"thai Government Created New Way For Foreigners To Purchase Land In Thailand"

[Khun Jean]

has exclusive rights

There you go. Study this one and you will find out that there is no 'exclusive' right.

[gazza1]

has exclusive rights

There you go. Study this one and you will find out that there is no 'exclusive' right.

You havent written or left anything

[Dakhar]

Thailand is just that, Thai-land, and it will always be so....

Thus it shall remain the last place for forieng investment.

[churchill]

From today's Bangkok Post - Good news for Samui ?

Perpetual leaseholds cause stir on Samui

Thailand Longstay unit floats proposal

A little piece of paradise forever?

NINA SUEBSUKCHAROEN

Samui _ The real estate industry on the resort island of Koh Samui could receive a major boost if a plan to offer foreign buyers perpetual leases materialises.

The Vacation Investment Programme (VIP) is being offered by Thailand Longstay Management (TLM), a company set up by the Tourism Authority of Thailand (TAT) to promote long-stay tourism.

The TAT holds 30% of the shares in TLM, small shareholders including tourism business associations hold 15%, and the remaining 55% is held by Pol Col Ruamnakorn Tubtimthongchai, the company's chief executive officer.

TLM says that VIP will instill confidence in the real estate profession, which has come under heavy scrutiny on Samui, by granting licences to developers who pass certain criteria. Only these licensed firms will be allowed to use VIP services.

While foreigners can buy leasehold property in Thailand, leases are for 30 years only. They can be extended only after the 30-year term is complete but this is not always guaranteed. Under VIP, 30-year renewals would be available in perpetuity.

Chaiyakarn Sudampanthorn, managing director of Samui Estate Corporation, says that VIP could help reverse some of the damage caused by the "economic tsunami" that battered the resort island for the past three to four months.

VIP would also shore up foreigners' confidence in buying and leasing property in Thailand, especially after waves of negative publicity.

Foreign individuals and businesses have been on edge because of continuing questions about the use of nominees in establishing businesses, and policies toward foreign investment following last month's coup. Of particular concern in Samui has been a land scandal involving the marketing of many plots for which the title was questionable at best and downright illegal in some cases.

The resulting government crackdown on shady land sales will ultimately benefit all parties, says Adam Stanborough, Samui Estate Corporation's marketing executive.

"Isn't it better for the investor to buy land he knows is legally sound, backed by companies that are backed up by a state agency, or does he want to buy land which he doesn't know is backed legally?"

Buyers of perpetual leaseholds under VIP will have their own names registered on the title deed and should they sell the buyer obtains a new 30-year perpetual lease with his or her name transferred to the deed. Should the buyer pass away the lease is transferred to the next of kin.

The renewal fee for the perpetual 30-year lease is about 30,000 baht which is calculated at 1% of the rental value.

However, VIP will be open only for residential purposes.

An added benefit for VIP members will automatic one-year visas, a genuine perk in light of the new restrictions that took effect on Oct 1 to curb the abuse of the tourist-visa system.

Mr Chaiyakarn said his company would spearhead the VIP pilot project on Koh Samui after it is officially launched in Bangkok sometime next month.

"The government wants to tackle the nominee issue and make what is illegal legal," he said.

Samui was chosen for the pilot project because it is a small island and easy to regulate, he added. "They will expand to other tourist centres such as Phuket, Hua Hin and Pattaya in the future."

Mr Chaiyakarn acknowledged that VIP could drive up land prices on Samui if it gains wide acceptance, though the likelihood of prices reaching Phuket-style levels is slim since the latter is much more established as an international destination.

He added that many developers were interested in the VIP scheme. "They say it is good, in future they won't have to set up a company _ no need for nominees."

He is hopeful that half of the developers on the island will join the perpetual lease scheme. "In the end the remaining 50% will also have to turn to perpetual leases."

In the short term, however, the real estate industry on Samui is still engaged in damage control because of the land scandal. Mr Chaiyakarn says this has presented an opportunity for Thai investors to buy property at reasonable prices because foreigners have backed away until they see clearer signs as to how the government is going to deal with nominees and foreign ownership in general.

"Right now everything is on the market. [Foreigners] are saying, 'I don't want it, I want to sell, I'm afraid of getting investigated.' It's time to buy."

Noting the Thai preference for buying undeveloped land, Mr Chaiyakarn said residential plots with infrastructure at Bo Phut in the north of the island are going for four million to 12 million baht a rai, while beachfront residential plots are averaging 15 million baht a rai.

About 90% of the developers on the island are foreigners, with Thais just starting to enter the market. Mr Chaiyakarn said this reflected the attractiveness of Samui as a destination where many foreigners would like to have second homes.

On the web: www.thailongstay.co.th/vip

[Khun Jean]

again?

I thought this one was clear.

Churchill, are you a realestate agent, without work?

This stuff only makes it unclear to people what they can expect.

It should even be a moderators task to delete these messages as they are clearly in violation with forum rules.

