Phuket Post :: Article :: A new property act would be the best legal way forward

Land ownership will always be a sensitive issue for Thai people, and there would be controversial political consequences for any government that tried to change the Land Code to accommodate foreign ownership.

While many foreigners elect to set up Thai companies, with a majority Thai shareholding, and thereby operate in a 'grey area' of the law, we believe the most practical and legal way to deal with the issue of foreign ownership would best be resolved by legislative means.

An act � similar to Landlord and Tenant Acts in other jurisdictions � and changes to the maximum term of a lease would provide proper protection for foreign lessees.

While providing an opportunity to foreigners to have more secure investments in Thailand, an act such as this would also soothe the sensitivities attached to the concept of foreigners �owning�, or indirectly owning, land in the Kingdom of Thailand.

Such improved leasehold legislation does not presently exist, so there will continue to be, as there has been for many years, debate on what constitutes a company that has been set up legally or illegally, and what is a good structure for investment in real estate by foreigners.

Unless there is a clear law that states foreigners cannot inject monies into a Thai company that has real estate assets, there will be opportunities for investment and ways of protecting investors who inject more monies than others into an investment.

Ultimately, the majority of a Thai company which owns land must have a minimum Thai ownership in any event. If companies are scrutinized when title is due to be transferred this will potentially slow transactions down where the companies do not meet the requirements the officers are looking for.

There is no indication that a real transaction with a real Thai company, set up correctly with real Thai shareholders and real foreign shareholders in accordance with the law, will be refused � but perhaps it will be subject to review.

Belmont Limcharoen and its attorneys are trying to encourage the concerned government agencies to look into the possibility of beginning the process of legislating for a Thai Landlord and Tenant Act.

Desmond Hughes is a partner in Belmont Limcharoen.
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desmond@belmontlimcharoen.com
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