Will my land ownership be affected?
I note there may be some concern among members who have purchased land in Thailand using the so-called "Thai majority owned, foreign controlled" company structure and that they may feel a little uneasy at this time given the proposed amendments to the Foreign Business Act ("FBA") - especially the changes to the definition of "foreigner" thereunder.
As I understand this:
- the amendment to the definition of the term "foreigner" is as is applied under the FBA
- the definition of the term "foreigner" as is applied under the Land Code will not change
- in order to be caught by the new definition of the term "foreigner" under the FBA, your company needs to be participating within one of the restricted businesses under Annexes One, Two or Three of the FBA
- if your company is not active in a business that is restricted under Annexes One, Two or Three of the FBA, the amendments will have no affect on you (as you will still be governed by the definition of the term "foreigner" under the Land Code, which makes no mention to preference share structures or voting rights and only looks to the share capital of the company)
Assuming my understanding is correct (and I may well be wrong), now would be the time to look at the objectives of your company to ensure that you do not participate in a restricted business under Annexes One, Two or Three of the FBA. If that's the case, these changes should have no bearing on the company structure owning the land (i.e., whether or not it is a preference share company). If your company is doing business (as per its objectives) within an Annex One, Two or Three area, now would be the time to change your company objectives (so that the company is no longer doing one of these businesses) so that by the time the new changes come into force (if ever), you will not be caught by the new changes under the FBA.
Anyone out there disagree with this summary?