[johnnyk]

Ah yes, the BKK Post...authors of the infamous one-day wonder about "new" property laws in Thailand. A non-story that caused widespread anxiety, indeed diarrhea in some quarters, and that no other newspaper picked up.

Yes, the BKK Post that happily led its front page with a "party atmosphere" story on the opening while other media noted the general disarray of airport systems.

And now shilling for private interests with advertising dressed up as news.

Not much cred left for me.

[dsfbrit]

JohnnyK and Khun Jean.

I felt the same about this as you at first- but if you remove all the marketting hype you can actually see in print the true problems this is trying to solve. I dont often see this being said so openly!!!

TLM says that VIP will instill confidence in the real estate profession, which has come under heavy scrutiny on Samui...

...

While foreigners can buy leasehold property in Thailand, leases are for 30 years only. They can be extended only after the 30-year term is complete but this is not always guaranteed.

...

VIP could help reverse some of the damage caused by the "economic tsunami" that battered the resort island for the past three to four months.

VIP would also shore up foreigners' confidence in buying and leasing property in Thailand, especially after waves of negative publicity.

Foreign individuals and businesses have been on edge because of continuing questions about the use of nominees in establishing businesses, and policies toward foreign investment following last month's coup. Of particular concern in Samui has been a land scandal involving the marketing of many plots for which the title was questionable at best and downright illegal in some cases.

...

The resulting government crackdown on shady land sales will ultimately benefit all parties, says Adam Stanborough, Samui Estate Corporation's marketing executive.

...

"The government wants to tackle the nominee issue and make what is illegal legal," he said.

...

In the short term, however, the real estate industry on Samui is still engaged in damage control because of the land scandal.

...

...foreigners have backed away until they see clearer signs as to how the government is going to deal with nominees and foreign ownership in general.

"Right now everything is on the market. [Foreigners] are saying, 'I don't want it, I want to sell, I'm afraid of getting investigated.'

[Nadia 2]

The 'Vacation Investment Program' not a government-backed solution for foreigners to invest in Samui Real Estate

In accordance with a government policy to promote the tourism industry as a means to stimulate direct foreign currency into the country and consequently to improve the economic status, the Tourism Authority of Thailand (TAT) has recently launched its 'Long Stay' campaign to develop and promote long term stay in Thailand. It is hoping to attract retirees from countries that have harsh winters and a higher cost of living to stay for extended periods in Thailand, as well as visitors traveling for medical and health services, international athletes who wish to make Thailand their training base as well as international students.

The 'long stay' campaign aims to offers to these groups, assistance and certain privileges like communication services, facilitating longer staying arrangement and a one-year visa. It does not create a new visa category, it aims to make it easier for these groups to apply for such a visa.

Following the government policy to promote long term stay in Thailand a Samui Real Estate agent is advertising property claiming that the Thai government has created for this purpose a new way for foreigners to purchase property in Koh Samui, offering 'perpetual leasehold' via a scheme called 'Vacation Investment Program' (VIP). This scheme says it allows foreign investors to enjoy 'perpetual' leasehold on property in Koh Samui via a recently established private company that will act as the agent for the foreigner.

In response to questions about TAT's involvement in the 'Vacation Investment Program', the TAT stated that foreign real estate investment is not part of a government policy to promote long term stay in Thailand or the TAT's longstay campaign objectives, nor does the TAT provide services for foreigners to invest in real estate on the Samui Island.

The private Thailand Longstay company limited (TLM) is a service provider, which is 30% owned by the TAT, and has been entrusted to promote Thailand's Longstay campaign and to promote Thailand as a prime tourist destination for foreigners who wish to seek a long-term stay in Thailand. Herein we find the connection with the Thai government. However, it is the private TLM Company Limited via its subsidiary private Thailand Longstay Property Management Company Limited that is associated with the 'Vacation Investments Program' on Koh Samui. Both companies failed to give the legal basis for this property purchase/ lease scheme or to produce any evidence of a government-backed method for foreigners to lease property long term ‘continuing or enduring forever'. Present lease law does not allow leases to exceed a period of 30-years.

Under the VIP scheme the foreign investor gives his money to the 100% Thai owned private VIP company that will register ownership over the property and in return gives a 30-year lease, which could be renewed in 'perpetuity'. However, like any other renewable lease constructions offered by any developer on the island, this cannot be guaranteed by law or the Royal Thai Government and the 'perpetuity' of the lease is merely based on a contractual renewal obligation.

The VIP scheme claims it 'allows' the foreigner's name (as the lessee) on the land title deed, which guarantees the perpetual nature of the lease contract. However, this is not a new development or new law, as any lease in Thailand exceeding 3 years must be registered at the local Land office and includes the registration of the name of the lessee on the title deed.

This new marketing scheme as offered by a Samui Real Estate agent has several legal implications and in practice it will encounter legal problems as the Land Code prohibits foreigners from purchasing land and prohibits Thai entities to acquire land as an agent of an 'alien'. Without proper governmental approval it must be deemed that the VIP will acquire the land under section 96 of the Land Code, as the owner in place of an alien, which contravenes section 113 of the Code.

