Foreigners Reported to Own Prime Tourist Areas

24 August 2009

A media source has reported findings from the Thailand Research Fund indicating that foreigners may illegally own about 90 percent of Phuket coastland territories through Thai nominees. Other tourist hotspots targeted for investment by foreigners are Pattaya, Hua Hin, Koh Phangan, and Koh Samui.

Government officials are also investigating purchases of land for rice farming by foreigners through Thai nominee companies in the North and Central regions of Thailand in breach of Thailand land law and the Foreign Business Act and which reserves rice farming for Thais only.

The study also found that some foreigners owned land through their Thai nominee wives.

Moreover, some lease agreements were exceptionally long, such as agreements for the duration of a person’s life.  

New BOI Regulations and Tax Incentives for Property Developers

24 August 2009

The Board of Investment announced new regulations and tax incentives for property developers in line with Thailand’s economic situation on 10 June 2009. The new regulations revise the requirements for BOI tax privileges for developers subject to the price of property units, spacing, and number of units.

To qualify for the tax breaks, property developers must set a price not over 1.2 million baht per unit for single detached homes or townhouses, up from 600,000 baht formerly. Each unit’s space must not be less than 70 square meters, and there must be not less than 50 units, down from 150 units.

Condominium units must be priced not more than 1 million baht per unit, and each unit with utilization space of not less than 28 square meters, down from 31 square meters, and the project must have not less than 50 units to be eligible.

Developers had expressed concern that it did not seem economically fruitful to construct condominiums at 1 million baht per unit in the business districts. In line with this, the director of the Thai Condominium Association said that developers had asked the BOI for tax privileges for condominiums divided into two sections, with one section comprising 50 units worth 1 million baht per unit, and another section with more expensive units. The BOI senior executive investment adviser said that the BOI would consider the developers’ proposal according to a newspaper source.

The developers stated that having two sections, with one section eligible for BOI privileges would encourage them to construct in the business districts.

The corporate tax waiver will be maintained for 5 years for developers who are afforded the BOI privileges for projects constructed in zone 1 comprising Bangkok, Nonthaburi, Pathumthani, Nakhon Pathom, Samut Prakan, and Samut Sakhon.

Developers acquiring the BOI tax privilege for projects constructed in zone 2 would receive a tax waiver for 8 years. This zone covers Chon Buri, Chachoengsao, Samut Songkram, Nakhon Nayok, Saraburi, Ayutthaya, Ratchaburi, Angthong, Suphan Buri, Kanchanaburi, Phuket and Rayong. 

Zone 3 covers the remaining provinces, including Lam Chabaeng Industrial Estate.

Since the new regulation became effective on 10 June, developers have applied for the tax privileges for 25 projects worth 1.8 billion baht.

Thai Companies Under Investigation by DSI

23 August 2009

Four Thai companies in Ayutthaya are the focus of an investigation by the Department of Special Investigation for purchasing land for rice farming on behalf of foreigners.

The DSI will examine the companies’ shareholding structures within the past 5 years to see if shares held by foreigners exceeded the maximum limit of 49 percent, which would be a violation of the law.

The investigation is being carried out after talk of large purchases of land for rice farming by foreigners, specifically from the Middle East, through their Thai nominee companies.

Some Thai farmers report that they are leasing land they used to own formerly, but which had been sold to foreign controlled Thai companies.

DSI investigator Pakorn Sucheevakul said that the unit had not found any large land purchases or transfer of land ownership in the Central and the Northern regions according to a media source.