Asean integration could worsen nominee problems

       Foreign nominee problems will continue to haunt Thai hoteliers and the situation will worsen when the Asean Economic Community (AEC) takes effect next year.
       Foreign ownership of properties through nominees has raised concern in Thailand for a long time, said Prakit Chinamourphong, president of the Thai Hotels Association (THA). Most cases have been in tourist destinations such as Phuket, Samui, Pattaya, Rayong and Chiang Mai.
       "Our [local hoteliers] are very concerned about this issue but can't do anything. It is difficult to oppose foreign funds from many places like Europe,Scandinavia and Singapore. I think if this situation continues, foreign investors will own most prime properties in tourist destinations," he said.
       Holding shares through Thai nominees is illegal but many companies hire lawyers to clear the way for foreigners through legal loopholes, said Kittipong Urapeepatanapong of law firm Baker &McKenzie (Bangkok).
       "I believe they wouldn't want to do this if the law allowed them to rent properties or land for 60 or 90 years, up from 30 years at present. This nominee issue is growing more and more. If the gov-ernment wants to seriously investigate it, the problem will be solved, but the probe will take time," he said.
       When the AEC starts being implemented next year, Thai tourism operators will face an influx of more foreign funds after the liberalisation of air transport,tourism, telecommunications and health care, said Mr Prakit. Asean countries will be forced to allow foreigners to own stakes of up to 70% in companies.
       "If we have to open up more, the nominee problems will worsen. Foreign investors will own more land and properties in prime locations and beachfront land," he said.
       Foreigner operators can currently legally own land through Board of Investment (BoI) privileges only open to hotel operators.
       All foreign-owned hotel operators are allowed to own land as a privilege if they attain BoI approval, said BOI senior investment adviser Hirunya Suchinai.
       BoI rules open the hotel industry to foreign companies with at least 1 million baht in registered capital and a financial plan to borrow no more than three times the registered capital, she said.
       Companies file project details and numbers of rooms with BoI, which decides how much land they can buy or own. Companies must sell their land within a year of leaving the business.