What will happen when Thailand’s civil laws are enforced?
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Rude awakening in a land of law and order
Believe it or not: Thailand’s law books provide for a systematic, solid and enforceable legal system. Contracts can be validly agreed and contractual obligations can be efficiently enforced. The civil law system had been taken from the German role model. The Civil & Commercial Code of Thailand is, in the end, a combination of the German Civil Code, the German Trade Code, and the German law for limited companies.
These strict but reliable rules are in Thailand’s legal industry frequently ignored and neglected for small and medium-sized foreign investments. In those cases, the investments base on the personal trust that all participants remain friendly and cooperative, on an implementation as cheaply and simple as possible and on the deep hope and believe that everything will be alright.
It is more than a thought experiment to consider what will happen if the foreigner awakes in an unfriendly environment where the market participants enforce their rights under the laws of Thailand regardless of previous promises and illusions. Under which precondition is such scenario realistic? And what will happen with foreign real estate developments, with foreign minority-owned companies and other typical foreign investment structures? And, last but not least, how can the foreigner secure his investment in paradise? These aspects had been the topic of a speech held at the German-speaking Rotary Club Phoenix Pattaya on March 7, 2017, at the Hotel Holiday Inn, Beach Road, Pattaya.
PUGNATORIUS Ltd. is the Bangkok-based specialist provider of bespoke transactional legal and tax advice on foreign investments in Thailand’s manufacturing and service industries as well as property developments and acquisitions. To avoid a rude awakening as a feigned land or villa owner, lessee, or shareholder, ask the law firm for an investigation and repair of your broken investment structure.