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NEW CONSTITUTION - SAME PRINCIPLES
Basic Laws For Expats Remain Little Changed  

      Much has been written over the last few months regarding the laws on land ownership, leasing, visas, and other matters that affect the lives of foreign nationals who have decided to make Thailand their home. The most basic thing to understand is that generally speaking, the original laws on these important matters have changed very little over the years, and the real difference lies in the fact that the authorities are now enforcing some laws to ‘the letter.’

 Land  Ownership  Issues
     There is considerable confusion over the land ownership issue, but broadly speaking the new constitution states, as did the preious ones, that foreign nationals cannot own land. However, some exceptions do apply, especially where large foreign companies are concerned, such as those wishing to set up huge manufacturing facilities. Conversely, it may be possible under the law that a single small residential land plot of less than 1-Rai can be purchased by a foreign national for residential purposes only. But this does seem to depend on the particular Land Office with which you are dealing, so get good legal advice first. Thailand is a single unified nation, but the interpretation of laws vary in different Provinces and in different offices.

Previously, a wholly Thai owned company would not be investigated to determine if a foreigner controlling the nominee directors had "loaned" any of the directors funds with which to purchase property or become a director. Today, this arrangement may not be the best option, as the government authorities may consider this as manipulation of the Thai company, which they could regard as a serious infringement of the law's intent.

 Leasing  As  An  Alternative
       Because of the policing of the existing Land Ownership Laws, many potential property owners are considering it wiser to lease the actual land from a Thai company or individual, who would be the legal owners of the land. The property owner still owns the house 100%, and leases the land for a 30-year period. It is even possible to contract for an option to extend the lease for two additional 30-year periods.. However, it is not entirely clear tha a Thai court would force an heir to the original lessor to be bound by the promise of an extenstion of the lease, so this area of the law is not completely settled.

        Property brokers in Phuket are using a new program called the “Thai Long Stay Management Scheme” (TLM), with one of the main shareholders being the “Tourism Authority of Thailand” (TAT). This “Vacation Investment Program” (VIP) allows foreign investors to enjoy perpetual leasing of their land via 30-year lease terms, in a government-inspired effort to increase investment and spur Thailand’s economic growth. Further to this, the scheme allows for any new purchaser of the building to also receive a new 30-year lease and then go on with perpetual lease extensions.

 Long  Stay  Requirements
       Long stay requirements have been tightened considerably in a campaign to get rid of long term residents, who are abusing the intention of the government to limit long stays to desireable foreign nationals. The "visa run" foreigners were doing monthly border runs on tourist visas, and some may even be working and owning businesses illegally without the necessary “work permit” requirements. It is clear that “business visas” and “work permits” are becoming much harder to obtain, legally that is. The government has required that foreign nationals living in Thailand on "O" (non-immigrant) retirement visas maintain 800,000 baht in a Thai bank account (or document an equivalent pension).

 What  Will  The  Future  Hold?
      At a recent British-Thai Chamber of Commerce meeting the guest speaker was Mr. Peter Walker, one of the senior partners in the highly respected Grant-Thornton company of worldwide business researchers. Their “International Business Owners Survey" (IBOS), included all of the G7 countries, plus most of the SE Asian nations, and it yielded some surprising results, especially in regard to the rapidly expanding Chinese economy. While India had a 96% confidence rating for future trade with China, Thailand was lagging at 9% and Taiwan last at -19% because of their political conflict with China.   

      An important seminar on civil law took place in Pattaya a few months ago, where the keynote speaker was Thailand’s famous Professor Noranit Setabutr, who is largely responsible for the drafting of the Kingdom'snew constitution. It was Dr. Setabutr's view that approximately 80% of the 1997 Constitution of Thailand survived in the new law. More restrictions on corruption will be put in place, and there could be further modifications relating to the laws on land ownership by foreign nationals, the use of Thai “Nominee Companies” in real estate transactions, Visa regulations, and other issues affecting both expats and visitors to the Kingdom.



 
 
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