facto prohibition placed upon foreigners when it comes to land ownership. This means that foreign nationals are not permitted to take freehold title to Thai property without first obtaining permission from the Thai Minister of the Interior. This prohibition is not all-encompassing as foreign nationals are permitted to take freehold title to Thai condominiums. However, the condominium complex must comport to the relevant provisions of the Thai Condominium Act. Most notable among the requirements in the Thai Condominium Act is the provision that a Thai condo complex must be primarily owned by Thai nationals, meaning that 51% of the Condo units must be owned by Thais while 49% percent of the units may be owned by foreigners.
In many cases, a condominium complex is owned by a company in Thailand. Some opt to own a condo in this way in order to make selling the condominium easier, while others initially purchase the condo indirectly through a corporate entity. In either case, the practice is technically legal. Although, use of so-called “nominee shareholders,” is illegal in Thailand and Thai authorities are increasingly on the lookout for corporate structures utilizing nominees. That being said, the definition of “nominee” is somewhat vague.
This leads us back to the issue of Amity Treaty Companies. Amity Companies are specifically precluded from ownership of Thai real estate pursuant to the provisions of the Treaty of Amity, while the Thai Condominium Act allows foreigners to own a Condominium outright. This begs the question: can an Amity Treaty Company own a Thai Condo in the same manner as a foreign natural person could? This author has not adequately settled this question in his own mind and welcomes any comments regarding this issue. The provisions of the Treaty of Amity preclude land ownership and although many believe that Condo ownership is simply ownership of a unit, the Chanote does pass title to an interest in the underlying land, so there would seem to be a compelling argument that a condo owner is something of a landowner and, if so, this practice would likely be precluded under the provisions of the Amity Treaty.
4th FEB 2010
March 5, 2010 to Mark the End of the Free Thai Tourist Visa
Posted by : admin
Among the Expatriate Community in Thailand, one of the popular websites for up-to-the-minute information about visas and immigration issues is: Thaivisa.com. At the time of this writing Thaivisa.com is reporting that the free Thai tourist visa program is coming to an end. To quote a posting on that site directly:
“The Ministry of Foreign Affairs in Bangkok, who oversees the Royal Thai Embassies and Consulates worldwide, today confirms to Thaivisa.com that visa fees will be levied for all visa classes from March 5, 2010. Tourist visas are valid for a 60 days stay and may be extended at local Thai Immigration offices…Tourist visas has been issued free of charge since June 25, 2009 in an effort to revive the Thai travel and tourism industry.”
As stated above, the Tourist visa fee waiver program was initiated to help in reviving the beleaguered Thai tourism industry which suffered some setbacks after an airport closure and the worldwide economic downturn. It would seem that these measures have been successful in buoying the economy as the decision has been made to end the program.
This may come as a relief to the staff of Royal Thai Consulates and Embassies overseas as it has been rumored that the tourist visa fee waiver has caused an upsurge in tourist visa applications and caused a drain upon the resources of many Thai Diplomatic and Consular postings.
These authors hope that the rescission of the Thai visa fee waiver marks the beginning of an overall recovery in the Thai tourism sector as it is one of the most important facets of Thailand’s service economy. The impact that the re-imposition of the tourist visa application fee will have upon the “visa run” remains to be seen, but many believe that most visa runners will continue to opt for the tourist visa as it currently provides a significantly longer duration of status compared to land border visa exemptions which are currently only being granted for a maximum validity of 15 days.
Some have also noted that the end of the free tourist visa may result in the increased promulgation of dual entry tourist visas as Thai Consulates and Embassies are more willing to grant such travel documents because they are once again being compensated for the processing.
It should be noted that a 60 day Thai tourist visa can be extended by 30 more days if the bearer takes their passport and visa to a local Thai Immigration office and pays the extension fee. At present, the extension fee is approximately 1900 Thai baht.
For related information please see: Business Visa Thailand.
