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(19/2008)

One of the agenda items for the 20 August nationwide tele-conference meeting of the Permanent Secretary of the Interior Ministry and the governors of every province instructed the governors to investigate the issue of foreigners acquiring land in Thailand. The objectives of the investigation are to identify whether foreigners have nominated Thais to buy land for them and with the purpose of evading tax. The use of a joint venture company to buy land without engaging in the real estate business will be a particular target of investigation. The governors may exercise power to investigate any transaction where there is reason to believe that Thais have acquired the land for foreigners.

The investigation is to look at the source of funds which the Thais use to buy land, as well as the source of funds of companies which buy land at a price which exceeds their registered capital with no collateral. Where foreigners take-on long term leases of land, investigations will focus on whether the land is used to operate a business which is restricted or prohibited under the Foreign Business Act.

This instruction reiterates the 21 July 2008 announcement of the Land Department requiring provincial governors to reinforce investigations into land transactions which are made to facilitate foreign ownership or possession of land. The investigation is requested to emphasize on those transactions involving long-term leasehold arrangements with foreign lessees, e.g., 90 years with a single up-front rental payment, and where title to the lease can be succeeded to by the lessee’s heirs. Investigations will focus on transactions in main cities and in provinces popular with foreign tourists.