Eyewitness reports indicate that the Thailand Real Estate market is feeling the squeeze of the global economic slowdown.  Near our office, construction work has not resumed on The Regent Residences on Soi 13 for several months.  The projects main investor is  Lehmann Brothers who bailed out the Thai local company Grande Asset, after they had financial problems (ran out of money) and before Lehman’s own financial problems, stemming from the global credit crisis.

We recently traveled to the Loei province on the cusp between Northern Thailand and Northeast Thailand.  The area is beautiful and has a cool climate with scenic mountainous landscapes.  In terms of beauty, it is equal to or surpasses Pai in Northern Thailand, but Loei has never lived up to its tourist potential. 

Speaking to property owners in Loei business is hard, and they attribute this mainly to the increase in fuel prices.  Most of their former quests were Thai people, who can no longer afford to travel so far.

The increase in fuel prices and the worldwide economic malaise will affect Thailand by making it more difficult for foreign tourists to afford plane tickets or time off from work to travel to exotic locations.  For local residents, it means people will be vacationing closer to home.   Think areas near Bangkok:  Ko Samet, Pattaya, Kanchanaburi, etc.

The major airlines in Thailand are already cutting back on flights.  People considering purchases in traditional resort areas that are remote, such as Samui, Phuket, Chiang Mai, should reflect on the possible slowing down of tourist arrivals and how that might affect their business.

Good choices for real estate investment near Bangkok include Nakhon Nayok and Pak Chong.  Both have been traditional holiday vacation for Bangkok residents but have never been very popular with non-Thai tourists. If resorts, shops and restaurants can open that will better serve foreign needs there may be a possible boon in these close-to-Bangkok locations?

Here’s an interesting warning to visa brokers from the UE Embassy in Cambodia:  http://cambodia.usembassy.gov/visa_services.html

“Please note that the Consular Section does not deal with visa brokers.  Anyone who claims they can guarantee visa issuance or expedite visa processing is lying.  The Consular Section treats allegations of fraud or malfeasance in visa processing very seriously.  If you have specific information about an incidence of fraud or malfeasance, please contact our office by sending an email to: visasphp@state.gov. “

If you are ever in doubt of whether you are in the presence of a visa broker as opposed to a real lawyer, watch for the following telltale signs:
1. Do you find yourself unconsciously checking if your wallet is still in your pants pocket?
2. After shaking his hand, do you feel like going to the restroom to wash up?
3. Do you get the feeling that you will be offered a good deal on a pre-owned vehicle?

Thaksin’s previous attorney, now the Minister of Foreign Affairs in the current Samak regime, is being criticized for his decision to join Cambodia’s request to allow Cambodia to request UNESCO status for the temple Preah Vihear.  The request has been the subject of a successful injunction in the Thailand administrative Court.  The decision of the International Court way back in 1962, actually affirms the rights of Cambodia to the Temple.  (See International Court of Justice Decision: Temple of Preah Vihear).   One of the most notable aspect of the decision, is that it is so old that it is actually typewritten.   You would think that the lack of computers and word processors would force the justice to be less bombastic.  The decision is over 60 pages long and there ar multiple other huge document files associated with the case.  One (of several) dissenting opinion is longer than the main opinion.  God Bless the secretarial staff.

The underlying premise of the movie series “Saw” is that close brushes with near death experiences are good for the spirit. Or as Carlos Casteneda once wrote “Death is a wise adviser”. But does this same reasoning also apply in Thailand?
 
If your doctor found out that you had a terminal illness such as late-stage cancer, would you want to know? If your family is Thai you may never know. Thai families often try to protect family members from bad medical news. Also many Thai physicians hesitate to disclose “bad news” to their patients, but may disclose the truth to the patient’s immediate family. In many cases, the patient is the last person to know his own medical condition.

The new Health Act makes it mandatory for public health workers in Thailand to inform a patient of his or her health condition so that the patient is able to make an informed decision to receive or reject any treatment suggested.

