Integrity Legal

During the month of October 2015, it came to this blogger’s attention that the Thai government began to heavily enforce regulations against those overstaying their Thai visa and those utilizing nominees in order to control companies in Thailand. In a recent article on the Khaosod English website it was noted that more than 9000 people were arrested and detained pending deportation for overstaying their visas. The article went on to note:

The penalties announced Sunday are identical to regulations announced by the immigration bureau last year that have been in effect since Aug. 17, 2014. Foreign nationals who remain in the country more than 90 days after their visa expires are to be banned for one year. Those who overstay for one year, three years or five years are forbidden from re-entering the country for three years, five years and 10 years respectively. If they don’t turn themselves in and are instead caught by police, those who have overstayed less than a year would be blacklisted for five years while those with over a year face a 10-year ban…

The penalties referred to above were apparently applied to those detained in the aforementioned roundup and it would appear that such measures are likely to be applied to overstayers in the future. For this reason it is strongly recommended that those wishing to stay in Thailand obtain a visa and leave within the specified period of validity unless a Thai visa extension is obtained. There are many types of Thai visa categories including business visas, retirement visas, O visas for family members of Thai nationals, and the greatly anticipated long stay tourist visa which is set to begin being issued in mid-November.

Meanwhile, Thai officials in the Ministry of Commerce seem to be implementing stricter enforcement of rules regarding the use of nominee shareholders in Thai companies. Under the Foreign Business Act, foreign nationals are not permitted to use Thai nominee shareholders in order to circumvent the restrictions on foreign ownership of Thai companies. Those caught violating this law can face fines or possible imprisonment. Apparently, officials with the Department of Business Development will be investigating certain companies to determine if nominees are in use. To quote directly from The Nation:

The 10 sectors to be inspected are food and beverage, tourism, property rental, the property trade, car rental, spa, handicraft and souvenir retail, Internet retailing, direct sales, and education consultants. Chainarong said that those sectors would be targeted because it was believed that a high proportion of their businesses were foreign controlled through the use of Thai nominees…

Clearly Thai regulators are becoming increasingly serious regarding the enforcement of Thai law in both the realm of immigration and business. It should be noted that American Citizens are permitted to own 100% of certain types of Thai corporations pursuant to the provisions of the US-Thai Treaty of Amity.

Tags: 90 day overstay Thailand, business visas, Foreign Business Act, Nominee Company Thailand, nominees, O visas, Retirement visas, Thai blacklist, Thai blacklisted, Thai Nominees, Thai Visa Extension, Thai Visa Overstay, Thailand Blacklist, Thailand blacklisted, Thailand Nominees, US-Thai Treaty of Amity, visa overstay Thailand
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For many the idea of setting up a business in Thailand is desirable if for no other reason than the thought of waking up and going to work every morning in one of the most idyllic countries in the world. In the past, many foreign owned businesses in Thailand were structured in such a way that they avoided some of the more stringent provisions of the Thai Foreign Business Act. In most cases Thai nominee shareholders were used to own the majority of a Thai company thereby ensuring that the company was considered “Thai” for purposes of the Act. However, this practice became illegal pursuant to section 36 of the currently enforced version of the Foreign Business Act as quoted below:

“A Thai national or a juristic person, not being a foreigner under this Act, who assists in or aids and abets or participates in the operation of a foreigner’s business specified in the Lists annexed hereto where such foreigner is not permitted to operate that business or who operates the business jointly with a foreigner in the manner holding it out as the former’s sole business or who acts as a foreigner’s nominee in holding shares in a partnership or a limited company or any juristic person with a view to enabling the foreigner to operate the business in circumvention or violation of the provisions of this Act, or a foreigner who allows such act to be committed by a Thai national or a juristic person that is not a foreigner under this Act, shall be liable to imprisonment for a term not exceeding three years or to a fine of one hundred thousand Baht to one million Baht or to both, and the Court shall order the cessation of the assistance or the aiding and abetting or order the cessation of the joint operation of the business or order the cessation of shareholding or partnership, as the case maybe. In the case of violation of the order of the Court, the violator shall be liable to a fine at the daily rate of ten thousand Baht to fifty thousand Baht throughout the period of the violation.”

Notwithstanding the fact that the use of Thai nominees is illegal, the practice persists. This fact was recently noted in a Bangkok Post article on the topic. However, in some cases discerning whether a company is utilizing nominees or simply structuring itself in such a way so as to provide security to foreign shareholders can be difficult. Therefore, when structuring a company in Thailand it is often prudent to seek the advice of competent legal advisers to in order to ensure that one’s business practices comport with relevant laws and regulations.

Tags: Company Nominees Thailand, Foreign Business Act Thailand, Nominees in Thailand, Thai Company, Thai FBA, Thai Nominee, Thai Nominee Shareholders, Thai Nominees, Thailand company, Thailand Nominee Shareholders
Posted in Thailand Business | 1 Comment »