26th JAN 2010
Thailand Property Issues: Benefits of a Yellow Tabien Baan
Posted by : admin
There are many foreign nationals who have opted to take up long term residence in the Kingdom of Thailand. For many expatriates, a pivotal question regarding residence in Thailand deals with the issue of Thai property law. Under the current laws in the Kingdom of Thailand foreign nationals are effectively barred from purchasing a Freehold Chanote (Title Deed) to land in the Kingdom. This being said, foreigners are allowed to take freehold title to Thai Condos provided certain legal requirements are met, but for many foreign nationals in Thailand actual home ownership is the preferred method of living in the Kingdom.
In the past, a Thai company could be used to own Thai Real Estate, but the company had to be structured in such a way that it comported to Thai law. In recent months there has been some discussion by Thai government officials about doing away with this system of property ownership. How this will play out remains to be seen, but some foreigners, who are still interested in enjoying Thai property, are looking at other ways of structuring their interests so as to properly comport with possible future restrictions.
One method involves the bifurcation of Thai title. What this means is that the land underneath a structure is owned by a Thai while any structures on the land are owned by a foreigner. This arrangement would be legal under current Thai law, but many are confused about how such an arrangement could be set up. This is where the Yellow Tabien Baan becomes an issue.
A Yellow Tabien Baan is used by foreign nationals who live in the Kingdom. However, they are very difficult to obtain and are usually only promulgated if the foreign national has bought a Thai condo. That being said, a foreign national who is on a Tabien Baan can obtain a building permit to build a structure in Thailand. Once the structure is built, it can be owned wholly by a foreign national. A foreigner could secure long term lease to the underlying property while maintaining ownership of the structure. Use of a Thailand usufruct or superficies would also strengthen the foreigner’s property interests without violating the de facto restriction placed upon land ownership for foreigners. This is not the only benefit that a Yellow Tabien Baan can confer upon a Foreigner in Thailand as there are other major benefits that foreign nationals can enjoy by being on a Foreign Tabien Baan.
25th JAN 2010
Thai Visas From Canada
Posted by : admin
Thailand has been voted one of the top vacation destinations for those on a budget. Many believe that Thailand with its beautiful weather, captivating beaches, and incredible nightlife, is truly a modern paradise. Many look to the Kingdom of Thailand as a great place for long term tourism or as a location for retirement. No matter what one’s desires are, Thailand has something for everyone. In recent years, Immigration rules, regulations, and restrictions have made staying in Thailand for a long period of time something of a challenge. However, there are still ways in which foreigners can obtain long term visas.
For those of Canadian nationality who are thinking of remaining in Thailand long term, it may be better to obtain a Thai visa while in Canada rather than traveling to Thailand and seeking a Thai visa extension from within the Kingdom. The reason for the need for preparation is based upon the fact that Thai Immigration does allow a foreigner to enter Thailand for a period of 30 days without a visa. At the time of this writing, this rule applies to Canadian nationals. However, the fact is that the foreigner in the Kingdom in this status does not actually have a Thai visa, but instead has a Thai visa exemption. Therefore, applying for an extension in Thailand is very difficult as, legally speaking, there is no visa to extend. This scenario often creates a situation in which the foreigner must then do a “visa run” to an Embassy or Consulate outside of Thailand in order to obtain a visa and return to the Kingdom.
By obtaining a Thai visa before leaving Canada, Canadians can forestall the need for a visa run as Thai multiple entry visas can sometimes be issued with a validity of one year. Upon each entry, the foreign national using a 1 year multiple entry visa will be admitted to the Kingdom for a period of 90 days. That being said, in order for a new 90 days of lawful status to commence all the foreign national need do is leave the Kingdom and reenter. In a sense, this is a visa run, but it only occurs every 90 days rather than once every 30 or 60 days. Also, in this situation, there is no need to go to an Embassy near Thailand as the foreigner’s 90 day stamp should be granted automatically upon reentry.
Another issue that should be considered is that of employment. A 1 year multiple entry Thai business visa can be used as a basis for submitting a Thai work permit application.