The new act makes disclosure mandatory and, to a large extent, will change the face of Thai medical culture to one that takes in a broader understanding of individual rights.

According to the new act, an individual is also entitled to make a Living Will expressing the person’s intentions to not receive medical treatment for the purpose of extending the last phase of a person’s life. A Living Will may also allow an individual to choose to end the suffering arising from an illness.

Public health officials abiding by the Living Will are not conducting themselves improperly and will not be held liable.

People travel to Thailand for many reasons: business, pleasure and other reasons. If you are interested in combining business and vacation and are interested in legal issues (and a possible tax deduction) you may want to investigate a Legal or Law Seminar or Conference in Thailand. A current list is kept on the Thailand Law Forum homepage.

Q:  I have read that the best way to acquire land is to have a Seller grant me “Usufruct” rights.  What do you think?

A:  As you are probably aware, foreigners who are prohibited from owning land in Thailand except in 2 circumstances: 1. with a massive investment of 40 million baht into the Kingdom or 2. as inheritance from a Thai person and in any event not more than 1 rai for residential land.

In the past few years, “usufruct rights” have been very fashionable and are being advertised as an under-utilized right that foreigners may acquire in Thailand.

A Usufruct is a legacy from the Civil Law (as opposed to common law jurisdictions.)  interestingly, in the USA’s only civil law jurisdiction. Louisiana, the Usufruct model is still widely in use.

Usufruct is a right in real estate owned by another, for a limited time or until death. A Usufruct entails the right to use the property, to enjoy the fruits and income of the property, to rent the property out and to collect the rents, all to the exclusion of the underlying real owner. The usufructuary has the full right to use the property but cannot dispose of the property nor can it be destroyed.  Normally a Usufruct is mainly for collecting “fruits” of the land, such as agriculture products, and not for residence.

There is another right very similar to a Usufruct called a right to habitation in Thailand. This is exclusively for habitation.

The Usufruct has some good points.  The usufruct can be made for life of the renter.  The major negatives are that a usufructary cannot sell or transfer the real estate (but can transfer his own usufruct rights.  It is also not inheritable. 

Conversely, the rental of property in Thailand cannot exceed 30 years. However, and this is a big HOWEVER, a rental of real estate can also be for the full life of the renter (lessee).  The usufructuary is normally prohibited from building on or making major changes on the Land.  In fact the usufruct is a very limited right and often used as a mere confirmation of an existing activity that is allowed on someone else’s land. 

The advantages of a lease are that: the terms can be negotiated to include: assign ability (the ability to transfer to a new lessee), the right to build and make major changes on the land, the right to options to renew for additional 30 year periods.  A very important right that a lease may include is an option to buy should the Thai law ever change to allow.

All in all, a Lease is a stronger right and allows the lessee more options than a Usufruct (or right to habitation) and is superior to a Usufruct for most normal situations.

Question: 
I have read that the best way to acquire land is to have a Seller grant me “Usufruct” rights.  What do you think?

Answer: 
As you are probably aware, foreigners who are prohibited from owning land in Thailand except in 2 circumstances:  1. with an investment of 40 million baht into the Kingdom or 2. as inheritance from a Thai person and in any event not more than 1 rai for residential land.

In the past few years, “usufruct rights” have been very fashionable and are being advertised as an under-utilized right that foreigners may acquire in Thailand.

A Usufruct is a legacy from the Civil Law (as opposed to common law jurisdictions.)  interestingly, in the USA’s only civil law jurisdiction. Louisiana, the Usufruct model is still widely in use.

Usufruct is a right in real estate owned by another, for a limited time or until death. A Usufruct entails the right to use the property, to enjoy the fruits and income of the property, to rent the property out and to collect the rents, all to the exclusion of the underlying real owner. The usufructuary has the full right to use the property but cannot dispose of the property nor can it be destroyed.  Normally a Usufruct is mainly for collecting “fruits” of the land, such as agriculture products, and not for residence.