The privileges and facilities offered under the Thailand Longstay tourism campaign are open for all foreign members and are separate from any VIP property scheme (TAT).

[Khun Jean]

The privileges and facilities offered under the Thailand Longstay tourism campaign are open for all foreign members and are separate from any VIP property scheme (TAT).

Exactly!

If you give my wife all the money she will give you a 30 years lease. And you have your signature on the land title, so you can feel sure that this deal is legitimate. And i just asked my wife, yes she will also extend it for you when the 30 years are finished. Isn't she sweet.

Is that a good deal or what!

[thaigene2]

The privileges and facilities offered under the Thailand Longstay tourism campaign are open for all foreign members and are separate from any VIP property scheme (TAT).

Exactly!

If you give my wife all the money she will give you a 30 years lease. And you have your signature on the land title, so you can feel sure that this deal is legitimate. And i just asked my wife, yes she will also extend it for you when the 30 years are finished. Isn't she sweet.

Is that a good deal or what!

Hey..I can do one better - my wife is a sweety too. And so is our landlady!

I will sublet to you our rented house for 30 years at a rate of 30,000 baht per month. You pay me upfront 7.2 million baht and I'll draw up the lease agreement which my landlady will sign as witness - we'll write your name on whatever you want. It's a great deal! Right in the middle of BKK near great schools and BTS!

We'll even waive the usual 2 month's deposit

That's what leasing is all about in the Thai property market folkd - it's a 30 year rental - and all 30 years paid up front. What a deal..

[gazza1]

The privileges and facilities offered under the Thailand Longstay tourism campaign are open for all foreign members and are separate from any VIP property scheme (TAT).

Exactly!

If you give my wife all the money she will give you a 30 years lease. And you have your signature on the land title, so you can feel sure that this deal is legitimate. And i just asked my wife, yes she will also extend it for you when the 30 years are finished. Isn't she sweet.

Is that a good deal or what!

Hey..I can do one better - my wife is a sweety too. And so is our landlady!

I will sublet to you our rented house for 30 years at a rate of 30,000 baht per month. You pay me upfront 7.2 million baht and I'll draw up the lease agreement which my landlady will sign as witness - we'll write your name on whatever you want. It's a great deal! Right in the middle of BKK near great schools and BTS!

We'll even waive the usual 2 month's deposit

That's what leasing is all about in the Thai property market folkd - it's a 30 year rental - and all 30 years paid up front. What a deal..

WHAT THE hel_l ARE YOU LOT GOING ON ABOUT? KILLED A DECENT FORUM.

[churchill]

The Scheme is going to be officialy launched next month so I suggest wait and see rather than being overly negative . Any scheme that simplifies the present laws must be worthwhile . Would TAT be involved in a dodgy sceme dreamt up by one agent on Samui . It may not be all new but a repackaging of existing laws - but if that makes it less complicated and easier to understand that must be good for the Thai property market . If it is packaged correctly I believe that people will feel much happier with the " perpetual lease " rather than the 30 year lease with a promise to renew or having to set up a Thai Company as many have done in the past . It may in effect be the same but packaged in a different way . After visiting the agent on Samui today -

I understand that to enter into this scheme a membership fee is paid which entitles you to , the 1 year visa , pick ups from the airport , insurance and other benefits .

Developers will have to be approved to enter into the scheme - Criteria unknown at prestent .

Existing Thai Companies that own a property may be able to transfer to the scheme - again for a fee .

[LaoPo]

From today's Bangkok Post - Good news for Samui ?

Perpetual leaseholds cause stir on Samui

Thailand Longstay unit floats proposal

A little piece of paradise forever?

"Isn't it better for the investor to buy land he knows is legally sound, backed by companies that are backed up by a state agency, or does he want to buy land which he doesn't know is backed legally?"

On the web: www.thailongstay.co.th/vip

"......backed by companies that are backed up by a state agency....."

Isn't that exactly what is so worrying ?

WHO on earth (read: Thailand) can or will trust a 'state agency' if a certain law (land owners' law) can be changed overnight by any ministry or a sudden-change of government ?

This is called 'wishful thinking' in order to promote the deeply sunken sales of real estate in the past months.

LaoPo

[gazza1]

The Scheme is going to be officialy launched next month so I suggest wait and see rather than being overly negative . Any scheme that simplifies the present laws must be worthwhile . Would TAT be involved in a dodgy sceme dreamt up by one agent on Samui . It may not be all new but a repackaging of existing laws - but if that makes it less complicated and easier to understand that must be good for the Thai property market . If it is packaged correctly I believe that people will feel much happier with the " perpetual lease " rather than the 30 year lease with a promise to renew or having to set up a Thai Company as many have done in the past . It may in effect be the same but packaged in a different way . After visiting the agent on Samui today -

I understand that to enter into this scheme a membership fee is paid which entitles you to , the 1 year visa , pick ups from the airport , insurance and other benefits .

