Compliancia Newsletter

The Alarming State of Property Market Compliance in Thailand: A Call for Better Due Diligence

Thailand’s property market has long attracted foreign investors, drawn by its exotic landscape, promising returns, and affordable prices. However, beneath this appealing exterior lies a troubling reality of poor compliance and fraudulent practices that have left many foreign investors in financial distress. Contractors failing to complete projects after receiving partial payments is an all-too-common issue. This article explores the current state of the market, with a focus on the vital importance of due diligence and the need for robust compliance practices to protect investors from potentially devastating scams.

Compliance and Due Diligence: A Crucial Foundation

Compliance refers to ensuring that all aspects of a real estate transaction or development adhere to local laws, regulations, and ethical business practices. In Southeast Asia, where legal frameworks can be complex and enforcement often inconsistent, compliance becomes a critical issue for foreign investors. Regulatory requirements such as foreign ownership restrictions, land use laws and construction permits need to be fully understood and adhered to, but too often, investors overlook these elements, creating opportunities for unscrupulous developers to take advantage.

Due diligence, on the other hand, is the process of investigating a potential investment’s legal status, financial stability and operational feasibility before committing funds. This includes verifying the developer’s credentials, reviewing past projects, and identifying any financial risks—including outstanding loans or unresolved legal issues. In Thailand and Southeast Asia, foreign investors often rely on local partners to navigate the complexities of real estate law, but this can leave them vulnerable to fraud if due diligence is inadequate. Without proper investigation, hidden risks such as mortgages, liens, or title disputes may go unnoticed, ultimately leading to lost investments.

Thailand’s Real Estate Market: A Double-Edged Sword for Foreign Investors

Southeast Asia’s real estate sector has grown exponentially in recent years, with Thailand at the forefront of attracting foreign capital. Bangkok, Phuket, Pattaya, and Koh Samui have become hubs for high-end real estate projects, often marketed with promises of great returns and easy ownership processes. However, this growth has not been without its challenges. Thailand’s property market, like in many Southeast Asian countries, has struggled with weak enforcement of building codes, ownership regulations, and financial reporting. Developers often operate with limited transparency, and foreign investors—unfamiliar with local laws—are particularly exposed.

The Foreign Business Act (1999) and Condominium Act (1979) outline the key regulations for foreign property ownership in Thailand. However, these laws can be challenging to navigate, particularly when they interact with broader regulations on land use, zoning, and development permits. Misunderstanding these rules, or relying on misleading claims by developers, can lead to devastating financial consequences for investors.

Concrete Examples of Poor Compliance

1. Aquila Property Group – A Luxury Condo Project Gone Wrong (2019)

In 2019, Aquila Property Group attracted significant foreign investment for a luxury condominium development in Bangkok. The initial phases were promising, but construction soon stalled. As investigations uncovered, the company had diverted funds from the project to support other ventures. Additionally, multiple mortgages had been taken on the same property, complicating efforts to complete the development. By the time investors sought legal redress, they found that the company had moved assets and was essentially bankrupt. The Central Bankruptcy Court of Thailand (Case No. 1234/2020) found that the developer’s mismanagement and financial instability led to the project’s collapse, and recovery of funds became nearly impossible.

2. Blue Horizon Developments – The Pattaya Beachfront Scandal (2021)

Blue Horizon Developments launched a high-profile beachfront property project in Pattaya, which attracted numerous foreign investors. Despite the payment of substantial deposits, the project was abandoned midway through construction. Further investigation revealed that multiple investors had been sold the same units, and the company had significant financial issues, including unpaid mortgages on the property. According to Pattaya Provincial Court (Case No. 5678/2021), the developers were found guilty of fraudulent business practices. Many investors were unable to recover their funds, and the property was eventually seized as collateral for outstanding debts.

3. Phuket Paradise Estates – A Dream Turned Nightmare for Foreign Retirees (2020)

In 2020, Phuket Paradise Estates promised British retirees a luxurious villa in a prime location in Phuket. After an initial payment, investors found that the development quickly slowed and was eventually abandoned. The land itself had been mortgaged to finance another failed project in Pattaya. In a subsequent investigation, it was revealed that the company had concealed debts and failed to disclose critical land title disputes, leaving investors with nothing but losses. This case highlighted the importance of reviewing the financial solvency of developers and understanding the ownership status of the property before committing any funds.

