Thailand currently has no inheritance tax.  However, some politicians, including Finance Minister Korn Chatikavanij, have been pushing for just such a tax.

Appointed in December 2009, Chatikavanij implemented many policies to rebound from the global economic recession, among which the issue of inheritance tax was high on his agenda.  By June 2009, however, he had stopped pushing for inheritance tax, saying “there was no reason to implement the tax at the current time”.    Instead he claimed that property and land tax were more pressing considerations.

Persons in Thailand with relatives abroad are often concerned about the possible effects of Thailand’s inheritance law on their estate planning as questions of inheritance tax law can often become a consideration in drafting a Thailand Last Will and Testament.

Now that Chatikavanji has been in office for a year, he is once again reviving the issue of inheritance tax.  In a recent interview published by The Nation, Chatikavanji says that him and the Prime Minister are “very serious about this issue” and plans to propose inheritance tax to the Cabinet for consideration within the next two months.

Related Topics:  Thailand Will and Estate Planning

Every morning on my way to the office I pass a mammoth building site, its steel and concrete beams and platforms gleaming in the tropical sun. After construction ceased 2 years ago the building site has sat idly like a giant dinosaur skeleton supremely indifferent to the forces of time and human activity around it. 
 
The Regent residences on Sukhumvit Soi 13 was planned as 2 towers occupying half a city block .  The firest tower would house the Regent hotel and the other tower would contain luxury condominiums.  The pedigree of the project was ideal.   Sukhumvit soi 13 is centrally located, near the BTS and subway, close to shopping and in an area that was being gentrified Thai style with numerous other ambitious real estate projects  going up in the same area.  The  projects was one of many being financed by the Lehman Brother who were bullish on expansion in Southeast Asia real estate market..  Then came the crash.
 
There are all kinds of people and parties with different angles involved in this fiasco. There are the individual investors who paid a big down payment for a glorious condominium unit that never materialized.   The are the investors in the sister project across the street, The Trendy, some of whom bought retail store fronts expecting big pedestrian traffic from the denizens of the Regent6.  Their shops sit empty and forlorn.  There are the vulture capitalists circling the project looking for undervalued assets. Then there are institutional investors like Lehman Brothers and the project owners, Grande asset PLC.  Finally there are the lawyers and the courts.
 
Many investors have experienced puzzlement and exasperation with the stalled project and speculation abounds.  According to a posting oin the Skyscrapercity website, Grande Asset, the developer Company gave it clearest in a submission of its financial status to the Stock Exchange of Thailand lat year:   Selected sections of the report read as follows:
 
“Note: At this time, the Company is unable to state the anticipated completion dates with a higher degree of specificity. These completion dates are contingent upon the Company’s ability to complete negotiations with the bankruptcy liquidator of the estate of the debenture purchaser,and also the Company’s ability to source replacement financing, and therefore do not constitute forward looking statements and should not be relied upon for the purpose of making investment decisions.
 
As was previously disclosed to the SET, the Company filed a complaint against LBCCA for breach of contract due to LBCCA’s failure to honor its obligations under the Subscription Agreement. LBCCA,though its court appointed liquidator, filed an answer to our complaint in which it substantially denied the claims set forth in the Company’s complaint.Subsequent to the filing of the afore-mentioned complaint,the Company filed an amendment with the court seeking to increase its damages claim from approximately Bht.2.6 billion to approximately Bht.6.1 billion due to LBCCA’s continuing beach and the consequent damages this breach has caused to the Company…
 
Contemporaneous with this effort,the Company is also in negotiations with various financial institutions to participate in a restructuring of its outstanding debt obligations and to raise new construction financing to replace that which was disrupted by the bankruptcy of the purchaser of the debentures. The Company hopes to complete a restructuring of its debt obligations within the end of first quarter 2010.”
 
So there you have it, the whole project is tied up in litigation and everyone is going to have to sit tight until Lehman Brother, the Courts, the other creditors, and Grande Asset work out who owes who what.  New Vulture capitalists have limited opportunities because the existing creditors hold stakes in the project and re-structuring will be the first priority.  The wheels of justice turn slowly.