Developers will have to be approved to enter into the scheme - Criteria unknown at prestent .

Existing Thai Companies that own a property may be able to transfer to the scheme - again for a fee .

Do you know the fee? Think this will be the decider if a good scheme.

Insurance...probably like ins offered on credit cards...always need upgrading.

Pick up...saves 300 THB.

Visa is good if living here but probably only good if you retire here beacuse surely most purchases are for investment (ie rental) or holiday homes so a vis is not necessary.

Fee?

[churchill]

I understood that to enter the scheme on buying a new property a fee of 1 million baht , but for existing companies to trnsfer the fee would be less - but this is only what I was told - I suggest waiting until official launch for correct info

[Khun Jean]

Ok i understand now.

I talked with the wife more and she agreed.

She will charge a fee also.

So it will be 30 years lease paid upfront and the fee of 1 million baht.

And she really really promises to extend the lease when it is finished.

But she did not want to say how much money you have to pay to extend it. But i think it will be around 500% of the current price.

A great deal! Please call now!

Only the first 100.000 customers can use this deal!

[Khun Jean]

WHAT THE hel_l ARE YOU LOT GOING ON ABOUT? KILLED A DECENT FORUM.

Sorry,

I saw the topic title '"thai Government Created New Way For Foreigners To Purchase Land In Thailand"' and i thought i was in the jokes section.

[gazza1]

WHAT THE hel_l ARE YOU LOT GOING ON ABOUT? KILLED A DECENT FORUM.

Sorry,

I saw the topic title '"thai Government Created New Way For Foreigners To Purchase Land In Thailand"' and i thought i was in the jokes section.

Youre a weirdo. Get off this post. You may not agree with VIP and I find it all a bit strange because it would need a change of law not just a POl Col to say "OK" but shut up unless you got anything decent to say.

PS Youve got a womans name. Are you a lady boy?

[churchill]

Khun Jean - Why do you continue to post unless you have something positive to add - Posts like yours that are not revelant should be deleted by the administrator ! It seems you have nothing better to do than attempt to make fun of a serious subject . I am sure that people reading this tread do not want to read your idiotic posts .

[Khun Jean]

Haha. A ladyboy with a wife and children. It is possible.

The problem with info like this on websites is that people really start thinking their are new possibilities that were not available before.

And that is just plain wrong. And even more wrong when a lot of money is charged.

But if some people believe this i made the deal simpler by offering my wifes services. It will be exactly the same. If you can not see the sarcasm and humor in that, well be my guest and go for the VIP program.

One thing i can guarantee you though. Nothing is changed in the law and no 'services' are necessary to be able to get a lease and or a visa. In short it is a 'service' to take your money and you get nothing valuable in return.

Ok and now for something decent to say.

Please don't believe this cr@p and start reading official Thai government websites and information.

[Khun Jean]

Khun Jean - Why do you continue to post unless you have something positive to add - Posts like yours that are not revelant should be deleted by the administrator ! It seems you have nothing better to do than attempt to make fun of a serious subject . I am sure that people reading this tread do not want to read your idiotic posts .

Sorry for getting cynical when i read about the 2000th post about something new in the law and that 'now it is possible to buy land for a foreigner'

The posts you made about the VIP is already against forum rules. The one that says not to post information that is false. And you posted an url to this company that is offering false information, also against forum rules. I have nothing against it because i find url's an easy way to point people to information. You did bring up the case of something being against forum rules.

Let a moderator decide!

Slowly this forum is changing from one that has accurate information to one that is filled with nonsense and plainly wrong information. No problem when it is in the 'pub' but here!!

It would be in the interest of the people running this board to delete ALL the nonsense about property laws from this particular forum.

But i understand that it generates a lot of traffic. Offer some hope about owning land and there are enough people who believe it, because they desperatly want it.

Some might even say 'I read it on ThaiVisa, so it must be true'.

There is a conflict between how many visitors and correct information.

A difficult business decision.

And to respond to you mentioning 'idiotic posts'.

It is not even as idiotic as the ones you posted. You were misled by the official sounding words that were used. The ones you take serious and i have to laugh about.

But don't take my word for it, read about the subject a few weeks more.

And, no i dont want to quote 'dragonman', 'nadia2' and a lot of others. It is not what people want to hear. It is depressing.

So instead people believe the ones that give hope, and possibilities for the future.

Shall i do a test and write a topic called 'Government announces new 5 year visa. Available for everyone'. I guess it will have a few thousand viewers very fast. But that would not make it true!

I am only trying to prevent that when someone reads this information and starts to believe it. By repeating that information, what you did, it will only make matters worse.

Most have no other references and the texts that these VIP people use are written very well to give the feeling it is all legitimate and according the law.

Which of course it isn't.

