The Senate Standing Committee on Economy, Commerce and Industry has held a seminar on foreign property ownership in Thailand while citing the growing number of Thais holding lands on behalf of foreign nationals as its main concern.
At the Senate committee’s seminar, which took place at Government House, Ombudsman Sriracha Charoenpanich revealed two main concerns threatening national security – the first being drug abuse, which is an issue undermining the productivity of the nation’s human resources in the long run, and the second being the rising trend of foreign land ownership through Thai nominees.
According to reports, one-third of properties in Thailand, estimated to cover 100 million rai of land, are secretly owned by foreign nationals. Mr Sriracha said the illegal acquisition of land through loopholes in the law has long been practiced as it can increase foreign investments and stimulate the economy.
Due to the 1997 economic crisis and the subsequent downturn in local property market, the law was amended so that foreigners with a capital of at least 1 million dollars can obtain a special right to own lands. The Ombudsman elaborated that 90 percent of beach-front properties in Rayong, Prachuap Khiri Khan and Chon Buri now belong to foreign investors.
He said that foreign land ownership can be achieved through various means, such as marriage with Thai nationals and establishment of a domestic company. Legally, the total foreign ownership of a company cannot exceed 49%, but in practice, it is often found that more than 51 percent of the shares belong to Thai nominees appointed by foreigners.
Mr Sriracha thus recommended an amendment to the law controlling foreign real estate ownership as well as an increase in property tax to drive up the use and the value of land. He also added that collaboration between the Anti-Money Laundering Office and the Department of Special Investigation is needed to solve the issue in a sustainable manner.