Elite Card promotion raises major legal issues
Interim plan for land ownership may be at odds with the Kingdoms existing foreign business regulationsThe government's introduction of the Elite Card campaign has caught the attention of many foreign residents.
Purchasers of the card are granted a broad range of benefits and legal privileges, the most noteworthy of which is the right to "own" land.
The Thai Elite programme is a member club managed by Thailand Privilege Card Co, Ltd (TPC), a wholly owned subsidiary of the Tourism Authority of Thailand (TAT).
Card membership costs US$25,000 (Bt970,000) for personal membership and $50,000 for corporate membership.
There are a wide range of privileges available to members under the plan including:
A five-year special entry visa allowing the cardholder to stay continuously in Thailand for 90 days (extendable)
Access to the 24-hour Members Consultant Centre, featuring advisory services in seven languages
Access to VIP Fast Track Thai Immigration and VIP lounges
The right to acquire and possess land (subject to TPC policies and conditions)
Club membership is only available to qualifying parties.
The following are the qualifications for personal membership. The applicant must:
Not be a Thai citizen
Not a hold a permanent residence certificate
Not have been declared bankrupt
not have been sentenced to a term of imprisonment of more than six months (irrespective of whether or not the applicant was actually imprisoned)
Not have been declared a person unsound of mind, incompetent or quasi incompetent
Be allowed to stay in Thailand in accordance with the immigration laws or any related laws of Thailand
The following are the qualifications for corporate membership. The corporate applicant must:
Be a juristic person duly incorporated and validly existing under the laws of the country of incorporation of the applicant
Have full power and authority to apply for and maintain the membership of the Thailand Elite
Not have be adjudicated bankrupt
Not have as designee a person who has been sentenced to a term of imprisonment of more than six years whether or not he/she has been imprisoned
Have as designee a person who is allowed to stay in Thailand in accordance with the immigration laws or any related laws of Thailand
Not have as designee a Thai citizen
Not have as designee a foreigner holding a permanent residence certificate
The privilege of being able to "acquire and possess land" gives rise to some legal issues.Generally, foreign individuals and companies are not allowed to own any interest in land, subject to limited exceptions such as those granted by the Board of Investment.
The above privilege seeks to create a broad exception to this general rule available to all cardholders.
TPC states that after becoming a member, the cardholder has "the right to acquire and possess land (subject to TPC policies and conditions)".
TPC describes this privilege right as the "equivalent or close to an ownership right".
The uncertainty associated with this privilege stems from the fact that laws supporting this privilege have yet to be passed by the legislature. This means that no exception granting cardholders the right to own land has yet been made into law.
Also, no specific time frame has been set forth by the government as to when this legislation is to be enacted.
In the interim, TPC has set forth an ownership structure to be used by Cardholders seeking to purchase land.
TPC has stated that it will "consider to buy land designated by the card holder and at the expense of the member and make arrangements with the member so that the member has full rights to use the land until the land privilege is allowed by law.
In the connection [TPC] shall be entitled to ownership of such land".
Accordingly, until such time as the legislation is enacted, TPC has agreed to hold the title to the land on behalf of the cardholder. TPC will allow the cardholder access and use of the land during this period.
The issue is whether this interim ownership structure is consistent with the current legal restrictions associated with land ownership by foreigners.
The Alien Business Operations Act (1999) sets forth specific penalties for Thai parties who hold ownership rights and on foreigners who cause Thai parties to hold ownership rights in companies for the purpose of avoiding legal restrictions.
As mentioned previously, the general rule is that foreign individuals and companies are not allowed to own any interest in land.
As stated under the structure proposed, TPC would hold title of the land on behalf of the foreign cardholder for the purpose of avoiding legal restrictions. It could be argued that the proposed structure is in conflict with the Alien Business Operations Act.
What makes this situation even more serious are the applicable penalties for violating this provision of the act.
The act prescribes fines of up to Bt1 million and/or imprisonment of up to three years for violators.Until such time as the appropriate legislation is enacted, there will be uncertainty associated with whether these restrictions and penalties are applicable to cardholders under this scheme.
Michael Doyle
Michael Doyle is a partner of the Bangkok law firm of Seri Manop and Doyle Ltd Tax and Legal Counsellors and may be reached at
michael@serimanop.com.
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Гость » 05 апр 2008, 08:01 
