PHUKET: -- A fact-finding effort is underway in Phuket to compile information about local businesses in which Thai people are hired by foreigners as their nominees - a practice considered suspicious and possibly illegal.
Provincial governor Wichai Phrai-sa-ngob, who ordered the investigation, said he was not discriminating against foreign investors, but guarding against illegal nomination which exploited loopholes in Thai laws for personal gain.
Under the business nomination law, foreigners can hold no more than 49-per-cent ownership of any business they jointly invest in with Thais. An ongoing practice is that foreigners later gain control over Thais illegally, and enjoy a lower tax burden than when holding a minority ownership.
To scrutinise foreign businesses, the local revenue office is checking on their tax payments, while the treasury office is scrutinising ownership of condominium space. Immigration police are checking visa and residence status.
Local authorities and the Interior Ministry will look into all information and decide on what to do if the fact-finding reveals illegal business nomination activities, said the governor.
There are now 19,653 joint Thai-foreign businesses in Phuket, which have invested around Bt62 million.
Patong Municipality mayor Chairat Sukbhal dismissed reports most hotels on the island resort were owned by foreigners, saying most were operated as joint ventures, or under management staffed by foreign executives.
The provincial business and trade office said a regulation requiring joint Thai-foreign businesses to produce bank accounts with a high minimum amount of money deposited had been revoked, because it could not effectively serve as proof of substantial business funding.
"In most cases, the money was withdrawn immediately from bank accounts once they were offered to Thai authorities as proof," office head Weerachai Tantiwatthanawallop said.
The provincial land office said legal action would be taken against any businesses found to have been operated illegally with a majority of foreign ownership, because Thai land laws imposed strict sanctions on foreigners owning land plots in Thailand.
-- The Nation 2009-09-02
