Transcript of the above video:

As the title of this video suggests, we are discussing usage of “nominee companies" associated with basically usage of land in Thailand. As we have discussed in many other videos on this channel, there is a methodology out there and in my opinion people are far too cavalier about it where people say "oh you just set up a company and then have the company act as a Holding Company for land and then you can effectively own land here in Thailand notwithstanding the fact that one is a foreigner." That just, again people are very cavalier about that. I like to quote that movie Looper where he says: "you are using very precise language to describe a very fuzzy mechanism", and that is exactly what is going on here. In my experience, there are certain circumstances where it may be possible for a foreign national to have some sort of corporate setup with a Thai National where they are operating some sort of business and there is land owned under that Corporate Charter, under the auspices of that company. It's possible but it really needs to be done delicately and in my opinion there is a very limited number of circumstances where that is going to be viable and it's not going to have a problem if it is examined by relevant authorities. 

The reason I thought of making this video, I was reading recently from the Bangkok Post, that is bangkokpost.com, the article is titled: Foreign land ownership proposal withdrawn from Cabinet. We have discussed this at length in other videos. They were talking about allowing foreigners to maybe own one rai of land at 40 million Baht or above. That has been pulled off the table so to speak. It does not look like that it is going to happen anytime soon but this this is an interesting article. I am going to quote an excerpt; a lot of information in there. I urge you to read that article in detail but I am going to quote this excerpt: "In practice, foreigners were already able to acquire land through long-term leases and could purchase up to 49% of all the units in a condominium building or through purchase by nominee companies Mr Wissanu said." And this is Deputy Prime Minister Wissanu Kruegnam. This person has been a spokesman for the Thai Government frequently over the past couple of years. 

I have got to take a little issue with what he said right there though because that last part about "nominee companies" and I'd be very curious to know exactly what was said in Thai because it is sort of being quoted and paraphrased and I think maybe some of the nuance was lost. He might have been saying something like what I just said, “there were a limited subset of circumstances where that may be possible” but again the use of nominee companies; nominee is a term of Art. "Nominee" has legal ramifications and again the media gets out there and just uses these terms sometimes and I don't think they realize the legal import of this kind of terminology which causes me to turn to the Foreign Business Act of 1999 and I got this from dbd.go.th. Now this is an English language version of the Thai version of the Foreign Business Act. Bear in mind, this is for educational purposes only. The English language version of this is not controlling; Thai language will be controlling in the interpretation of Thai Law. The other thing to bear in mind, I am not a Thai Attorney, I am an American Attorney. I have Thai nationality; I am the Managing Director of this firm but I'm not a Thai attorney. I'm not licensed to practice before the bar of the Kingdom of Thailand. We do have Thai Attorneys here in our office and they and I reviewed sort of all of this information and nothing really wrong with my analysis here, at least as far as they were concerned, but it is being provided for educational purposes only. This is not a definitive legal opinion. Everyone's circumstantial situation is going to change the sort of legal analysis of their specific case so bear that in mind. That said, use of the term "nominee" in this context, I really wanted to parse this out because people need to understand that you can get into problems for being a nominee in Thailand and also it's quite nuanced exactly what a nominee is. So quoting from section 36: "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 list annexed hereto where such a foreigner is not permitted to operate that business or who operates the business jointly with a foreigner in a manner holding it out is the former's soul 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, of 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 3 years or to a fine of 100,000 Baht to 1 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 the shareholding or partnership, as the case may be. In the case of violation of the order of the court, the violator will be liable to a fine at a daily rate of 10,000 Baht to 50,000 Baht throughout the period of the violation."

So what to take away from that? Well Nominee is not a clear-cut thing and it's been my experience that it's pretty clear to me that yeah there are nominees where it's just like you found some random person, you put them on the company with X shareholding, you never saw them again. Yeah that is as clear cut as it gets, that's a nominee. But what about if it is somebody working with you or you are operating a company jointly with somebody and it's a legitimate thing, you have a legitimate Thai partner, you just happen to have 49% of Company. I think that is fine generally speaking as long as, again it is going to be circumstantially dependent. It's kind of one of those things, to paraphrase I think it was Oliver Wendell Holmes when he was talking about obscenity he said: "I don't know what "obscenity" is but I will know it when I see it. You could probably say the same thing about a "nominee shareholder". I don't know what a nominee shareholder is but I know it when I see it. 

I have seen many corporate structures set up over the years where you have a Thai at 51% or more and a foreigner and they are both actively engaged in the business, I don't think that's in violation of the Foreign Business Act at all. That being said, after reading that in the Bangkok Post, I just wanted to be clear, yeah nominee companies in Thailand are still illegal per the Foreign Business Act of 1999.