Legal Corner

The following circumstances will trigger an investigation:

- A foreigner holds preferential shares with a majority of the voting rights in a Thai entity.

- The major Thai shareholder is not in the business of investment or any other related occupations.

The land officials shall investigate the occupation and income of the Thai shareholders and the sources of their funds.

The land officials may request the submission of an employment certificate, bank statement, loan agreement, land sale and purchase agreement (if money was acquired from a land sale), evidence of an entitlement to an estate or any other acceptable form of evidence. Both notifications empower land officials to investigate the sources of funds of Thai entities acquiring land if the price of the land is higher than the amount of registered capital of the Thai entity and where there is no mortgage on the land created as collateral over the land. If money has been borrowed from a Thai lender, a loan agreement, balance sheet, evidence showing the withdrawal of money, the board resolution of both the borrower and the lender can be requested. If the lender is a foreigner, evidence showing remittance of funds from overseas is needed.

Thai shareholders of Thai entities should know that land officials are duty bound to conduct an investigation on land acquisitions if a foreigner is involved in the transaction. To speed up land registration, Thai shareholders and entities should ensure that all necessary documentary evidence, as discussed above, is in order.