Lawyer in Pattaya

Many of my clients come to me with problems that result from language.

My simple advice is: If you can’t read a contract, don’t sign it!

Don’t you feel a bit uncomfortable if you spend your money while people around you discuss the deal in a language that you don’t understand?

If you have to sign a contract that will result in spending your hard earned money spend a little bit more money on hiring a legal professional that speaks English. It is very important that you can speak direct with your lawyer without the interference of a 3rd person that may or may not understand the issue at hand.

As always with contract the pitfalls are in the small small details. Some detials may be different than what you are used to. Make sure that you fully understand what you sign.

Take your time, and ask your lawyer to negotiate if you don’t agree. Contracts are there to serve both parties!

Now that Annice Smoel, the Australian woman who was arrested for stealing a bar mat, is heading home I hope the upheaval will ease. This of course is not good for Thai tourism that has been suffering a lot already and I don’t want to defend the way this incident was handled.

As a lawyer in Pattaya I’m regularly helping foreigners who get in trouble here. Often the reason for getting in trouble is that foreigners don’t realize that things are different here than at home.

Let’s take drugs as an example. In many western countries there is a difference between soft drugs and hard drugs. Soft drugs are sold legally or at least tolerated in those countries. Don’t make the mistake in thinking you can buy soft drugs in Thailand. If the police catches you, and they often do, you are in the same kind of trouble Annice Smoel got in to. So stay clear of all drugs in Thailand.

Petty theft like the Annice Smoel case is another example. In Thailand theft is theft, taking a bottle of water from a shop without paying is theft just as taking 100,000 Baht. So if you are arrested you get in the same procedure as anybody gets. No difference between Thai citizens or foreigners.

To come back on the case of Annice Smoel it may be culture to take bar items like beer mugs and bar mats as a trophy in many western countries, here it is not like that. And to put things in to perspective I read the value of the bar mat was about 2,000 Baht. That value comes close to what a waiter or waitress will earn in 2 weeks. Did you know that it is common practice in Thailand that they have to pay for cash deficits or items missing during their watch? That is why your chance is counted so many times at shops and restaurants. If there is money missing the cashier has to pay the difference!

About talking to the police, even if you are drunk, or 100% sure you are treated unfair, stay calm. Never ever shout at a policeman, it will get you in much more trouble. In Thai (Asian) culture loosing your temper is taken far more seriously than in western culture. Anyway insulting an officer on duty is an offense probably everywhere in the world, but here it will be taken more seriously for sure.

So foreigners beware Thailand is not the same as your western countries in many ways. But many of you come here to taste the difference in culture, enjoy it, avoid hitting walls!

It’s no secret that the property market in Thailand is not at it’s high. Many developpers, agents, contractors, dealers, etc. are eager to sell. Sometimes they are so eager to close the deal that some details are overlooked.

An increasing number of people consults me on the issue of purchasing property in Thailand. Much to my regret I see that in many cases things are not right.

If you buy real estate in Thailand make sure you will get what you pay for! Call in the help of a professional before you sign anything. Have all relevant documents and the project checked.

Don’t let anybody put pressure on you to sign! Potential buyers are not fighting over the property, this is a buyers market. Even the biggest real estate companies in this area sell about 1 house per month. If the seller puts pressure on you this is an indication that something may be wrong.

Let me give you some examples of what I have been dealing with recently:

• Properties that can’t be transferred because they are mortgaged.
• Buying contracts that lack a proper description of the property, area, size, title deed (chanot), construction period, transfer date, etc.
• Developments where only 5 out of 30 planned properties are sold.
• Houses in the middle of an unfinished development with no services, security, etc.
• Maintenance cost for hundreds of condo’s shared by only 50 owners that paid and accepted their condo.
• Construction stopped, terms have been paid.
• Unclear lease contracts.
• Lease of land with no separate chanot.
• Developments with no development license.
• Selling land that has not been subdivided.

These are just some examples.

Please be carefull and make sure you can enjoy your property without worries and frustration.

Many people are unaware of the legal difference between theft and embezzlement. Let me start with a definition.

Embezzlement is the act of dishonestly appropriating or secreting assets, usually financial in nature, by one or more individuals to whom such assets have been entrusted.

In criminal law theft (also known as stealing) is the illegal taking of another person’s property without that person’s freely-given consent.

Notice the difference? Embezzlement happens a lot more than theft as it is often much easier. But it’s also easier to prevent if you are aware of the risk.

First it’s good to know that the average income per worker in Thailand is much lower than that in western countries. On top of that comes that many people here have debts ranging from mortgages and bank loans to debts with loan sharks asking interest rates of 10% per month or more. In some cases the pressure on these people can get very high to cope with increasing interest and return payments without loosing face to the environment.

