Nominee ownership under watch


Bangkok Post | 25 August 2009


The Lands Department has joined the Business Development Department in checking the shareholding structures of companies suspected of holding land plots and having exceeded the foreign shareholding limit, according to Anuwat Maytheewibulwut, the Lands Department's director-general.

By law, a company that owns land must not have foreign nationals holding more than 49% of its shares.

"We (the two departments) check them annually in June," he said. "If we find anything unusual, we will ask the department to check the changes in its shareholding structure."

If the investigation reveals that the firm holding the land have an illegal shareholding structure, the Lands Department will ask it to transfer the plots within 180 to 365 days.

Recently, the Lands Department found a company in Phuket whose foreign ownership exceeded the legal limit.

The firm had formerly registered with a legal ownership - with foreigners holding a 49% stake and Thais the balance. However, it later increased its capital, with foreign nationals taking up all new shares, making it ineligible to own land. After the department learned about this case, it took action to have the firm transfer the land it owned.

Over the past five years, the department forced companies whose foreign ownerships exceed the legal limit to transfer 28 plots, said Mr Anuwat.

To prevent further incidents, all lands offices nationwide are told to check every new transaction or registration, a tall order given the more than 31 million plots in the country, he said.

"Whenever we learn about it or get information from other agencies or court orders, we will check it out. The government already notified us on the issue of illegal shareholding by foreigners. We're ready to handle this issue," the director-general added.

Patima Jeerapaet, chairman of the property committee of the Joint Foreign Chambers of Commerce in Thailand (JFCCT), suggested the government establish a new agency or upgrade the current ones to promote agricultural investment legally, the same way the Board of Investment was set up to promote industrial investment.

"Let's attract them [foreign investors] to do it within the proper legal framework," he said. "It's not disastrous that they enter to invest but they should do it right and legally. The thing is, do they know our laws?"

Mr Patima said trying to block overseas investment in Thai agricultural land, especially from the Middle East where food supplies were scarce, was next to impossible. "I was approached by Thai landlords asking me to seek foreign investors to buy their farm land," said Mr Patima, who is also the managing director of Colliers International Thailand.

"They said they had 5,000 rai of farm land to sell. They hope to get good prices from foreign buyers. How can we or the government prevent this?"

In his view, Thais will stand to gain from more jobs and higher incomes if overseas investors are allowed to invest in farm land. They can also learn new technology from foreigners.
Original source: Bangkok Post

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