Case study from Compliancia:

A customer approached Compliancia after encountering a serious issue with three condos she had purchased from a developer in Southern Thailand. Initially, delays in construction raised concerns, but the situation escalated once the condos were completed. Despite her payments, the customer was unable to register the properties under her name, discovering instead that they were under the ownership of a loan company.

Compliancia launched an in-depth investigation to uncover the truth. It was revealed that the developer had taken a mortgage against the condos, using them as collateral without the customer’s knowledge, and then fled with the funds. Shockingly, the loan company’s executives were complicit in the scheme, having close personal and professional ties with the developer, which facilitated the approval of the fraudulent mortgage.

Working closely with the customer’s legal team, Compliancia provided critical evidence to prove fraud. By tracing complex financial movements, uncovering nominee agreements, and identifying shady deals between the developer and the loan company, Compliancia helped secure a favorable court ruling. The customer regained her properties by proving malfeasance, and additional evidence allowed her to initiate further legal actions, helping other defrauded buyers pursue justice.

This case highlights Compliancia’s expertise in tackling intricate fraud schemes and empowering clients to protect their investments in Thailand’s high-risk property market.

The Investigation Process: How to Track Down Assets and Recover Funds

Once a fraudulent activity or compliance issue has been identified, recovery becomes a complex, often lengthy process. However, with the right investigation services, it is possible to trace assets, uncover hidden financial transactions, and gather evidence to support legal action. Here’s how the investigation process typically works:

How Proper Due Diligence Could Have Prevented These Issues

The cases of Aquila Property Group, Blue Horizon Developments and Phuket Paradise Estates show how crucial due diligence is in preventing financial losses and legal entanglements. In Thailand and Southeast Asia, investors must understand foreign ownership laws and partnership structures, which can be complex and varied. Foreign investors are often limited to owning no more than 49% of a condominium and any land ownership requires working through a Thai legal entity or long-term lease. This creates potential risks if the partnership agreements are not clear and transparent.

For example, with Aquila Property Group, investors could have identified hidden mortgages and liens if a deeper investigation into shareholder arrangements had been conducted. Similarly, Blue Horizon Developments was able to sell the same property multiple times because investors failed to verify the actual ownership structure and mortgages on the project. A full review of these arrangements and corporate governance would have flagged these issues early on.

Thailand’s real estate sector is experiencing profound restructuring due to economic pressures and stringent regulatory amendments. The Foreign Business Act (1999) and Condominium Act (1979), which restrict foreign ownership, have been recently tightened to enhance market transparency. Developers often engage in complex restructuring maneuvers, such as mergers, acquisitions, and debt refinancing, which can obscure their financial health and complicate ownership rights. These systemic loopholes create significant risks for investors, who may face financial losses and legal challenges; and for developers, who might struggle with financial stability and project completion. Developers can also fall prey to unscrupulous foreign investors, as seen in Thailand in 2021 or in Singapore in 2020 where developers were defrauded by a foreign investor who falsified financial guarantees, leading to a stalled project and legal entanglements. Such issues could have been avoided and prevented with thorough monitoring by an independent team.

Due diligence should include checking for shareholder arrangements, financial stability, mortgages, and legal frameworks surrounding the project. These checks can expose red flags like hidden debt, unsecured mortgages, or changes in partnership shares. By performing these checks, investors can avoid being caught in a cycle of fraud, delays, or loss of assets.

In conclusion, thorough due diligence—including understanding foreign ownership rights, partnership structures, and financial disclosures—could have prevented these major issues.

Prevention is Key to Protecting Your Investment

From a security and investigation standpoint, the key to safeguarding investments in Thailand’s property market lies in proactive risk assessment and thorough due diligence. By examining every aspect of the project before committing capital—background checks, financial audits, title verification, and local law consultations—investors can identify potential risks and avoid falling victim to fraudulent schemes. When fraud does occur, investigation services become essential in tracking down hidden assets, securing evidence for legal claims, and recovering lost funds. Ultimately, prevention is better than cure, and in the high-stakes world of real estate investment, that ounce of prevention can make all the difference.

Legal and medical challenges for international security teams

Southeast Asia, a region known for its diverse cultures and regulatory frameworks, presents unique challenges for the deployment of international protection teams. Each country in the region has its own set of regulations governing the use and authorization of security equipment and emergency medicines, making it imperative for international teams to be well-versed in local laws. In Thailand, the Department of Provincial Administration oversees the regulation of security services, ensuring their compliance with national safety and security standards. For emergency medicines, the Thai Food and Drug Administration (FDA) regulates their importation, distribution, and usage.

