The Thai government has threatened that expats could face deportation over illegal nominee ownership arrangements made by foreign nationals.
Under Thai law, foreign nationals are not allowed to own residential land but can own apartments so long as they own under 50% of any development. They can buy property on land but not the land itself.
Expats have managed in the past to get around such restrictions via complex structures where companies and not individuals own the land which is referred to as ‘nominee ownership’.
The Thai ombudsman Siracha Charoenpanij has described the proposal of ‘carrot and stick’ legislation in which those who provide information about illegal ownership can be rewarded with up to 20% of the land value of the sale price.
The new legislation has also been drawn up to crack down on professionals like lawyers and consultants who facilitate the process of these nominee ownerships. Removing loopholes for foreign buyers would at least have the advantage of meaning that people are not cheated out of their money.
However, it is not necessarily clear to be able to define what nominee structures are. Thai citizens and companies can rightfully invest in the shares of the foreign companies who are buying up the land.
Marcus Collins of the DFDL law firm in Thailand said that “we would welcome clarification of what nominee really means and what is and isn’t legal, and hopefully that is something that will happen once this issue is brought to the attention of parliament.”
Charoespanij’s proposals are due to be brought before parliament later this year.