At home my advice is never have money laying around and don’t show off. If you have cash money, put it in a safe or bring it to the bank. The same applies to jewelery and other valuable items. Staff in the house should not feel tempted.

In a company it’s also important not to create to much temptation, so avoid large sums of cash. Follow proper procedures when it comes to handling money and goods. Proper procedures include separating handling of goods and money and control. Don’t trust single persons doing all. Check regularly on money and goods, specially if the goods are easy to use or sell. Ask for receipts when cash payments have been done, you need it any way for your tax. Check how much fuel your company cars consume on a regular basis. If possible work with suppliers on an account invoice that is paid by bank in stead of cash. Make sure you or somebody you trust to control can read the receipts and knows if the price is right. Fried rice costs 25 Baht, not 125!

Keep in good contact with your staff and if the company is bigger make sure your managers do the same. This way you will know in an early stage if somebody is getting in financial trouble and you can take preventive action. Try to handle the situation with your staff and their managers.

Also if you have business partners, shareholders or directors make sure you have good procedures on dealing with money and other assets of the company.

In general, keep your eyes open for signals, don’t be a fool. But if you accuse somebody make sure that you have 100% proof of the embezzlement. If you have to accuse somebody make sure you handle it good. Don’t do the talks alone make reports of all steps and meetings.

Embezzlement is also possible in real estate and construction or investment dealings. If somebody sell the same condo twice accepting money from both buyers that is embezzlement, if you pay for a condo and it appears to be mortgaged that is embezzlement. Now we are also touching fraud here, but that is for another time. If you pay for an investment and you money was not invested as agreed that is embezzlement too, look at Mr. Madoff in the US. If you pay the builder and there is no building going on that is embezzlement.

Embezzlement is a criminal offense that should normally be reported to the police. Unless you have personal reasons not to do so. Be aware that if you do not report embezzlement to the police within 3 months after you discovered it, you are assumed to have known and to have consented with it. So you can’t result in prosecution anymore.

If you have to fire a worker for embezzlement, inform the labor department about the reasons to prevent any procedures.

The Thai language has it’s own script consisting of 44 consonants and 32 vowels, some intonation marks and some obsolete characters that are still used sometimes. Translating from Thai to English or from English to Thai or other languages does not only involve ordinary translation. It also involves what’s called “transliteration” or “romanization” to translate the written language. The problem is obvious, 44 + 32 does not fit in 26 characters of the alphabet and how to match the 44 + 32 to the 26 vice versa is also a problem.

Transliteration is done often in Thailand in both directions. Official documents need your name in Thai, if you have a foreign address even the letters in your postal code are transliterated in Thai. The problem is that this transliteration is done by the person in “charge” at the moment, your lawyer, secretary, Thai girlfriend, the driver, housekeeper, etc. Most of them have problems with the pronunciation of English, so the transliteration is quite random, if no record of the original name is kept, so if transliteration back is needed, the results can be surprising. Certainly if you have a German address transliterated by a barely English speaking Thai clerk at the commerce department, don’t expect a letter to arrive.

An example, if a German shareholder in a company would reside on the Immermannstraße that could be written in Thai as  ไอมเมอร์แมนสตราแบ if transliterated back this could become the Aimermenstreb, poor German mailman.

The Thai have provided a solution for this problem, in 1954 the Royal Institute devised an official system for transliteration form English to Thai and vice versa. Back in 1967 official transliteration were made of al names of provinces and cities! But still it can happen that driving from Bangkok to Pattaya that you see 3 different spellings of Pattaya on you route, Pattya Phathaya, Phattaya, etc. Jomtien can also be written as Chiom Thiang, would you still recognize it? Sattahip, can be Sattahib, Sattaheeb, etc. Apparently not all Thai that put up the directions on the road are aware of the standard of 1967.

As a suggestion I would like to promote that in official documents the source of the names in roman writing is kept with the documents to prevent problems when a reverse transliteration is needed.

One day some time ago Mr Smith and the Franklin Brothers, all from Europe, came to my office. Construction of a factory, where they would build large products for export, was almost finished. They were accompanied by Mr Smith’s  Thai assistant Cat (obviously of the 3rd sex) who presented herself not only a Mr. Smith’s assistant, but in Thai language also as his wife. I’m not sure whether Mr. Smith was aware of the latter claim, but I’m sure his European wife wasn’t.

Mr Smith and Cat met sometime before in a bar and had enjoyed a good working relationship since. Cat had been taking care of all Mr. Smith’s affairs where it came to interaction with the Thai speaking environment.

Mr. Smith had already started his production in the factory of another farang Mr. Jones, who happened to have some space left. By the time the first products were sold and almost ready for delivery, the future looked bright and it was time to build their own factory.