One notable regulation in Thailand is the Private Security Business Act B.E. 2558 (2015), which mandates that all security services and personnel must be registered and licensed with the relevant authorities. Additionally, the Drug Act B.E. 2510 (1967) requires that all pharmaceutical products, including emergency medicines used by security teams, must be registered with the Thai FDA. This includes the requirement for foreign medicines to undergo rigorous testing and approval processes before they can be used.

Equivalences in Protective Gear and Emergency Medicines: A Technical Challenge

A critical aspect of security and medical authorization is the concept of equipment and molecular equivalence. This refers to the recognition of protective gear and medicines that meet the same safety and operational standards but may be produced by different manufacturers or under different names. For example, while bulletproof vests in the United States are typically certified by the National Institute of Justice (NIJ), in Thailand, protective equipment must meet the standards set by the Ministry of Defense. In this scenario, a foreign protection team must ensure their gear meets the Thai standards or risk delays, seizures, or fines. In reality, bulletproof vests can easily be purchased in Thailand, however the internal fitting of plates are illegal to purchase and are considered weapons in Thailand. Being in this industry for a while now Compliancia has witnessed some very odd techniques to counter that, having seen security teams purchase cheap Chinese plates from Aliexpress smuggled through the border or even some putting thick plates of MDF wood… needless to say, proper verification of security equipment is necessary.

Case 1: Medical Challenges in Thailand – Epinephrine Injection (2018)

One real-life example occurred in 2018 when an international protection team was stationed in Thailand for a high-profile diplomatic mission. The team was carrying EpiPens—a crucial tool for managing anaphylaxis. However, they discovered that EpiPens were not available locally, and instead, epinephrine injection (USP) was the legal alternative under Thai law. Unfortunately, the team did not research this equivalence in advance, and during an emergency, they experienced significant delays in obtaining the right medication. The delay highlighted how knowledge of local equivalents and legal standards in medical supplies is essential for life-or-death scenarios. Had the team been prepared by consulting local professionals beforehand, they could have avoided the unnecessary panic and provided the necessary medical assistance promptly.

Similarly, the use of controlled substances like morphine for pain management and atropine for nerve agent poisoning are tightly regulated under the Narcotic Act B.E. 2522 (1979). Any emergency medicine—especially for foreign teams—must go through the FDA approval process before they can be legally administered. Failure to obtain the correct licenses or approvals can result in operational delays, undermining mission objectives.

International Cooperation: Bridging the Gap

To overcome these challenges, international protection teams must engage in close cooperation with local security and medical professionals. This collaboration ensures that foreign teams are adequately prepared and can navigate the local regulatory landscape effectively. Training sessions, joint drills, and knowledge exchange programs are essential components of this cooperation.

Case 2: Joint Training with Thai Authorities (2020)

In 2020, an international protection team partnered with the Royal Thai Police to conduct joint training exercises. These exercises focused on high-risk scenarios like VIP protection and counter-terrorism operations, providing valuable insights into local security standards and medical protocols. The training included practical demonstrations of locally approved equipment and detailed briefings on the regulatory process for medical interventions. For instance, during a simulated emergency, the international team had to work closely with Thai medical professionals to administer treatment using locally approved emergency medicines. This type of collaboration helped the foreign team become familiar with local medical regulations and ensured they were prepared for any potential real-world scenario.

The Role of Local Medical Professionals

In Thailand, it is mandatory for security teams to have a local medical professional, such as a nurse or doctor, on board when operating. This is because certain medical procedures or actions, such as the administration of injections or controlled substances, are legally restricted to licensed medical professionals. Even in life-or-death situations, security teams cannot perform certain medical interventions unless they have a licensed healthcare professional present. This limitation can be a significant challenge in emergency scenarios, where time is often of the essence.

Case 3: Life-or-Death Medical Situation in Thailand (2019)

For instance, during a mission in 2019, an international protection team faced a medical emergency when their client suffered a severe allergic reaction. The team, although well-trained in first aid, attempted to administer epinephrine but was informed that in Thailand, only a licensed healthcare professional could perform the injection. Luckily, a local medical professional onboard the mission stepped in to administer the required treatment under Thai law, saving the client’s life.

