'Clarity needed' in rules on foreigners

Developers and other experts are urging the government to establish clear regulations on land ownership to lure a greater number of foreign investors amid the coming trade liberalisation under the Asean Economic Community.

Clayton Wade, managing director of Premier Homes Real Estate, who has been in Thailand for more than 20 years, said that with the AEC’s full implementation in 2015 nearing, the government needed to act quickly on how it intends to handle foreign land and house ownership via Thai registered companies, as soon this issue would be dealt with by the Kingdom’s neighbours.

“The government needs to differentiate between large foreign corporations seeking large pieces of land for industrial use versus foreigners simply seeking to retire in Thailand to live in a single detached house,” Wade said at a seminar on the ownership of land and property projects in Thailand by foreigners, held recently by the Thai Appraisal Foundation in cooperation with the Thai Real Estate Business School.

Supin Mechuchep, managing director of property consulting firm Jones Lang LaSalle, said foreign investors were not significantly concerned about land ownership, but rather were interested on good returns on investment when doing business in Thailand.

“What we would like to see is clarity of local laws and regulations regarding land ownership for foreigners,” Supin said.

She added that the transparency index on property trade in Thailand had been improving only slightly compared with other countries in Asean such as Vietnam and Indonesia, which have improved their processes significantly, such as for applying for property and business licences.

Foreigners have invested in many property and related businesses in Thailand, including the development of office buildings, shopping malls and hotels.

Supin said the AEC would lead to great business potential among Asean members, thanks to the huge size of the market with a combined population of more than 600 million and total gross domestic product of US$300 billion (Bt9.5 trillion). 

The AEC will stimulate urbanisation and open up greater demand for new property projects, as well as the development of basic infrastructure such as logistics networks.

Compared with other markets in Asean, Thailand has advantages in the development of tourism destinations and health-related businesses, such as hospitals and beauty clinics.

“Regulations on foreign land ownership should not cause Thailand to lose its competitive advantage in property development to neighbouring markets,” Supin said.

Athip Peechanon, managing director of leading real-estate developer Supalai, said the 

authorities should not allow foreigners to own vacant land in Thailand or own any property in sensitive areas regarding national security. 

“The government should also preserve agricultural business and property development for the Thai people because of larger financial power of foreign investors,” Athip said.

He said the government could allow foreigners to own land in industrial estates. 

Foreign investors should also be allowed to own hotel businesses in Thailand, which needs to promote itself as a regional tourism hub, and all tourism facilities should be upgraded.

“The government should allow foreigners doing business in Thailand longer property leases, from 30 years currently to 60 or 90 years, if they want to encourage foreigners businesses to use Thailand as their regional hubs,” Athip said.

Ombudsman Sriracha Charoenpanich said the AEC would draw heavy investment capital into the country and many Thais who have economic limitations would need to sell their properties and assets to foreigners.

He said the government should arrange areas for optimal land use, as well as revise city zoning to be more systematic.