Tag Archives: thailand

Thailand Clamping Down on Thai Nominees Used by Foreign Investors

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Thailand’s Department of Special Investigations (DSI) is currently building a web-based program that can track down individuals who violate the country’s Foreign Business Act.

Specifically, the department will use the program to go after Thais who act as Thai nominee shareholders for foreign investors.

Nominees are Thai nationality shareholders and directors of companies that hope to skirt legal restrictions on foreigners doing business or owning land in Thailand.

Thailand business and land laws require that Thais must own a majority of shareholding of any company operating in a foreigner restricted industry.

The basic requirement is usually 51% Thai nationality ownership. However, certain laws require even greater Thai nationality ownership.

Law offices and real estate sales companies have traditionally been the provider of “nominee” shareholders.

However, nominee ownership is, and has been, clearly illegal for some time in Thailand.

The Thai government’s rationale for requiring by law Thai majority ownership and going after pseudo-shareholders is to safeguard Thai businesses and Thai landowners from unfair competition from large foreign companies.

Authorities have prosecuted numerous companies and individuals for violating Thailand nominee law restrictions.

The DSI’s nominee-tracking program will first launch in Surat Thani and Chiang Mai.

US Immigration Office in Bangkok Ceasing Operations

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The US State Department announced that it plans to close all of its overseas US Citizenship and Immigration Services (USCIS) field offices throughout the coming year, including Thailand’s immigration office located in Bangkok.

USCIS field offices typically handle family visa requests and issues, international adoptions, and a wide range of other more specialized immigration services.

The Bangkok USCIS office is the regional “hub” office for Southeast Asia.

The USCIS has another 22 offices spread across regions of Latin America, Asia, and Europe.

Based on the planned closures, USCIS field office services will be transferred to US embassies and consulates as well as the State Department.

Specific key functions that can be expected to be taken care of by embassies and consulates after the change include petitions from citizens attempting to bring their family members to the US, processing requests from asylum seekers and refugees, assisting US citizens in adopting foreign children, naturalizing US military personnel who don’t yet hold citizenship, and investigating fraudulent visa applications.

Our law firm’s most frequent cases involving the local Bangkok USCIS office have primarily been returning US resident family visa applications and renouncing permanent residency status.

The services provided by the Bangkok USCIS office will likely be assumed by the US Embassy in Thailand or US-based USCIS offices.

The closure will primarily affect US citizens residing in Thailand who seek to petition for family-based US visas for immediate family members.

Under the current system, US residents in Thailand can often use the Bangkok USCIS directly, saving significant time.

New Real Estate Right Recognized by Thai Law

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Thai law allows for various legal methods to give “grantees” a right to use real estate, (referred to as “immovable property” under Thai real estate law) as leases, superficies (allowing the grantee to own buildings and other structures on land), usufructs (allowing the grantee the possession of, use of, or enjoyment of the benefits of an owner’s land), and habitation (allowing the grantee to reside on another’s land).

Some of the pitfalls of these rights for a grantee are that they are not easily transferable to third parties and are not readily available as collateral for a loan since the consent of the landlord is normally required. 

A new type of real estate right has been created that may assist in providing more expansive rights to grantees.

The new right is known as a “Sap-Ing-Sith”. In addition to using the underlying property as they would under a normal lease, holders of a Sap-Ing-Sith can also transfer the right to a third party or use it as collateral for a loan without the need to obtain consent from the landlord.

Only land covered by a Chanote (a title deed in Thailand land law), buildings constructed on Chanote, and condos can benefit from a Sap-Ing-Sith.

A Sap-Ing-Sith is created by an agreement by the landlord and grantee in writing. The period of a Sap-Ing-Sith can last up to 30 years and must be registered with a Thailand land office, which will in turn issue a Sap-Ing-Sith certificate.

Thai Government Passes New Land and Building Tax Act

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Recently, the National Legislative Assembly passed the Land and Building Tax Act.

The new law will replace both the House and Land Tax and the Local Development Tax when it takes effect on January 1, 2020.

The bill alters land and building tax laws in Thailand by placing property into four distinct legal categories: agricultural, residential, commercial, and vacant.

Each property type has its own tax rates based on the appraisal value.

For agricultural use, there are five tax rates:

  1. 0.01% for land valued between 1 million and 75 million baht;
  2. 0.03% for land valued between 76 million and 100 million baht;
  3. 0.05% for land valued between 101 million and 500 million baht;
  4. 0.07% for land valued between 501 million and 1 billion baht; and
  5. 0.1% for land valued at more than 1 billion baht.

Agricultural land worth less than 50 billion is exempt from taxes if it is owned by a sole individual.

For residential use, there are four tax brackets:

  1. 0.02% for land valued between 1 million and 50 million baht;
  2. 0.03% for land valued between 51 million and 75 million baht;
  3. 0.05% for land valued between 76 million and 100 million baht; and
  4. 0.1% for land valued more than 100 million baht.

For first-time home-owners, a tax-exemption of up to 50 million baht is available.

For commercial use, there are five tax rates:

  1. 0.3% for land valued between 1 million and 50 million baht;
  2. 0.4% for land valued between 51 million and 200 million baht;
  3. 0.5% for land valued between 201 million and 1 billion baht;
  4. 0.6% for land valued between 1 billion and 5 billion baht; and
  5. 0.7% for land valued at more than 5 billion baht.

For vacant or unused property, there are five tax applicable rates:

  1. 0.3% for land valued between 1 million and 50 million baht;
  2. 0.4% for land valued between 51 million and 200 million baht;
  3. 0.5% for land valued between 201 million and 1 billion baht;
  4. 0.6% for land valued between 1 billion and 5 billion baht; and
  5. 0.7% for land valued at more than 5 billion baht.

The tax rate on vacant lands and buildings will increase by 0.3% each year but will not exceed 3%.

Cross Recognition of Thai- American Parentage

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An Illinois court ruled in favor of a Thai woman recognising an American as her child’s father

triplet-babys-in-stroller

An Illinois Court has ordered a man to pay child support in Thailand to triplets he had fathered through assisted conception methods.

Justice Lampkin of the Circuit Court of Cook County ruled in accordance with a judgment order from Thailand recognizing Harlow to be the biological father of triplets conceived by gamete intrafallopian transfer (GIFT) and imposed child support obligations on him.

The mother, Wipaporn T. petitioned the Circuit Court of Cook County to recognize and enroll the Thai judgment under the principles of comity.

Harlow tried to get the petition dismissed under  claims that it contradicted an Illinois Parentage law that does not recognize sperm donors as fathers. However, Harlow had signed the consent form for the transfer under “husband”. Wipaporn also submitted photographs showing Harlow and herself participating in a traditional Thai marriage.

The Illinois court ruled that since Harlow had acted like the father prior to conception and had “plans to claim the three boys as dependents, take tax deductions for his support payments to them and enable them to access their rights of U.S. citizenship,” he must support the three children.

Related topics:

Thailand Paternity Right

Thailand Child Support