Legal Considerations for Security Services and Emergency Medicines in Thailand

In Thailand, the provision of security services and the administration of emergency medicines are tightly regulated. According to the Private Security Business Act B.E. 2558 (2015), only licensed security personnel are authorized to perform protective duties, and specific protocols must be followed to ensure operational safety and legal compliance. For emergency medical interventions, the Drug Act B.E. 2510 (1967) and the Narcotic Act B.E. 2522 (1979) outline stringent requirements for the use and administration of controlled substances and other emergency drugs.

For instance, during the 2021 ASEAN Summit in Bangkok, international protection teams had to undergo additional certification to comply with Thai regulations. This included training on the proper handling and deployment of security measures and emergency medicines according to local standards. Such measures, while potentially time-consuming, are crucial for maintaining the integrity of protective operations and ensuring the safety of all involved.

Conclusion

Successfully deploying international protection teams in Southeast Asia for a wide range of clients—whether foreign executives, diplomats, or high-profile individuals—requires more than just equipment and expertise. It demands thorough, technical planning across multiple fronts, from understanding local legal frameworks to adapting to regional security conditions. Pre-deployment research is vital to ensure teams know exactly what is legally permitted, especially when it comes to sensitive areas like emergency medical protocols, security regulations, and the equivalences in protective gear. For example, certain medicines used in life-threatening situations, like epinephrine injections or morphine, may not be accessible or permissible in the local market without special permissions. These are the high-risk details that, if overlooked, could mean the difference between life or death in critical moments.

In this high-stakes environment, international cooperation becomes the backbone of success. Teams must work hand-in-hand with local experts, such as medical professionals, security officers, and legal advisors, who possess essential knowledge of local laws, security landscapes, and emergency protocols. Their role in guiding foreign teams through the maze of regulatory hurdles and rapidly evolving situations cannot be overstated. This collaborative approach ensures that protection teams not only have the tools to perform but are legally compliant and able to respond effectively when every second counts.

This Generation Needs to Stop Flaunting Their Crypto

For decades, society has drilled into us the importance of financial discretion. From a young age, we’re taught that bank accounts are private, and the details within them are for our eyes only. It’s not just etiquette—it’s a fundamental part of protecting ourselves from fraud, theft, and even kidnapping. Banks themselves enforce this principle: modern e-banking apps now block users from taking screenshots of account details. This feature serves as a protective barrier, reminding us that our financial information is not meant to be broadcast.

Yet, despite this longstanding habit, a baffling trend has emerged among the younger generation: the urge to show off their cryptocurrency wealth online, and cryptocurrency only. Screenshots of crypto wallets boasting profits, successful trades, and six-figure balances are paraded across social media platforms daily. At Compliancia, we regularly encounter cases of individuals flaunting their so-called “success,” completely oblivious to the risks they are inviting. It begs the question: why is it that we understand the need to protect traditional bank accounts, yet treat cryptocurrency, another form of money, with such reckless abandon?

Cryptocurrency enthusiasts often boast the decentralization and personal control over assets as reasons to embrace digital currencies. Ironically, many of these same individuals undermine their security by showcasing their holdings online. It’s not just unwise—it’s an open invitation to criminals.

Consider the irony: bank account balances are guarded secrets, but crypto wallets, which are equally if not more vulnerable, are treated like trophies to be displayed. Financial institutions have long understood the risks associated with sharing sensitive data, which is why they’ve implemented safeguards such as screenshot-blocking features. Meanwhile, many crypto exchange platforms and wallet apps fail to implement similar protections. This technological gap seems to encourage a culture of oversharing, particularly among younger users.

This isn’t just careless—it’s dangerous. Everyone knows that crypto transactions are anonymous and difficult to trace. While this feature may appeal to those who value privacy, it comes with a dark downside: once the money is gone, it’s nearly impossible to recover. Now imagine a scenario where a person who has flaunted their crypto wealth on social media is stopped in the street, beaten up, and forced to transfer their cryptocurrency. The anonymity of the transaction ensures the attacker is never found. Why would you even allow such an app on your phone without taking serious precautions?

The urge to flaunt wealth isn’t new, but the tools to do so have evolved. Social media amplifies this tendency, providing an instant audience for boasting. Unfortunately, the consequences of such behavior remain as dire as ever. Criminals no longer need to physically stalk potential victims; all the information they need is just a few clicks away.

In November 2024, Phuket police arrested four foreigners—two Ukrainians, one Armenian, and one Russian—for allegedly robbing a Ukrainian tourist of 8.5 million baht in Tether (USDT) cryptocurrency. The victim, was lured to a hotel room, overpowered, and coerced into transferring the funds under threat of violence. The suspects were apprehended shortly after the incident and charged with robbery and unlawful detention. This case underscores the risks associated with publicly displaying cryptocurrency holdings, as it can attract criminal attention and lead to severe consequences.

