BANGKOK: Thailand’s crackdown on nominee structures used to hold property on behalf of foreign interests is creating new pressure on the luxury housing and condominium markets, as authorities intensify checks on ownership arrangements in the real estate sector.
The issue gained attention after officials investigated the purchase of 33 luxury houses worth more than 1.27 billion baht (US$39mil) in the Pattanakarn and Krungthep Kreetha areas of Bangkok.
The purchases were linked to a network allegedly using more than 33 companies as fronts, with Thai nationals acting as nominee shareholders to hold ownership of luxury homes across several projects.
Real estate sources said the practice is not a new development, but enforcement has become more active as authorities increase scrutiny of ownership structures and financial transactions.
Sources said one commonly used method involves establishing companies with 51% Thai ownership and 49% foreign ownership under the Foreign Business Act BE 2542 and civil and commercial laws.
The structure was originally intended to support foreign investment, particularly in industrial businesses after the 1997 economic crisis.
However, sources said it has also been used in some cases as a channel for foreign nationals to acquire houses, land and other property through companies where Thai shareholders hold shares only nominally.
“Laws were intended to promote investment in manufacturing, but they are now being used to buy houses, land and hold property instead,” a source said.
Sources said among methods include setting up companies to purchase property, using accounting firms or legal offices to manage arrangements, and spreading ownership across companies. — The Nation/ANN
