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Wednesday 24 January 2007

Koh Samui and Thailand - What now?

From a Real Estate point of view we have seen increasing interest since Christmas with more enquiries of a serious nature and sales being agreed. I am a little surprised that many lawyers seem to be still promoting the acquisition of real estate through the Thai company route and it does appear to be correct that the Land Office are continuing to register land of less than 1 Rai to companies with foreign shareholders. I can only assume that they are looking at the new FBA which it is stated will give companies two years to rectify any irregularities in the belief that a newly elected government will correct the present unsatisfactory situation. The nominee structure with its combination or Ordinary and Preference Shares was for many years the accepted way for foreigners to own land and it was a typical Thai pragmatic compromise which allowed this despite the strict conflict with Thai Law. The present government, interim as it may be, have made it very clear that businesses in Thailand must be majority Thai owned and the Thai shareholders must have majority voting rights. Foreigners may not own or control businesses in Thailand. I think it is widely accepted that this whole situation was brought about as a consequence of the deal between the ousted Prime Minister Taksin Shinawatra and the Singapore government for the sale of his family business Shin Corp. Apart from the tax free nature of the sale which created a lot of bad feeling the issue it brought to the fore was the control of a major Thai company (and a sensitive one being in telecommunications) by a foreign entity. Further investigations into his business affairs and those of his family really opened a huge bag of worms which extended to land deals and which the opposition seized upon with glee and culminated in the Coup last September.

Where does this leave us with regard to real estate? The first thing is not to panic. Nothing stays the same for long here and much fear of what might happen is built on ill founded rumour. We have had meetings with certain people recently and even within the present system there are fairly highly connected people who recognise the dilemma and who are trying to come up with a solution. For the time being my own recommendation is that land should be acquired on a Registered Lease for 30 years with two well drafted options, firstly to acquire the land should the law change and secondly to extend the lease for a further 30 years. The house on the land can be owned separately in your own name. There is also talk about extending the period for which a lease can be registered and some rumours state 90 years and some 60 years. As usual we must wait for the facts and assume nothing. I consider it highly unlikely that Thailand will relax its policy on foreign ownership of land but I do think they will come up with a solution that makes investment here acceptable again.

Monday 8 January 2007

Quad Bikes on Koh Samui

Last November Top Gear’s Jeremy Clarkson ventured to Botswana and experienced Quad Bikes.
Here is a quote:

“Now, the quad bike has had a fair degree of bad press in recent years. First of all, we had Rik Mayall damn nearly killing himself when his turned over and then, more recently, poor old Ozzy Osbourne breaking what's left of his body in two when his pulled a wheelie, throwing him off the back.

If you want to kill your children, there's no quicker way that I can see than buying them one of those 50cc jobbies you sometimes see at garden centres. My son went on one the other day and in less than two minutes, he and it were in the swimming pool.”

The full article can be found here
http://www.topgear.com/content/features/stories/2006/11/stories/02/1.html
What on earth are they doing now on the roads of Koh Samui? Over recent weeks more and more of these machines have been seen zooming round the island with the riders for some reason believing that they are safer than the two wheeled death traps popular with locals and tourists alike. Koh Samui has a high enough accident rate without adding the false sense of security that these vehicles appear to give people. Not only that, but I have yet to see one with a licence plate, nor have I seen a tax disc and I suspect therefore no insurance.

During the Second World War, that work horse of the US Army the Jeep had a great reputation for its ability off-road, but the opposite on-road where it killed many GI’s due to its inability to turn corners at speed. These Quad Bikes seem to have similar characteristics and I wonder how long it will be before we see them adding to the island’s statistics.