@Nigel *******

before the Thai becomes a director and shareholder of the company you will have already prepared the company shares to be issued in terms of A and B shares or preference and ordinary shares which would give him minority voting rights.

@Nigel *******

but why would the Thai make a problem. He would have signed up to be a nominee because you are prepared to pay him a monthly salary. He's not going to do it for free. So to be a nominee he's getting money for nothing. That's the deal. You find a Thai and say I need you to be a majority shareholder of our company. Sign these papers which will make you a director and I'll give you money every month. The Thai shareholder won't play any active part in the running of the company.

@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.