Land Office moves to allay property bust fears

PHUKET: The Chief of the Phuket Provincial Land Office (PPLO), Supot Suwannachote, has moved to reassure businesspeople that the closer inspection of companies wanting to register land titles, as ordered by the Ministry of Interior, does not mean that transfers of ownership will be refused.

He stressed that he did not want to see a slowdown in Phuket’s booming property industry. “If your company is genuinely 51% Thai-owned, then there is no problem.”

K. Supot denied that all applications by companies with foreign shareholders are being put on hold, or that applications are being sent to Bangkok for examination.

“The first thing we do is check with the Provincial Business Development Office (BDO) whether the company has been properly set up, with foreigners owning no more than 49%.

“Where the company has a Thai MD [Managing Director] or has both Thai and foreign MDs, there is no problem. But when a Thai-registered company has a foreigner as its Managing Director, we check more carefully. For example, we check with the BDO whether the shareholding has changed so that the foreign share exceeds 49%.

“So far, we have not sent a single case up to Bangkok,” he said. Details of some applicant companies with foreign shareholders might be sent to the BDO for further checks, he said, but these checks should not take more than a month to complete. Since the order was issued on May 15, however, no cases have been sent to the BDO for checking.

The PPLO receives between 100 and 120 applications for change of ownership of land every day, he said, though most of these are transfers from one Thai to another or people wanting to register loan or lease agreements.

Since the original uproar over the tightening of checks on land transfers, matters have gone rather quiet in the property community, with concern over the brakes being put on business having, apparently, abated. Stuart Reading, Assistant Vice-President of Finance at Laguna Resorts & Hotels (LRH), said that LRH was not particularly concerned as most of its sales were on a leasehold basis, and thus did not require a change in land ownership.

But, he added, “I’m not aware of any transfers we’ve done in the past week that have [run into problems]. From what I understood this was mainly aimed at foreign developers. We’re a Thai company, so we are legally able to acquire and develop land, because we are a public company.”

BDO Chief Veerachai Tantiwathanavallop denied that checks on companies would take a month, as suggested by K. Supot. “It will take only a minute or so,” he said. “Just give me the name of the company and its registration number and I can tell you.” He confirmed that he had, to date, received no queries from the PPLO.

He noted that when people apply to set up companies, he explains to them that in order to register a Thai company the foreign shareholding must be no more than 49%.

He said that, theoretically, a company could increase its foreign shareholding to more than 49% but that it would then have to be re-registered as a foreign company, which would limit it to just 49 areas of business, all effectively in exports. “I have never had a single application of this nature,” he added.

The registration of new companies in Phuket continues apace. A total of 157 new limited-liability companies were registered in May. Of these, 50% were registered to do property business, and of those, 70% had foreign investors.