As Mr. Smith was not heavily stacked with cash, investors where needed and found at a trade exhibition in Europe. The Franklin brothers were interested in both the product and in investing. Money was glooming in their eyes because Mr. Smith’s product seemed to be in popular demand.

The Franklin Brothers, both seasoned business man and entrepreneurs, traveled to Thailand to inspect the project. They stayed at Mr. Smith’s beautifully renovated luxurious mansion. After a week of tropical sun, drinks, golf and a look at the products they decided to go for it! Not in the least bit worried by the unusual lifestyle of Mr. Smith and the rather odd personalities populating his house, they transferred considerable amounts of money to Mr. Smith.

Now Mr. Jones, from whom production space was rented, was married to a Thai lady and her brother knew a plot of land nearby that was excellent to build the new factory. Cat negotiated a deal complete with clearing and filling up of the land. The seller was able to arrange all that at almost no cost. Plans for the building were copied from somewhere else and, a construction permit was arranged by Cat and the local authorities. A local builder was hired and construction would be finished in a few months.

The reason for their visit to my office was that the Franklin Brothers heard about the attractiveness of BOI (Board Of Investment) facilities, including tax holidays and 100% foreign ownership of the land, etc.

Mr. Smith was of the opinion that this was not necessary at all, together with Cat and some of her friends every aspect of the business including legal matters and accounting was completely under control. BOI would bring them nothing but enormous administrative burdens and the need to acquire an ISO certification, all a waste of time. It was obvious that Mr Smith hated paperwork insisting also that for what he did a work permit was not necessary another reason to keep the BOI accountants far away!

The Franklin Brothers insisted and as they where by now the major shareholders, not counting Cat, the process of a BOI application was started. Not unusual but dangerous was the fact that Cat was the majority shareholder, as she and her friends volunteered in taking the usual 51% of the shares in their names.

In order to qualify for BOI some of the more important requirements are:

• an operating permit for the factory
• a proper financial accounting system
• a business plan

A business plan had never been there, but that could always be drawn-up, no problem.

In preparing the operating permit, to be applied for as soon as the factory was ready, we discovered that the factory was almost finished in a green area. In green area’s no production activities, certainly not those intended were permitted. A closer inspection of the construction permit pointed out that after creative maneuvering of Cat and the local authorities a permit for a warehouse was issued. Revision to a production facility was impossible in this location.

The second problem was the financial accounting being a complete mess, full of all kinds of handwritten receipts and notes of cash payments. Even the building was paid in cash because the builder preferred not to write invoices. After weeks of tedious work of our accounting staff the reason for Mr. Smith’s collection of handwritten receipts become clear as became the reason for the large collection of pen’s and pencils on his desk.

Mr. Smith was convinced that Thailand was cheap enough in the eyes of the Franklin Brothers even if it was a bit more expensive. Until now nobody had been checking prices and number of goods received so it was easy to add a number here and there resulting in some extra cash. After all Mr. Smith was working hard for it here under terrible Thai circumstances. Looking at the whole picture my accountant was convinced that the “miss writings” were only the top of the iceberg at a total of over half a million Baht. Some inquiries with suppliers we happened to know learned that many other invoices were originally miss written making the true size of the fraud hard to discover.

Guess what’s the moral of the story? That where there is greed there often is no moral!

All official documents and contracts in Thailand are in the Thai language. If you ever need to go to court about a contract there should be a Thai version of that contract. The Thai version is leading in the court even if the contract was originally signed in another language. So you better make sure you have a proper translation!

By signing a document you indicate that you have read and understood the contents of it, so never just sign anything that you have any doubt about!

document in Thai

Can my girlfriend read the contract? To be honest I don’t think so, unless she’s a legal professional. Legal documents are difficult to read in any language, also in Thai. So even if you are a very good Thai reader you’ll easily miss important issues if you are not skilled in reading legal documents. So if the matter of the contract is of any importance to you, have a legal professional check it for you.

Oh, before I forget, have a contract or document you have to sign checked by a lawyer before you sign it! It’s much easier to prevent problems than to solve them.

First of all Welcome to my Blog!

You can look up Pattaya in Google or Wikipedia and see a lot about the scenery and leisure available here. But what about the business and legal scenery? That is what I would like to inform you about. Because Pattaya and the Eastern Seaboard provinces Chonburi and Rayong are interesting from a business point of view too.

So for those of you who do not just come here to spend money, but are interested to make a buck or too, please keep reading or get in touch if you need our services!

Or those of you who want to stay here legally, maybe buy some property and don’t want any worries, we can take care for you.

Now for the record, on this blog I will share some of my experiences of being a lawyer in Pattaya. How unlikely they may sometimes seem, all these stories are real. But as I should do to protect the identity of the parties involved, names, places, figueres, etc. have been altered. So existing or future clients, don’t worry, nobody will know it was you.