24th JAN 2010
Thailand Business Visa Extensions and New Ministry of Labor Rules
Posted by : admin
Thai business visa rules can be confusing for some as those who are new to the Kingdom of Thailand can become confused by the Thai Immigration system. Even seasoned expatriates in Thailand have trouble keeping up with the constantly changing rules and administrative procedures. The reason for the confusion can at least be partially attributed to the fact that, like US immigration rules and regulations, there are two Thai government agencies with overlapping authority where Thai visa matters are concerned. The first agency is the Royal Thai Immigration Police who are similar to United States Immigration officials at the Department of Homeland Security in that they oversee the administration of Thai Immigration rules from inside the Kingdom. Then there is the Thai Ministry of Foreign Affairs. The Thai Ministry of Foreign Affairs, through Thai Embassies and Consulates abroad, is tasked with adjudicating visa applications outside of Thailand and when said visa applications are approved they are tasked with promulgating visas.
This brings us to the issue of Thai visa extensions. For many foreign nationals working in the Kingdom of Thailand a visa extension is necessary in order to remain in the Kingdom long term. Some opt to use multiple entry visas, but generally, these visas are not convenient for those who wish to remain uninterrupted or eventually apply for Thai Permanent Residence.
In recent months there has been some discussion among Thai government officers about tightening up the Ministry of Labour regulations regarding foreign workers. Apparently, new rules will go into effect in February 2010 which would make Thai work permit rules more stringent. This will likely have a collateral impact upon those seeking Thai visa extensions as work permit renewal is usually required by Thai Immigration before they will extend a Thai visa. At one time, the One Stop Service could be used by employees of companies with a high registered capital or BOI Companies. One Stop Service allowed foreigners to apply for both a work permit renewal and a visa extension at the same time.
However, One Stop’s jurisdiction has been significantly curtailed and the service itself is effectively non-existent for small businesses. Now, most foreigners wishing to renew their work permit and visa must do so by first making a trip to the Ministry of Labour and then traveling to the Royal Thai Immigration Police headquarters to extend the visa after work permit renewal. At this time, the process seems cumbersome, but there is some hope that the system will be streamlined so as to facilitate more efficient processing of work permits and visas.
17th JAN 2010
Will New Work Permit Rules Impact Those With Amity Certification?
Posted by : admin
In recent weeks there has been some speculation about new regulations with regard to Thai work permits. In February of 2010, the Ministry of Labour regulations regarding work permits are to be updated. These updated rules will likely result in more stringent measures with regard to foreign labor in Thailand. Recently, there has been some talk about liberalizing certain sections of the Foreign Business Act (FBA). This Act restricts the type of activities that foreign nationals are allowed to engage in while present in the Kingdom of Thailand.
Under the provisions of the FBA, there are three lists of restricted activities. List 1 is the most restricted and is unlikely to be liberalized anytime in the near future. List 2 is also unlikely to be opened up to foreign participation anytime soon, but this is more likely to happen when compared to list 1. Finally, list 3 lists those activities that are the most likely to be opened up to foreign competition. There have been those in the current government floating the idea of liberalizing list 3, but the upshot of this would be more stringent enforcement of current work permit rules.
This leads us to the point of this post: what will happen to those certified under the US-Thai Amity Treaty? Under the provisions of this Treaty, American Citizens are accorded certain privileges when it comes to operating a business in the Kingdom of Thailand. In most cases, changes to the Foreign Business Act have little impact upon those operating under the Treaty as Treaty companies are accorded “national treatment.” This means that once a company has an Amity Treaty Certificate they are viewed, in the eyes of Thai law, as a Thai company. However, work permit regulations are applied to Thai companies in the same way that they would be applied to foreign companies. Therefore, those operating under a Treaty Certificate must still adhere to relevant Ministry of Labour regulations. Consequently, although the work permit regulations will not effect an Amity Treaty Company per se, they have a collateral impact upon any foreigners working in said company as the provisions of the Treaty only apply to the juristic entity and not to any of the foreign nationals working for that entity.
At this time, the US-Thai Treaty of Amity is still the law of the land in both the Kingdom of Thailand and the United States of America. There are certain benefits enjoyed by nationals of both countries as Americans are entitled to Treaty of Amity protection when conducting most types of business in Thailand while Thais are granted Treaty Trader visas should they meet the requisite qualifications pursuant to the relevant provisions of the Treaty.