[churchill]

Khun Jean

YOU 1st raised the case of a post being against forum rules , my post was a sacastic response .

Your post -

"again?

I thought this one was clear.

Churchill, are you a realestate agent, without work?

This stuff only makes it unclear to people what they can expect.

It should even be a moderators task to delete these messages as they are clearly in violation with forum rules. "

and no I am not a real estate agent .

I thought this was a discussion board - Not a competition to see who is right or wrong .

Nobody knows what will be announced in a few weeks - maybe there will be an announcement with an ammendment of the current law . Who knows lets wait and see .

[dsfbrit]

I understand it may be upsetting that people attack the topic of this thread.

I do however believe that people who attack this kind of report provide a very very valuable service.

Why?

Consider my situation.

4 years ago when I was considering retiring to Thailand, I went to many many Estate Agents; read all I could in the newspapers; attended Expat club meetings; spoke to lots of people including other Expats and lawyers etc...

All of the sources said the same thing. Foreigners can ‘own’ land in Thailand.

The Estate Agents even pointed me to articles in various publications (similar to this article) saying that the land laws were being ‘liberalised’ and pretty soon new legislation would appear to allow farang to own land directly, but at the moment it was best to use use the company route.

The ONLY downside to the company route – I was told by everbody I spoke to – was that the company route meant you had to pay 15000 baht a year to have the accounts produced.

I remember seeing posters on the roadside in Pattaya saying this as well ‘foreigners can own land’

In the local letters pages and national papers there were positive letters and information relating to company/land ownership.

I did not hear one (not one) , person say that ‘It is illegal for a farang to own land in Thailand’.

I have a wry smile when going to the Expats club.

4 years ago (even 2 years ago) they had expert speakers talking about the company route. Then, unlike now, the word ‘illegal’ was not mentiond once. Now every ‘expert’ mentions that word all the time!

I only wish I had known about Thai Visa before I was coerced/encourage/suckered – you choose the word - into ‘owning’ my land in this way.

If only I had read a thread like this suggesting ‘solutions’ to a farang land ownership

problem - with the negative comments – I would have questioned a lot more the information I was given.

Quite simply I, like many others, would not have ‘bought’ land and now have the headache of what to do about it.

I hope it is realised that during the course of today, this article and similar articles to that has posted here, will be shown to Farang by Estate Agents up and down Thailand and also emailed to prospective Farang clients abroad, to reinforce the view the ‘land ownership laws in Thailand are being liberalised’.

Used in a similar way to the methods used on me 4 years ago – to allay any concerns I may have about investing in land in Thailand.

To the non-seasoned Expats like I was then (not now!) these articles are at least misleading and some may use stronger language than that.

Sadly many of these Farang, like me 4 years ago, wont have th benefit of logging into this topic in TV and seeing all sides.

So I thingk its important we have these reports like this posted here so that people - like me 4 years ago - can read the negative comments as well.

Have a nice day posters

[gazstuart]

Yes, I think the key wording that was missing from their statements pertaining to owning land was "IN YOUR OWN NAME" and I agree with you that the local publications could be misleading also - I noted at the time of reading articles myself that they had a 'disclaimer' at the bottom of their page!

Unfortunately I found that the expats club was full of armchair experts who each had a different theory on the subject - I left there often feeling more confused about the whole subject when I first got here.

After reading this thread I called a decent real estate agent in Pattaya (Paragon) and they told me straight up - foreigners can not own land in their own name... but they do go on to explain that if we were to buy in a company set up, what the potential risks are involved - they even went as far to explain that its simply a loophole in the law and it is actuall

Although I'm relatively new to this forum I can see that a lot of people who post are somewhat "anti-agent" and perhaps some with very good reason it may transpire - but I just wanted to express my own opinion that some are actually working in the right manner it would seem.

[Nawtilus]

The Nation real estate magazine states that in actual fact foreigners can still own real estate...or can have a company of which they are 49% shareholder...but only for land sizes of 1 rai or less and if it is for the purpose of a residence for the director.

This is stated as being from the Thai government....so, does anyone know where to find in the Thai government literature of confusing shiit....to find this actual statement ?

If it is true and can be found, then simply take the document and references as to where it is found, website etc with you to your lawyer or land office and show it to them and get it done, but fairly important to 'actually' find it for yourself first I would think.

[sriracha john]

Would TAT be involved in a dodgy sceme dreamt up by one agent on Samui.

ABSOLUTELY, they would. They've been losing credibility for quite some time.

Longstay and Elite and other Thaksin scams are all due to come under close scrutiny and possible dissolution...

http://www.thaivisa.com/forum/index.php?s=...st&p=955893

[Sunbelt Asia]

The Nation real estate magazine states that in actual fact foreigners can still own real estate...or can have a company of which they are 49% shareholder...but only for land sizes of 1 rai or less and if it is for the purpose of a residence for the director.

This is stated as being from the Thai government....so, does anyone know where to find in the Thai government literature of confusing shiit....to find this actual statement ?

