Bangkok Post Thursday December 21, 2006 –
Property firms seek clarity on foreign buying
Excerpt from an article by NINA SUEBSUKCHAROEN
Sally Ann Lefley, an associate at the Bangkok-based firm McEvily
& Collins, said that investors should simply look to lease
land because the government has been enforcing regulations that
restrict foreigners from setting up companies to buy land.
''Just totally forget about trying to buy land through a Thai
company,'' she said. ''Things have taken place since the coup;
it got very, very strict thereafter. So if a Thai company wants
to buy a piece of land now, if it's 100% Thai, it's no problem.
But if there is a foreign shareholder or director then the Land
Office will investigate that company and check if the Thai shareholders
are actually nominees for the foreign director or shareholder.''
The maximum term of a lease in Thailand is 30 years and Thai law
allows one renewal of 30 years.
''You can still buy a house or a villa; it's just the land that
you can't actually buy,'' Ms Lefley said. ''So you can choose
to lease the house as well as the land or you can choose to buy
the house outright.''
However, she cautioned that once the lease expires, the house,
unless the lease agreement says otherwise, would actually become
the property of the landowner.
''So whereas before sellers and buyers were concentrating more
on freehold aspects, it seems that the sellers now are really
getting to grips with leases and putting in more provisions, not
only to protect themselves but also to protect the lessees,''
she said.
Even so, Ms Lefley noted that foreigners are not shying away from
buying land and houses as her law firm had feared.
''It seems more and more are quite accepting of the option to
lease. They don't seem too concerned about owning a freehold so
that they can pass it on to their family when they die; it seems
a lot are looking at using the property for themselves and not
looking to pass it down.''
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