One as yet unnamed Phuket property company is expected to face further investigations by Thailand’s Department of Special Investigation for allegedly breaking the Foreign Business Act by allowing Thai nominees hold a majority stake in the company.
Speaking to the media Pongpun Gearaviriyapun, Director General of the Business Development Department, said foreigners are forbidden from owning more than 50 percent of such companies.
The company was discovered, along with three others in the tourism sector, following investigations into more than 80 companies on the island.
The Commerce Ministry has said it will next be checking for such cases in Chiang Mai.
If found to have breached the criminal law, offenders – both foreigners and local nominees – could face fines of between THB 100,000 and THB 1 million and/or up to three years in prison. A company could also be fined between THB 10,000 and THB 50,000 per day until it rectifies its shareholding structure to comply with to the law.
Under Thailand’s Foreign Business Act 1999, the Kingdom of Thailand does not permit foreigners to hold more than 50 percent of shares in some types of businesses that include property development. It is a commonly known fact that many foreigners have used Thai nationals as nominees to run such businesses.
This investigation into foreign property development in Thailand comes within the same month that Vietnam has relaxed its foreign ownership laws. This week the government in Indonesia announced it will also be allowing foreign ownership of property in the luxury sector, although no further details were given.