If it is true and can be found, then simply take the document and references as to where it is found, website etc with you to your lawyer or land office and show it to them and get it done, but fairly important to 'actually' find it for yourself first I would think.

http://www.property-report.com/archives.ph...6&date=0610

Cynthia Pornavalai, Partner and Head of Banking and Finance Group, Tilleke & Gibbins

We spoke to her in September about the recent repercussions of the May 15th Land Department directive requiring greater scrutiny of land purchases by companies with foreign investors.

Cynthia Pornavalai, Partner and Head of Banking and Finance Group, Tilleke & Gibbins International Ltd

Cynthia M. Pornavalai is a partner in the Commercial Department of Tilleke & Gibbins International Ltd. She specializes in Banking and Finance, Mergers and Acquisitions, Construction and Property, and Corporate Restructuring, and has written many articles and made presentations on these subjects. She occasionally lectures in Business Law at Thammasat University and Schiller-Stamford International College in Bangkok.

We spoke to her in September about the recent repercussions of the May 15th Land Department directive requiring greater scrutiny of land purchases by companies with foreign investors.

Has there been a lot of inaccurate reporting regarding the new regulations?

I don’t know if the press has been inaccurate or not – it all depends on what you read. I’ve read some interviews with lawyers and some consultants saying ‘this structure would do and that structure would do.’ This made me raise my eyebrows – it depends on what you read and in what context. The press, with regard to foreign shareholding of companies and the foreign ownership of land, is very hot. These kinds of structures have been around for a long time but because of the present Shin and Temesak deals have come to the fore.

A few of months have passed since the regulation was announced, what do you think the impact has been?

Because there was so much confusion the initial reaction of the land office was not to register the titles of land of companies that had any foreign shareholding at all. They didn’t know how to apply those regulations. Later on, on July 15, there was a clarification as to how this regulation should be applied and what document threshold was required from the applicant. That clarification was actually not publicly noted. It says that if it is for less than one rai, it is all right for foreigners to own up to 49%, which is like it used to be. When the May 15 regulation came out, the general interpretation was that foreigners couldn’t be part of companies that own land. The July clarification says that for less than one rai and if the land is going to be used as a residence for the company’s director, then that’s fine and will not be subject to the so much scrutiny.

Why do you think the clarification was issued? Was there pressure from somewhere?

There could have been. I don’t know the inside story of it, but it could have been pressure plus the confusion. The land office didn’t know what to do at that time. For fear of that they might break the law, they either applied strict interpretation of the regulation, or simply sent everything back to the land department in Bangkok.

So the message is that it is OK for a small private investor to have a house in Thailand, but a property developer must have active Thai involvement?

Even with smaller investors they want to see active Thai involvement. It’s just the level of scrutiny that’s different.

Has your business been affected?

It was for a very short period. We learnt about the second clarification in August – the other land offices were not aware of this clarification until the second week in August – and we were actually the ones trying the educate the officers. Whether business has been affected or not? We haven’t actually seen any impact because it was a very short period. We had clients who were trying to transfer titles and their transactions had to be put on hold when the notification came. At that time, my advice was to ‘wait and see,’ until the dust settles. Some were quite anxious and restructured their companies at a high cost.

Do you realistically see the crackdown widening?

I’ve spoken with some policy makers and it is not a crackdown they are focusing on, but more of the abuse of the law by certain sectors. I think the policy trend now is to come up with amendments to the law. Maybe not as far as we would want, with foreigners being allowed to directly hold land, but probably amendments allowing foreigners to get involved in certain sectors that have been closed up until now – like the service sector, for example. With respect to the land, I think it will stay the same, because it’s very close to the Thai people and a very political issue.

The debate on foreign ownership of property has now widened to encompass the whole of foreign investment in Thailand. Do you think it is putting Thailand at a crossroads with regard to how open a country it wants to be?

Among the developing countries in Asia, it is only really Thailand that closes out foreigners from participation in service areas. That actually results in nominee transactions and they want to prevent that, and so are coming up with structures that will do so. Like opening certain areas whereby foreigners can participate in, but the controls are not through shareholding, but in another manner. They are looking into those issues.

Various real estate agents have begun lobbying for a change in the law and have proposed things such as a limited freehold scheme and an extension of leasehold. What do you think the best solution would be?

The direct holding of land for foreigners may be very difficult – I don’t think it’s on the radar of policy makers right now. It would cause of lot of economic imbalance in society, so it’s something they would probably not be willing to do. Extending leasehold term is probably something that is more palatable to them. Also, designating certain areas where foreigners can own land has been suggested, but I don’t think it’s going to go that far, as it wouldn’t be interesting foreigners either. It would create an enclave and I don’t think foreigners would be interested in that.

There are still legal ways for foreigners to invest in freehold property in Thailand. Are people generally aware of what the options are?