In the midst of a registration drive on behalf of the Thai government and the Myanmar junta, few migrant workers are actually turning out to register.  Thailand Law Forum writer Jonathan Fox took a trip to Mae Sot in Thailand’s Tak province to explore why people are not registering with the Thai government and to get a deeper understanding of the reality of the lives of Burmese migrant workers.  Read the full article:  Burmese Migrants in Thailand. 

Sex Laws in Thailand Part II: Laws Regulating Commercial Sex and Entertainment Places has recently been published on the Thailand Law Forum.  This article is the second part of a series exploring Thailand’s sex crime laws:  the first article explored the United States’ laws that assist in prosecuting their own citizens involved in illegal sexual activity in other countries, particularly Thailand.  Sex Laws in Thailand Part II looks at Thailand’s national laws, particularly those that regulate bathhouses, massage parlors and saunas.  Part III will be published in the new year, exploring the role of civil society and non-government organizations in locating and prosecuting foreigners engaged in illegal sexual activities in Thailand. 

Thomas Schmid’s Foreign Investigators: Crime Fiction in a Thai Setting has been published on the Thailand Law Forum, an article exploring both Western writers’ and film-makers’ use of Thailand as the setting for their foreign sleuths.

Also recently released on the site is Chaninat & Leeds’ translation of the sex change law in Thailand, officially known as the Regulation of the Medical Council Concerning Ethics in the Medical Profession Rules for Treatment in Sex Change Operations of 2552 B.E. (2009 A.D.).

Related Documents: Guidelines for Sex Change Operations in Thailand

Chaninat & Leeds has just released its English translation of the Child Adoption Act of B.E. 2522, complete with the original Thai language version as well as the Ministerial Regulation No. 9 of B.E. 2543; copies of the government issued applications for child adoption are also included.  This publication will prove to be helpful for anyone interested in adopting children in Thailand, or for those organizations working on child adoption in the country.  The Child Adoption Act will be available for purchase at local bookstores in Thailand.

Any stroll through the vendors at the vast open air Chatuchak weekend market in Bangkok will reveal all sorts of oddities—among the more perplexing of which is the open display of ivory, both carved items and raw tusks.   The open sale of ivory throughout Thailand can easy make one wonder: “doesn’t Thailand have prohibitions against the sale of ivory?”

National Regulations

Thailand has legislation to protect wild Asian elephants.  The Wild Animal Reservation and Protection Act of 1992  (WARPA) prohibits the killing and capture of wild elephants and also makes internal trade of wild elephants and their ivory (including those from international sources) illegal.

Thailand also has, however, a long history of domesticating elephants; in the past, elephants were used in the logging industry, but after logging was banned in the late 1980s, elephants have been a cornerstone of the Thai tourism industry.  There are also a significant number of non-employed domesticated elephants.

Domesticated elephants are regulated under the Thai Draught Animal Act of 1939, along with other animals such as water buffalo.  This legislation does not ban the trade of domesticated elephants, nor the possession or sale of ivory that originates from these animals.  The Thai government does not require ivory that is pruned from domestic elephants to be registered, making it difficult to distinguish between legal ivory and ivory that is imported illegally from African countries.

Illegal Ivory Trade

In late August this year, officials at Suvarnabhumi International Airport in Bangkok announced the seizure of 2, 000 kilos of ivory—316 pieces of tusks—originating from Kenya and Uganda, estimated to be worth around 50 million baht.  Illegal shipments such as these supply the majority of ivory to Thai craftsmen.  The carved and worked ivory is then sold within Thailand to Thais and tourists and also exported to international buyers.
 
The selling of ivory in markets in Thailand is difficult to regulate.  Under the WARPA the possession of illegally imported wildlife, including ivory, is not illegal; only the person responsible for illegal import/export/re-export can be held culpable.  Many ivory sellers in Thailand can simply claim to be selling Thai domestic, legally harvested ivory, and will even show potential buyers photographs of contended, domesticated Thai elephants with pruned tusks.

The Thai government acknowledges the difficulty with the WARPA and has stated its intention to revise this legislation to address these loopholes.

Trade of Live Elephants

The trading of live elephants further complicates the illegal ivory trade.  It is legal to sell domesticated elephants in Thailand and existing legislation only regulates animal registration and the movement of animals if there has been a change of districts.  A domestic elephant is not required to be registered until it has reached 8 years old.

