Checks on foreign business tie-ups in Phuket
Checks on foreign business tie-ups in Phuket
PHUKET: — A fact-finding effort is underway in Phuket to compile information about local businesses in which Thai people are hired by foreigners as their nominees – a practice considered suspicious and possibly illegal.
Provincial governor Wichai Phrai-sa-ngob, who ordered the investigation, said he was not discriminating against foreign investors, but guarding against illegal nomination which exploited loopholes in Thai laws for personal gain.
Under the business nomination law, foreigners can hold no more than 49-per-cent ownership of any business they jointly invest in with Thais. An ongoing practice is that foreigners later gain control over Thais illegally, and enjoy a lower tax burden than when holding a minority ownership.
To scrutinise foreign businesses, the local revenue office is checking on their tax payments, while the treasury office is scrutinising ownership of condominium space. Immigration police are checking visa and residence status.
Local authorities and the Interior Ministry will look into all information and decide on what to do if the fact-finding reveals illegal business nomination activities, said the governor.
There are now 19,653 joint Thai-foreign businesses in Phuket, which have invested around Bt62 million.
Patong Municipality mayor Chairat Sukbhal dismissed reports most hotels on the island resort were owned by foreigners, saying most were operated as joint ventures, or under management staffed by foreign executives.
The provincial business and trade office said a regulation requiring joint Thai-foreign businesses to produce bank accounts with a high minimum amount of money deposited had been revoked, because it could not effectively serve as proof of substantial business funding.
“In most cases, the money was withdrawn immediately from bank accounts once they were offered to Thai authorities as proof,” office head Weerachai Tantiwatthanawallop said.
The provincial land office said legal action would be taken against any businesses found to have been operated illegally with a majority of foreign ownership, because Thai land laws imposed strict sanctions on foreigners owning land plots in Thailand.
Don’t Be Unfair to Phuket Expats, Thais Are Told
SUPPORT for overseas investment on Phuket came from an unexpected source today . . . a leader of the powerful Internal Security Operations Command, which has the Prime Minister as chief commanding officer.
And he added that it was time to stop the finger-pointing.
Thais were more likely to be cheating the system than expats, he said.
Investors from Britain, Hong Kong, Australia, the US, Germany and Sweden represent the overseas countries with the largest stakeholds in Phuket, Phuketwan was told today.
All up, 107 countries have some kind of investment on the island.
The statistics come from Rear Admiral Amornchot Sujirat, the local deputy in charge of the Army’s Internal Security Operations Command and a board member of the Kata Beach Resort.
Overseas money has gone into tourism, real estate, resorts, condominiums, construction, restaurants and tour companies, he said.
Out of the total investment of 62,503 million baht, the rear admiral said, Thai investment totalled 53,000 million and overseas investment consisted of 9,000 million.
British investment led the way, at 1284 million.
”There is no problem with nominees taking control,” Rear Admiral Amornchot said. ”My advice to Thais would be not to keep pointing their fingers at farang,” he said.
”Overseas investors are overwhelmingly legitimate in what they do here. It is the Thais who tend to try more often to bend the law to suit their own ends.”
His comments follow release of a report sponsored by the Thailand Research Foundation that raises concerns about levels of expat ”control” of Phuket property, especially by the beach.
Much of the controversy flowed after a page one lead heading in the Bangkok Post that said: ‘Foreigners own 90 pc of Phuket beachfront.’
The headline was rejected as wrong by the researchers. The document says nothing of the kind.
Investigations by Phuketwan have shown the concerns of the researchers are probably unfounded. Some segments of the media, though, prefer to promote paranoia.
The release of the report comes by coincidence at the same time as an update on a nationwide investigation by the Department of Special Investigation into 61 cases involving property, 16 on Phuket.
DSI investigations have been underway for years. Most of the cases concern Thai owners.
The President of the Phuket Professional Guide Association, Panomphol Thummachartniyom, told Phuketwan today that what Phuket needed most was broader targetted marketing of tourists.
Koreans especially visited only Korean-owned restaurants, resorts and tour operators, and as a result most of the money went back to Korea, he said.