Investors who come from abroad and do not have residency in Thailand get most of their information from agents and a lot of them are making misrepresentation. Some are saying that you can lease properties for 120 years, which is impossible under Thai law. When they come to us a lot of investors are not aware what the basic laws are in Thailand.

Could the whole situation be ultimately good for your business as people start to seek out higher quality legal advice?

Yes. We are quite expensive and don’t deal with nominee structures. We have had a long tradition of not offering ourselves as nominees. When clients come here we tell them from the outset, ‘please find a real Thai partner that you can trust and then come to us and we’ll structure the transaction.’

As a foreigner working in Thailand, do you think the rules regarding investment are fair?

In Thailand, things are very flexible. They have the law, but the law is actually applied in different ways. So far the authorities have turned a blind eye to infractions of the law, but if they want to enforce it, it’s there. There is a legal structure. Practically speaking it’s been so free, but the issue is very politicised at the moment.

[dsfbrit]

So the message is that it is OK for a small private investor to have a house in Thailand, but a property developer must have active Thai involvement?

Even with smaller investors they want to see active Thai involvement. It’s just the level of scrutiny that’s different.

An interesting post - thanks Sunbelt.

What does the 'active' mean above.

I suspect the answer will be as confusing as the 'active' in the recently introduced offside rule change in football!

Edited October 25, 2006 by dsfbrit

[churchill]

Could it be that this scheme , if it ever gets off the ground will be linked to the elite card as one of the benefits ? Maybe all these organsations , Thai long stay etc will disapear before long !

From today's Bangkok Post

'Pet projects' need to be re-studied

Boonsong Kositchotethana

It seems to be a move in the right direction for the government of Surayud Chulanont to put under the microscope the various high-profile economic stimulus schemes initiated during Thaksin Shinawatra's era. Some of these pet projects look fantastic on paper but have so far failed to deliver the lofty results outlined, while wasting a considerable amount of taxpayers' money. The Thaksin administration had stubbornly allowed these failed projects to continue without due regard to the huge costs and resources involved with little or no prospect of success, not to mention the chance to recoup investment.

Projects like the Thailand Elite Card, Thailand Longstay, Bangkok Fashion City, Kitchen of the World, are among those that have proved to be a liability for the country and need to be thoroughly re-examined by the current government. The Thailand Elite Card project perhaps serves as the best illustration. It was launched at the whim of Mr Thaksin and advisers, without a proper feasibility study. Ever since its launch in 2003 as a strategic tool to promote tourism, Thailand Privilege Card Co (TPC), a firm owned by the Tourism Authority of Thailand (TAT) with one billion baht in funding from the national coffers, has suffered a loss of over 550 million baht.

Mr Thaksin had set an ambitious target to sell one million memberships _ each at one million baht and entitling the holder to a range of privileges, including fast-track immigration clearance and multiple entry visa _ within the first five years of its introduction. To date, only 1,700 memberships have been issued.

Management of the TPC project has never been in good professional hands, has been marred by inconsistent corporate strategy and poor product image, while many of the TPC board members had links to Mr Thaksin or his Thai Rak Thai party.

Thailand Longstay, another grand tourism promotion scheme led by the TAT and launched in 2002, has also suffered a similar fate. With some 60 million baht in taxpayers' money thrown into the operating firm Thailand Longstay Co, it has shown no sign of producing results.

Like the Elite Card, the viability of the Thailand Longstay project _ which offers foreigners and tourists a chance to stay in the country over an extended period at company-operated properties _ has been questioned by the private tourism industry.

Bangkok Fashion City, a project aimed at promoting Bangkok as a fashion capital alongside New York, Paris, Milan and Tokyo, and establishing the Thai city as a leading regional fashion and design hub, has proved to be unsuccessful, as officials involved have admitted.

A whopping budget of 1.82 billion baht was drawn from the national coffers to kick the scheme off in February 2004, while the private sector contributed another 488 million baht to the project.

Regrettably, we have yet to see Bangkok elevated to the status of fashion hub in Southeast Asia by 2005, or that of the world by 2012, as spelled out in the project.

It is widely known that hundreds of millions of baht have been wasted on lavish road trips, exhibitions and other events which offer an intangible outcome to the industry but benefit only some parties like certain fashion houses, event organisers and some clothing firms.

The plan to turn Thai food into a ''world cuisine'' by next year, with help from the heavily state-funded Kitchen of the World initiative, has yet to come to fruition.

There has also been criticism that the targets incorporated in the project _ to raise the number of Thai-food restaurants overseas to 20,000 by 2008 from about 10,000 currently, and in the process boosting the annual export revenue of Thailand's food industry by at least 20% to 400 billion baht _ are too ambitious.

The Surayud administration should be courageous enough to axe non-performing, poorly conceived and implemented projects like the Elite Card, to stop draining taxpayers' money. The government has to undertake a microscopic examination of other projects with worthwhile objectives and potential in enhancing our economy like the Kitchen of the World, devising their implementation details and putting professionals, not cronies, on the job, and allocating resources to ensure they can contribute effectively to our economic development.