Elephants are then captured from the wild and sold to elephant camps as part of the tourist industry.  Myanmar is a source country for live elephants, with Myanmar border guards admitting to taking bribe money to allow the smuggling of live elephants to be placed in tourist resorts.  Captured elephants presented as domesticated animals provide a source for legal elephant ivory, even though the ivory comes from highly endangered wild-caught elephants.

Hope for the Asian Elephant?

According to TRAFFIC, a wildlife trade monitoring organization, Thailand is “one of the world’s top five countries most heavily implicated in the illicit ivory trade, but shows little sign of addressing outstanding issues”.

Thailand is party to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), an international convention that effectively constitutes a ban on all ivory products, except under exceptional circumstances.  Thailand has submitted reports to CITES Committee and has reported limited progress in implementing its commitment to regulate the ivory trade.

Regulating and overseeing a comprehensive registration system of domestic elephants and their ivory products would be a significant step Thailand can make toward protecting both the highly endangered Asian and African elephant.

“Sex Laws in Thailand; US Sex Crimes Abroad; the Long Arm of Uncle Sam” is the first part in a series being published by the Thailand Law Forum analyzing the role of governments, both internationally and in the Thai context, in prosecuting those that violate sex crime laws.  This first part in the series specifically looks at the US Protect Act and its broad scope controlling various illegal sexual and pornographic activities outside of its borders.  Part Two of Sex Laws in Thailand will explore Thailand’s domestic laws against sex crimes. 
Also, Thailand Law Forum has published various Thailand Extradition Treaties, including those between Thailand and Bangladesh, China, Philippines and Indonesia.  The Extradition Treaty between Thailand and the United States is included as well, which recently made news after the Viktor Bout extradition request from the US was denied by the Thai government. 

Related Documents: Sex Laws in Thailand Part 1: US Sex Laws Abroad: The Long Arm of Uncle Sam

A new English translation of the Thailand Land Code, as amended in 2008, has been compiled, translated and published by Chaninat & Leeds, an American law firm in Bangkok.  The Land Code translation includes the regulations prescribing the rules surrounding land acquisition for residence by foreigners.  It is a necessary addition for any individual or organization interested in Thailand land law and land acquisition in Thailand.  The Land Code translation will be available for purchase through Amazon.com and local book stores in Thailand.

A foreign client wants to start a business in Thailand but he has no Thai partner. What will he do? 

Two interesting items appeared in last week’s news. The first was regarding a pending investigation of agricultural land for rice farming purchase by an investor from the Middle East (Foreigners Unlawfully Owning Rice Farms). The second was a similar story about non-Thais purchasing land in Phuket.

Both of these cases were generating interest because the land was apparently purchased through “Thai nominee companies”. A Thai nominee company is a company with majority Thai shareholders on record, but in actuality the company is fully or mostly owned by non-Thais, an illegal practice under Thai law. Another famous case led to the downfall of former Prime Minister Thaksin: the sale of Shin Corporation to a Singaporean entity.

Make no mistake: these are not parking violations. The laws against the use of Thai nominee shareholders are criminal laws, with substantial prison time and hefty fines. 

As a law firm in Bangkok that handles company registration, corporate and real estate law, we are often approached by potential clients who ask us to provide them with Thai nominees so that they may register as a Thai majority company, a service we are not willing to perform. 

There are a number of “legal service firms,” however, that will provide Thai nominees. They may inform a client that the use of Thai nominees won’t be a problem for any of the following reasons: a) they have a special method or loophole to get around the law; b) they use Thai nominees who are already dead or randomly picked from the phonebook; c) the law firm has multiple Thai holding companies that will invest in the client’s new Thai company and since they are “holding companies” the process is legal. The firm will completely ignore the legal ramifications and quote prices for their nominee services.

As these recent stories indicate, the Thai government does enforce its laws against the use of nominee companies and nominee shareholders. One can safely assume that for every story that makes it into the news there are dozens of others that are unknown.

Consider this situation: a company director gets arrested for using a nominee company with Thai nominee shareholders, who then implicates the law firm whose services he hired. The investigators contact the law firm and determine that the nominee shareholders are employees of the firm. Would the investigation end there or would they investigate every other company that lists these same nominee shareholders?