There is another right very similar to a Usufruct called a right to habitation in Thailand.  This is exclusively for habitation.

The Usufruct has some good points.  The usufruct can be made for life of the renter.  The major negatives are that a usufructary cannot sell or transfer the real estate (but can transfer his own usufruct rights.  It is also not inheritable. 

Conversely, the rental of property in Thailand cannot exceed 30 years. However, this can be renewed for additional 30 year periods.  The usufructuary is normally prohibited from building on or making major changes on the Land.  In fact the usufruct is a very limited right and often used as a mere confirmation of an existing activity that is allowed on someone else’s land. 

The advantages of a lease are that: the terms can be negotiated to include: assign ability (the ability to transfer to a new lessee), the right to build and make major changes on the land, the right to options to renew for additional 30 year periods.  A very important right that a lease may include is an option to buy should the Thai law ever change to allow.

All in all, a Lease is a stronger right and allows the lessee more options than a Usufruct (or right to habitation) and is superior to a Usufruct for most normal situations.   However, the negative aspect of a lease is that it is limited to 30 year periods.

Question:
What is your opinion on the use of an offshore company as a minority shareholder in a Thai company holding land?

Answer:
The use of an offshore company as a minority shareholder has been a practice in Thailand and a means to minimize taxes and/or maintain confidentiality by some companies. The practice is not strictly forbidden by Thai law, yet some factors should be kept in mind for companies considering employment of an offshore company. For historical and practical reasons, corporate structures using an offshore company have been subject to an increased amount of Thai government scrutiny and obstacles. Furthermore, funds remitted from sale of Thailand real estate from or to Thailand may be held up. However, individual land offices and even different officials in the same Thailand land department may have different viewpoints or procedures.

Question: Can I get a US spouse visa in 4 months? 

Answer: US visa processing is performed first by the USCIS in the United States and then by the US Embassy in the country where the visa beneficiary is located. USCIS case processing times are no secret. They are posted on the USCIS website. As of 15 February 2008, the California Service Center was processing US citizen petitions filed in August 2007 for I-129F fiancé (e) visas and July 2007 for I-130 spouse visas. The Vermont Service Center was processing fiancé (e) and spouse petitions filed in August 2007. This means that USCIS is currently 6-7 months behind (see link:  https://egov.uscis.gov/cris/jsps/Processtimes.jsp?SeviceCenter=CSC).

USCIS processing of the petition is only the first step of the process. Now add to this time the fact that once the USCIS processes a visa petition, it still needs to be sent back to the US Embassy in Thailand for the Thai partner to file the visa application. Visa processing at the US Embassy may take from 1 1/2 to 3 1/2 months from the time the file is received until a visa is issued. Therefore, the processing of 6 months at USCIS, in addition to 1 1/2  to 3 1/2 months at the US Embassy, makes the entire visa processing time from 7 1/2 to 10 1/2 months from the petition being received at USCIS until a visa is issued.

For those individuals or companies advertising that they can obtain a fiancé (e) or spouse visa for clients in 4 months, we recommend asking them how they can obtain a visa faster than the USCIS can complete processing of the initial paperwork. Ask them to put the 4 months guarantee in writing with a full refund if they cannot get you a visa in 4 months.

Increased Visa Application Fees
Effective from 1 January 2008, non-immigrant visa application fees increased from US $100 to $131, and immigrant visa application fees increased to $400, as stated on the website of the US Embassy in Bangkok.

A friend of the firm, and American lawyer, concentrating in real estate title insurance in the US, has notified us that First American Title Insurance Company has recently approved Thailand for issuance of their international title insurance policies. The recent return to democratic rule in Thailand may be a positive opportunity for a growing role of title insurance in Thai real estate transactions.

On the battle of Thailand law websites, here is an interesting newcomer:  A Thai lady lawyer residing in the USA has developed a Thai language blog about Thai law and US immigration law.  The site “www.lawanwadee.com” is pleasantly designed and informative.  Great job Lawanwadee.