More documents sought in nominee hunt
Source: Bangkok Post February 15, 2007
Inspections of land holdings by companies suspected to be foreign-owned must await documentation from the Business Development Department, according to the Lands Department. Sub Lt Khantachai Vichakkhana, the deputy director-general of the Lands Department, said it was the responsibility of the Commerce Ministry unit to determine the nationality of companies and whether illegal shareholding structures were used.
Thai law sharply restricts foreign ownership of land. Corporate entities doing so must be majority controlled by Thais. But nominee structures are commonly used to bypass the law, particularly in tourist areas such as Phuket and Pattaya. Sub Lt Khantachai said that since last year, provincial land offices have had the authority to inspect companies suspected of having illegal nominee structures.
If violations are found, provincial governors have the right to direct the companies to sell off the land within 180 days.
But Sub Lt Khantachai said that before an inspection could be made, information was needed in co-operation with the Business Development Department, which is responsible for corporate registrations.
''We cannot check potential nominees until a prosecution is made. In any case, there must be evidence from the Commerce Ministry as well,'' he said.
The Lands Department directed its provincial land offices last June to submit information on companies that had purchased land or properties in their jurisdiction to the Commerce Ministry for verification of their status.
To date, no formal report of an illegal nominee structure has been made to the Lands Department.
Sub Lt Khantachai said Foreign Business Act reforms and tighter enforcement of existing land laws were unlikely to result in a slowdown in the property market.
''Actually, what these reforms will do will be to help clamp down on asset laundering in the country,'' he said.
Kanissorn Navanugraha, the director-general of the Business Development Department, agreed that greater co-operation with the Lands Department was needed to improve enforcement of the law.
He said the department only forwarded information on various juristic entities to the Lands Department on request, but did not have the right to stipulate whether a nominee structure existed or not.
''If a company is suspected of using an illegal nominee structure, we are obligated to report the case to the police and await a formal court ruling,'' Mr Kanissorn said.
He said the Lands Department was empowered to investigate on its own whether a foreign entity used nominees.