@Nigel *******

the idea is that if the Thai shareholder decided he didn't want to renew the 30-year leases, the foreign company shareholder would vote against that because the foreign owners obviously wouldn't agree not to renew their own leases.

@Nigel *******

however as I said in a previous comment it is perfectly legal for an offshore company to be a shareholder of a Thai company which counts as one foreign juristic entity no matter how many foreign shareholders there are of the offshore company. You can structure it so that the voting rights of the foreign company are greater than the voting rights of the Thai shareholder therefore out voting the Thai shareholder at board level. I've been involved in such structures with gated communities.

@Nigel *******

that is essentially correct.

@Nigel *******

obviously it is the Thai who is the majority shareholder.

@Todd ********

the wise ones would have been compensated by getting substantial rental income from the property over the years since most owners I know don't live here full time. The rental market has had its good times and bad times.

@Todd ********

as you know there are many laws on the books but they're not necessarily enforced. I think it's highly unlikely the government would invalidate every property structure that uses Thai nominees and thereby completely destroy the property market for foreign buyers. It's not going to happen.

But there is a downside. I know of foreign buyers who purchased very expensive ocean view properties 20 years ago who cannot renew their lease and therefore cannot even sell the property because nobody is interested in buying a property with only 10 years remaining on the lease. So it's gone.

@Rick **********

I'm a bit out of touch with this business now so I don't recall that case, but it is definitely designed to circumvent the rule on leases. There's no doubt about it, but the question is will they really do anything about it. There's so much capital investment tied up in properties in Phuket. I can't imagine they're about to exact a wholesale disruption of that market.

@Todd ********

it's not irrelevant if the Thai nominee shareholder in order to finance his purchase of the company shareholding is given the money to do so in a brown envelope. I have seen this enacted by people with the deepest understanding of the legal system and fiduciary duty to their clients at risk of losing their hard-earned career. Having a nice office with your lawyer sign outside doesn't mean you're not a dodgy lawyer. And there are many. Let's just say we don't have the same standards here as you may have in your country.

@David *********

it is not illegal in Thailand for a company to hold land as its sole business purpose. The question is whether the company structure is legitimate or not.

@Jarek ***********

you are correct. The same goes for renewable 30-year leases. While they are not illegal they are not enforceable under Thai law. I used to be very involved with this and I had a direct meeting with the head of the Phuket land office through our legal team to once and for all interpret the exact Thai wording and its translation. And what emerged from this was very clear. You have the option to renew a 30 year lease but not the right even if you have made another lease for the future backed up by a contract and some money, if the landowner doesn't want to renew the lease regardless of any other agreement, it is his right not to renew. End of story.