Boonsong Kositchotethana is Deputy Assignment Editor (Business), Bangkok Post.

[gazza1]

I recently met a number of Korean businessman (the nation represents the biggest membership of Elite Card) and they are all happy with the product. The visa system works and has never been questioned at immigration.

VIP will have nothing to do with Elite. It is in competition and will offer all the basic benefits of Elite with the benefit of perpetual lease on land

HOWEVER, that will require a change in law.

What i dont understand is how, if a change in law is necessary and is very very very very very unlikely, can a launch be scheduled for November in Bangkok. Why would TAT put their name to something that needs a law change and will prob not happen. I know TAT have a bad name but at least Elite is up and running. Why would an agent put their time and effort in to something, announce it to the world when it needs a law change. Why would a Pol Col put his name............

You see my point.

So although i think it unrealistic VIP will happen i think lets see if the launch happens in Nov.

If it all goes ahead and a change in law happens then great for economy. If not then TAT will lose face, the agent is finished and Pol Col moves on to another scheme.

PS Is a change in law necessary.....at end of day it is not a freehold being offered but a leasehold.

Could it be that this scheme , if it ever gets off the ground will be linked to the elite card as one of the benefits ? Maybe all these organsations , Thai long stay etc will disapear before long !

From today's Bangkok Post

'Pet projects' need to be re-studied

Boonsong Kositchotethana

It seems to be a move in the right direction for the government of Surayud Chulanont to put under the microscope the various high-profile economic stimulus schemes initiated during Thaksin Shinawatra's era. Some of these pet projects look fantastic on paper but have so far failed to deliver the lofty results outlined, while wasting a considerable amount of taxpayers' money. The Thaksin administration had stubbornly allowed these failed projects to continue without due regard to the huge costs and resources involved with little or no prospect of success, not to mention the chance to recoup investment.

Projects like the Thailand Elite Card, Thailand Longstay, Bangkok Fashion City, Kitchen of the World, are among those that have proved to be a liability for the country and need to be thoroughly re-examined by the current government. The Thailand Elite Card project perhaps serves as the best illustration. It was launched at the whim of Mr Thaksin and advisers, without a proper feasibility study. Ever since its launch in 2003 as a strategic tool to promote tourism, Thailand Privilege Card Co (TPC), a firm owned by the Tourism Authority of Thailand (TAT) with one billion baht in funding from the national coffers, has suffered a loss of over 550 million baht.

Mr Thaksin had set an ambitious target to sell one million memberships _ each at one million baht and entitling the holder to a range of privileges, including fast-track immigration clearance and multiple entry visa _ within the first five years of its introduction. To date, only 1,700 memberships have been issued.

Management of the TPC project has never been in good professional hands, has been marred by inconsistent corporate strategy and poor product image, while many of the TPC board members had links to Mr Thaksin or his Thai Rak Thai party.

Thailand Longstay, another grand tourism promotion scheme led by the TAT and launched in 2002, has also suffered a similar fate. With some 60 million baht in taxpayers' money thrown into the operating firm Thailand Longstay Co, it has shown no sign of producing results.

Like the Elite Card, the viability of the Thailand Longstay project _ which offers foreigners and tourists a chance to stay in the country over an extended period at company-operated properties _ has been questioned by the private tourism industry.

Bangkok Fashion City, a project aimed at promoting Bangkok as a fashion capital alongside New York, Paris, Milan and Tokyo, and establishing the Thai city as a leading regional fashion and design hub, has proved to be unsuccessful, as officials involved have admitted.

A whopping budget of 1.82 billion baht was drawn from the national coffers to kick the scheme off in February 2004, while the private sector contributed another 488 million baht to the project.

Regrettably, we have yet to see Bangkok elevated to the status of fashion hub in Southeast Asia by 2005, or that of the world by 2012, as spelled out in the project.

It is widely known that hundreds of millions of baht have been wasted on lavish road trips, exhibitions and other events which offer an intangible outcome to the industry but benefit only some parties like certain fashion houses, event organisers and some clothing firms.

The plan to turn Thai food into a ''world cuisine'' by next year, with help from the heavily state-funded Kitchen of the World initiative, has yet to come to fruition.

There has also been criticism that the targets incorporated in the project _ to raise the number of Thai-food restaurants overseas to 20,000 by 2008 from about 10,000 currently, and in the process boosting the annual export revenue of Thailand's food industry by at least 20% to 400 billion baht _ are too ambitious.

The Surayud administration should be courageous enough to axe non-performing, poorly conceived and implemented projects like the Elite Card, to stop draining taxpayers' money. The government has to undertake a microscopic examination of other projects with worthwhile objectives and potential in enhancing our economy like the Kitchen of the World, devising their implementation details and putting professionals, not cronies, on the job, and allocating resources to ensure they can contribute effectively to our economic development.

Boonsong Kositchotethana is Deputy Assignment Editor (Business), Bangkok Post.