11th JAN 2010
In recent days there has been speculation about Thai authorities cracking down on any Thai Company which was formed solely for the purpose of facilitating foreign ownership of Real Estate in Thailand. Unfortunately for foreign nationals, the Thai government restricts land ownership and will not allow foreign nationals to own land without Ministry of Interior approval. As a practical matter, this approval is nearly impossible to obtain so the Kingdom essentially has a De Facto ban on Real Estate ownership by foreigners. This being said, foreign nationals are still permitted to own Thailand property in the form of condominiums. A foreign national may own a Thai condo in freehold provided the condominium complex adheres to the provisions of the Thai Condominium Act.
In a journal written about the Thai housing market this author found the following quotation:
“[O]n May 15, 2006, the Ministry of Interior issued a policy to all provincial governors regarding the avoidance of foreign land ownership laws. The policy sought to prevent the purchase of land for the benefit of a foreigner in accordance with Section 74 of the Land Code. It directs officials to be more vigilant in scrutinizing land purchases of land by entities with foreign shareholders or directors, or where reasonable grounds exist to believe that a Thai is a nominee shareholder on behalf of a foreigner. The policy requires competent officials to carefully scrutinize the supporting evidence submitted for consideration, while paying particular attention to the occupation, duration of work and the monthly income of the Thai shareholder. If, following the investigation, the competent official’s opinion is that the transfer registration represents an avoidance of law or that a Thai is trying to purchase land for a foreigner’s benefit, he should investigate further and submit the case to the Land Department for ministerial advice.”
As can be gathered from the above quote, the Thai government places a great deal of administrative discretion in the hands of local land office personnel when it comes to the issue of foreign ownership of Thai property. It would appear that these administrative prerogatives will be brought to bear against those that use nominee shareholders to own land or Real Estate in Thailand. In this legal environment, it may be wise for foreign nationals to carefully assess their options in order to ensure that the best decisions are made with regard to property investment. In any case, it would be wise for anyone thinking of investing in the Kingdom of Thailand to consult an attorney in order to come up with a coherent strategy.
10th JAN 2010
Work Permit Rules May Become More Stringently Enforced
Posted by : admin
Work Permits are always an important issue for foreign nationals living in Thailand. Under Thai law, the right to work is bifurcated from the right to remain in the Kingdom. Therefore, many find that it can be easy to be lawfully admitted to Thailand on a validly issued Thai visa and remain for relatively long periods of time, but it can be difficult to obtain work authorization in the form of a Thai work permit. One of the reasons for this difficulty is that the Thai Foreign Business Act restricts the types of activities that foreign nationals are allowed to engage in while present in Thailand. In many ways, Thailand has maintained protectionist measures in order to insulate the Thai labor force from some of the detrimental side effects of globalization.
Recently, it was announced that the government would be easing some of the restrictions in the Thai Foreign Business Act. At the same time, the Thai government has also announced that the rules still on the books would become the subject of more stringent enforcement. This leads us back to the issue of work permits. It would appear that the government is preparing to allow foreign companies to engage in certain previously restricted activities, but the upshot of this is that the rules and regulations regarding activities that are still restricted will be enforced more diligently than before. To quote a recent posting on Thaivisa.com from the British Chamber of Commerce in Thailand Magazine:
“Unfortunately, the Labour Department has revised Work Permit regulations and a new list of the types of work foreigners are allowed to conduct will be issued by February 2010 at the latest. According to the current draft of the Ministerial Regulation, the new rules and practice will impact on current work permits (when they are extended) and also new work permits. [...] Despite the position of all foreign Chambers that liberalisation and streamlining of visa and work permit regulations would be advantageous for attracting and retaining much needed foreign investment, certain ministries appear to have taken the opposite view.”
It would appear that the Thai Ministry of Labour is taking a rather tough stance with regard to the enforcement of work permit regulations.
Although it is quite common to see such attitudes in difficult economic times, this author cannot help but wonder if this is the best course of action for the overall Thai economy. Small and medium sized businesses owned or managed by foreign nationals will likely be the most adversely impacted by this new policy and there is strong evidence that such enterprises act as the driving force for the economy-at-large. In these tough economic times, attracting foreign skilled labour and investment may be better than promulgating rules that make working in Thailand more difficult.
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