Vol. 8 No. 2 ! 1 - 15 October 2008
Ministry clarifies land acquisition issues What might trigger an investigation The authorities nationally have clarified the rules for acquisition of land (Interior Ministry Notification 2006). The regulations ordered land officials to investigate, upon registration of a land acquisition, the source of funds
- A foreigner is a promoter, shareholder, director or authorised person of a Thai entity. - A foreigner holds preferential shares with a majority of the voting rights in a Thai entity.
of a Thai shareholder of a domestic entity if i) a foreigner is involved and ii) the land is being acquired for real estate development. The Interior Ministry’s notification 2008 provides new grounds for land officials to consider. The following circumstances will trigger an investigation:
- The major Thai shareholder is not in the business of investment or any other related occupation. 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.
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