Integrity Legal

It recently came to this blogger’s attention that the Department of Special Investigations in Thailand have undertaken a raid on various offices of those reportedly engaged in the maintenance of corporate structures utilized for the sole purpose of allowing foreigners to enjoy use of Thai real estate. The text of the announcement from DSI was originally published in Thai. We have undertaken a translation of the announcement in order to provide clarity for what could be considered an important issue for expats in Thailand. The translation is below:

DSI in collaboration with the Institute of Communication Science and the Board of Investment are currently investigating a group of Law Offices in the Phuket, Suratthani and Bangkok area that seem engaged in ‘camouflaged’ corporate structures acting as nominees on behalf of foreign shareholders.

As per government policy to actively pursue foreign investors using Thai nominee companies to own land in order to protect the nation’s interests.  On the 15^th of August 2018, Police Colonel Paisit Wongsmuang, the head of DSI; and Police Major Suriya Singhokmol, his second in command; in collaboration with The Institute of Communication Science and the Board of Investment obtained a warrant to search 4 offices as follows:

1. The first team led by Piya Watnawarangul (special agent investigating civil embezzlement) searched the premises of the Office’s Phuket Branch located at 393/4-5 Moo 1 Soi Bantao 1 Srisuntorn Rd., Chengtalay Subdistrict Thalang District, Phuket.  The premises appeared to be the work place of the Thai Nominees and a suspected location for falsifying documents for the purpose of camouflaging nominee activities.
2. The second team led by Worapoj Maihom, searched the premises of the Office’s accounting branch located at 123/9 Moo 5 Chengtalay Subdistrict Thlang District, Phuket.  The office appeared to provide accounting services for the Nominee companies.
3. The third team led by Jakrapop Klinhom searched the premises of the firm’s Samui branch office located at 17/10 Moo 1 Taweeratpakdee Borpud Sub district, Koh Samu District, Suratthani .  The premises were apparently the work place of the Thai Nominees and a suspected location for falsifying documents for the purpose of camouflaging nominee activities.
4. The fourth team led by Mr. Taweewat Surasit, searched the premises of the Bangkok Branch located at Rajanakarn Building, 3 Floor AA Sathorn Rd, Yannawa Subdistrict, Sathorn District Bangkok, and the work place of the Foreign Managing Directors.

The search yielded copies of documentation, computer data and hardware that will be used as evidence in court proceedings.

Additional information found at each premises showed that the foreign investors seemingly purchased over 80 plots of real estate, consisting of land, vacation homes and houses.

Sources also reveal that the firms seem engaged in nominee activities that allow a large number of foreign investors to buy and sell land in Southern Thailand such as Surat Thani, Pangna, Phuket and Krabi with such activities grossing over 2 billion baht per year.

The investigation has found that the group has used Thai employees to incorporate Thai companies.  These Thai Corporate Entities in turn are used to hold shares in other companies for the purpose of allowing foreign investors to buy land.  These activities are in violation of the foreign business act (1999).  Using Nominees to hold land on behalf of foreign persons or entities has a negative impact on national interests and the real estate industry.  DSI will continue to actively pursue and shutdown such activities.

Please note that the above translation should not be viewed as a definitive interpretation of the underlying announcement and is solely for informational purposes. It should also be noted that the matter has yet to be fully settled via adjudication and the final outcome of the case remains to be seen.

The reader of this posting should note that Thai authorities are becoming increasingly efficient and sophisticated in their law enforcement endeavors. This is clear from the increasing number of immigration raids and the heightened scrutiny of officers throughout the Thai civil bureaucracy on issues ranging from revenue assessment to traffic ordinances. Clearly, it is a time to be mindful not only of the formalities inherent in the letter of relevant laws, but the policy considerations which embody the spirit of those laws as well.

Tags: Board of Investment, BOI Company, BOI Company Thailand, Foreign Business Act, Foreign Business License, Land Holding Company Thailand, Thailand BOI Company, Thailand Business Registration, Thailand company, Thailand company registration, Thailand Holding Company, Thailand Nominee Company, Thailand Property Company, Thailand Real Estate Company
Posted in Thailand Property, Thailand Real Estate | No Comments »

In recent months, the rules upon which the regime for issuing and maintaining Thai work permits and visas have been undergoing some changes. However, the permanence of these changes remains to be seen and the practical implications of these changes are also open to speculation. Hopefully the following posting with provide some clarification with respect to where work permit and visa rules currently stand.

Work Permit Restrictions Appear to be Loosened

Since the promulgation of the Emergency decrees regarding work permits in Thailand analysts seem increasingly convinced that regulations regarding time, place, and manner of work in Thailand have loosened. In the past, Thai work permit regulations (and the enforcement agencies associated therewith) viewed the rules very strictly when it came to the specific locations where foreigners could undertake labor, the specific functions foreigners could perform, and the timing of when a foreign worker could begin working. For example, foreign temporary workers had to await issuance of a work permit book or temporary work document in order to begin working. Meanwhile, those issued with long term work permits were at one time restricted to performing their job only within the premises of the business acting as the work permit sponsor. Later, the geographic scope of labor endeavor was expanded to allow foreigners to undertake work throughout a specific province in Thailand. However, under any circumstances the foreign national with work authorization had to be circumspect in their endeavors as the work activities they undertook had to fall within the boundaries of the job description specified within the provisions of the work permit itself.

Pursuant to the provisions of the second emergency decree regarding the management of foreign workers in Thailand it appears that many of the restrictions regarding geographic scope of activity have been lifted. Meanwhile, the strict scrutiny of job functions appears to be a thing of the past as well (although a list of occupations restricted to Thai nationals is still in force so long as the activity in question is not specifically in violation of that list the foreign worker should be free from sanction). Furthermore, it appears that certain temporary workers who are brought into Thailand for a short period of time may be able to perform their function in a much more immediate manner compared to the past as, depending upon circumstances and subject to the aforementioned list of restricted activity, many workers may be able to immediately begin performing their functions.

The Return of the One Year Multiple Entry Visa?

It would seem that there is another possible change to Thai regulations regarding work authorization and business visas in Thailand. Apparently, regulations now stipulate that some of those working for a foreign company in Thailand (such as a Representative Office) are no longer required to obtain a work permit. This new exemption apparently only extends to Directors of such organizations. Furthermore, it appears that so-called Amity Treaty Companies (those corporations certified as American and therefore accorded protections pursuant to the US-Thai Treaty of Amity) are now subject to such exemption. Under such circumstances the directors of such companies are able to apply for a 1 year multiple entry visa from their country of origin. As of the time of this writing, this blogger has yet to personally deal with a matter arising under these new rule changes, but the creation of new immigration options is always noteworthy. It should be noted that these regulatory changes appear to be exclusive to Labor matters. Thai immigration regulations have not changed with respect to the rules regarding visa extension in the Kingdom. At the present time a work permit appears to still be required for those wishing to remain in the Kingdom long term via a Thai business visa extension application.

Tags: Alien Workers Act 2008, Amity Company, Amity Treaty, business visa, Non-Thais Working Management Emergency Decree, Non-Thais Working Management Emergency Decree 1, Non-Thais Working Management Emergency Decree 2, Thai Business Visa, Thai Visa, Thai Visa Extension, Thai Work Permit, Thailand B Visa, Thailand Business Visa, Thailand Treaty of Amity, Thailand visa extension, Thailand Work Permit, Thailand Work Visa, Treaty of Amity, Treaty of Amity Company, US-Thai Treaty of Amity, work permit Thailand, Work Visa Thailand
Posted in Amity Treaty, Thailand Business, Thailand Visa, Thailand Work Permit | No Comments »