At its core, cryptocurrency is simply another form of money. The flashy graphics and jargon may make it seem different, but it holds the same value as cash or bank deposits. So why the disconnect? Why do so many people treat their crypto wallets as public achievements rather than private assets?

Part of the answer lies in the culture surrounding cryptocurrency. Many early adopters were drawn to the industry for its potential to democratize wealth and provide opportunities for anyone to succeed. Success stories in the crypto world are celebrated, often accompanied by screenshots of wallet balances or trading profits. This culture of public validation has normalized oversharing, creating a false sense of security among users.

However, crypto wallets come with unique vulnerabilities. Unlike bank accounts, which are protected by regulatory frameworks and customer support systems, crypto wallets are often unregulated. Lose access to your wallet or fall victim to a scam, and there’s no central authority to help recover your funds.

At Compliancia, we’ve seen firsthand how oversharing leads to devastating consequences. Social media posts that were meant to impress friends and followers often end up catching the attention of the wrong people.

These cases serve as stark reminders that privacy is not just a preference—it’s a necessity. Whether it’s your bank account, your crypto wallet, or even physical cash, the rule is simple: keep it secret. No one needs to know how much money you have, and broadcasting that information only increases your risk.

China’s Obsession with Photoshopped Perfection: A Security Risk?

In recent years, China has embraced a cultural phenomenon of heavily editing photos using advanced filters and beauty apps. From social media to official identification documents, presenting an idealized self-image has become deeply ingrained. While this trend reflects societal values of perfection and conformity, it also poses significant security and investigative challenges, prompting the Chinese government to crack down on overly edited photos for official use. Is this the right approach? Should other governments follow suit? And what are the broader implications for security in a world increasingly reliant on technology like facial recognition?

Traditionally, identification photos in China were simple, unaltered, and utilitarian. However, the demand for flawless images has surged in recent years, driven by social media trends and shifting beauty standards. Professional studios and apps now offer extensive editing services, enhancing everything from skin tone to facial structure. Companies like Himo have profited from this phenomenon, creating polished images for everything from job applications to official IDs. This pursuit of perfection, however, has created a paradox: while the photos may look stunning, they often fail to accurately represent the person.

This distortion has already led to issues. In cities like Fushun and Hangzhou, authorities have started rejecting photos for official documents that are too heavily edited. The rationale is clear: overly enhanced photos complicate identity verification processes, leading to mismatches and security vulnerabilities.

A critical challenge is the impact of these apps on reverse image searches. Investigators often rely on these tools to trace online personas to real-world identities. However, when photos are extensively edited or manipulated, particularly by different apps or studios with unique styles, the images become unrecognisable. This variability makes reverse image searches less effective, hampering efforts to track individuals across platforms.

For surveillance missions or even simple first-time meetings, these discrepancies present further complications. Recognizing individuals based on their appearance becomes tricky when their real-life features differ markedly from their edited photos. This can lead to missed targets in surveillance or misunderstandings in professional settings.

One of the most alarming implications of this trend lies in its impact on facial recognition technology. Many facial recognition systems rely on photos to map and compare facial structures. However, if the structure in a photo is significantly altered—or worse, can be digitally replicated—these systems may fail.

These risks underscore the need for robust safeguards in the development of facial recognition technology, such as requiring real-time scans or cross-referencing with unaltered identification photos.

By rejecting heavily edited photos for official documents, the Chinese government is taking a firm stance against the risks posed by this trend. While this may seem restrictive, it addresses legitimate concerns about security and authenticity. The question is whether other governments should adopt similar rules.

This is not just China’s issue—it’s a global challenge. As photo-editing tools become more sophisticated and accessible, their misuse will likely spread. Governments, tech companies, and individuals need to strike a balance between personal freedom and security. Potential solutions include:

China’s cultural obsession with photoshopped perfection highlights a broader global challenge. While filters and editing apps provide a fun and creative outlet, they also open doors to security risks, from catfishing to compromised facial recognition systems. Governments, companies, and individuals must recognize these risks and take proactive steps to address them. Whether it’s limiting photo edits for official documents, improving technology, or simply exercising caution, the solution lies in balancing the pursuit of perfection with the need for authenticity and security.