Source: Land Department May 23 2006
Referring to the guidelines of land ownership set up jointly by the Land Bureau and the Ministry of Interior for legal entity which has foreign ownership:
There upon, the Ministry of Interior was reported that there have been foreigners working with Thais or had commissioned the Thais to set up corporation to do property trading by initially buying land and house for the purpose of making it a home or office and subsequently apply to change the usage to for sale or sub-divide and sale to foreigners which constitutes a breach of law.
For the purpose of preempting any actions which may circumvent the laws or as to prevent the purchase of land which may benefit foreigners under the Land Act 74, second paragraph, the Ministry foresees that an additional practice should be applied in the event that a company limited, limited partnership or partnership which has already been set up and apply to own land for the objective of doing business in real estate (except public company limited or other legal entities which were permitted to own land under other applicable laws such section 27 of Board of Investment Act B.E 2527, Section 44 of the Industrial Act B.E. 2522 or property fund, commercial bank, banks set up under special law, finance company, security firms, life and non-life insurance companies).
If it is appears that the company is having foreigner as shareholder or Director or if there is a reason to believe that it is nominating the Thais to hold shares for the foreigners, the officer is to investigate income of every Thai shareholders in the legal entity by looking into their work history of what kind of work they have done and what monthly salary they earned, all of these proved by evidence.
If the purchased is funded by loan, then loan evidence must be provided. If after the investigation, it is led to believe that the application for land ownership is circumventing the law or any individual is purchasing land to the benefit of foreigners under the Land Act 74, paragraph 2, the officer is to investigate the case in detail and report to the Land Bureau to be waiting for further advise from the Minister.
The above is advised for your information and to issue orders to officers to carry out their duties.
Your sincerely Deputy Permanent Director Ministry of Interior.
Dated 23/5/2006
Signed
Chief Administration
Chief Land officer
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Source: VERY URGENT Ministry of Interior
No. Mor.Thor. 0515/Vor Asadang Road, Bangkok 10200
21st July 2006
Subject: Acquisition of Land by Juristic Persons with Foreign Shareholders
Attention: All Provincial Governors
Reference: Letter of the Ministry of Interior, Very Urgent No. Mor.Thor.0515/Vor.1562 dated 15th May 2006
Enclosure: 3 sets of examples of Investigation
The Ministry of Interior deems appropriate to set forth the standard practice in order that all investigations will be conducted in the same way with the following additional practical guidance:
1) The practical guidance in the letter referred above shall be applicable to juristic persons (companies and partnerships) applying for acquisition of land with the objective to carry out a real estate business, i.e., buy, sale, rent of land, operation of hotel and resort.
2) The evidence for the investigation of each Thai shareholder on the occupation and monthly income will be a letter from a working entity certifying a position with employment period and monthly salary or other reliable evidence. The investigation will be furthermore on the source of money for the shareholder to buy shares which may come from savings, sale of land, inheritance or loan by showing the evidence, e.g., bank book, agreement to sell the land, evidence showing the inheritance or loan.
3) In case any shareholder is a juristic person with a Thai nationality (even the aforesaid juristic person has not any foreign shareholder or director), the investigation must be made on the source of money to buy shares by investigating the representative of the juristic person to ascertain the source of money by showing evidence which is a balance sheet. If the money to buy shares was borrowed from other person, the evidence being a loan agreement and minutes of meeting involved with the aforesaid matter must be produced.
4) In case a juristic person purchases the land with the price higher than the registered capital, for instance, the company has the registered capital of 500,000 baht but the company purchase the land for the price of 10,000,000 baht without mortgage, the investigation must be made to ascertain the source of money by showing the evidence. If the money was borrowed, minutes of meeting involved with the aforesaid matter with a loan agreement and the following related documents will be required :
4.1) If the loan is from a foreigner or foreign juristic person, the evidence showing the source of money, e.g., the evidence showing that the money is remitted from overseas or withdrawal slip of money from a bank account with minutes of meeting of the juristic person who is the lender.
4.2) If the loan is from a Thai individual or juristic person (even the aforesaid juristic person has not any foreign shareholder or director), the evidence proving the source of money, e.g., balance sheet, withdrawal slip of money from bank account with minutes of meeting of the juristic person who is the lender must be produced.
You are hereby informed for your further compliance with the examples of the investigation report for your practice.
Sincerely yours,
Mr. Suraat Thongniramol
Deputy Permanent Secretary of Ministry of Interior
Chief of Internal Security Group
Land purchase by Thai nominee land owner
