Siam Firm Inter Laws was established by Khun Somsak Chopaka an Attorney at Law with 30 years of working experience in domestic and international law, for individuals both foreign and local, domestic entities and in-house legal counsel for numerous established international companies. Khun Somsak will be giving legal advice about the ever changing situation in regards to Thai Law and keeping readers up to date with the constant changing business and social environment here in Thailand.
I have seen many cases of foreigners coming to live here and either not understanding or caring about the legal right to sell foreign shares here in the Kingdom of Thailand, even though they may own or operate a company abroad that is involved in this business. Whenever they sell shares from a foreign stock exchange here in Thailand upon receiving any payment they will be charged by a Thai court of law, as it is against the stock exchange act. While this is the case for illegally set up companies or individual parties there are legal ways to be a part of this business, they require you to set up a public company with a capital of one hundred million baht, that runs an actual business here in Thailand which is then used to apply for a permit to sell stock locally.
It is possible though quite difficult to gain this permit. A lot of foreigners will choose not to go this way as it requires a lot of investment in time and resources and decide to cheat their clients by falsely claiming that they indeed have the aforementioned permit. They will then ask the client to transfer the money to a staff account here in Thailand as per the norm in this kind of transaction. Most companies that operate using the stock market follow up the profit and loss of shares, paying when the shares are up whilst keeping the invested money in the company and also deducting the loss when the stock market is down.
But there are companies which never return a single baht back to the investor and we call these companies “call center boiler rooms”. In the past when someone is caught operating this kind of business they will be arrested and charged by a prosecutor over visa charges or operating a business without a work permit. When they are in court they will only be punished by a lax fine of only two thousand five hundred baht for each charge followed by being deported out form the country. The boss meaning the owner of the company will have to pay an increased fine of eight thousand baht and will also be deported.
But now this has changed; right now the penalty for such a crime is the aforementioned fines along with a one year jail sentence after which the individual will be deported back to their home country. I have seen many cases of boiler room businesses and it is an easy way of cheating many people from abroad especially from Australia, America or the United Kingdom. Nowadays these companies will use a Thai bank to receive money from clients buying shares when before they would only use a foreign bank, the local bank account will also usually be under the name of a Thai spouse or colleague of the company owner. When a client becomes suspicious they will usually follow the account and if taking the issue up with the company owner amounts to nothing then they will involve the local police.
If the police see that the account in question has an abnormal amount of transactions and/or an abnormal amount of money in it then they will place the owner n the suspicion of money laundering, requiring them to prove their innocence. If their innocence cannot be proven then the account in question will be frozen by the police, they have to prove that the money was made in the correct way, declare what businesses it came from and how the money came to be in their account to prevent this from happening which is not easy. Even so there are still many foreigners coming to Thailand for sightseeing or a short term stay that will come to work for an illegitimate business such as this making enough money to spend on that length of time.
Not knowing that they are causing a lot of trouble for other people and that if they are arrested they will receive severe punishment for the crimes committed, I have seen many serious cases like this in the Thai court system. Our comment: If you see a business or an organization similar to what I have mentioned above please do not become involved in any way. It is not good for yourself or for the people who are cheated out of their life savings, some are old or handicapped and it social effects are staggering.
If you plan on making an investment in the stock market make sure you do so through a legal broker agent, even if you have to pay a brokers fee you will be safe in the knowledge that whenever you want to buy or sell at a profit or loss you can be sure that you are not being cheated and that whoever you are doing business with has the proper license and permits.
By Somsak Chopaka of Siam Firm Inter Laws English Hotline:
081 808 9175, 089 774 6001, 084 979 4714
Pattaya Office:
+66 (0) 38 906 721-3 Bangkok Office:
+ 66 (0) 2 260 3025 – 7 Hua Hin Office: +66 (0) 32 531 508 somsak@siamfirm.co.th For more information see www.siamfirm.co.th
