Thailand has a broad base appeal to foreign property buyers with its pristine beaches, the amazing hospitality of the Thai people and the up-and-coming infrastructure and development in progress. The demand will always be strong for affordable housing for retired persons and foreigners who desire a second home in the Kingdom.
The Thailand Real Estate Outlook in the 1st Quarter of 2013 issued by the Office of the National Economic and Social Development Board of Thailand are as follows:
- Economic growth expanded by 5.3% in 2013.
- The Real Estate Sector - Expanded by 4.4 % owing to an increased housing demand which continued to remain strong as well as an availability of personal loans for real estate.
- Transfers or dealings with real estate - In Bangkok and vicinity alone increased by 14.1%.
- New construction - Supply has arisen to meet demands and construction of real estate has increased owing to an increased credit extended to developers by 15.4% and 6.9% for new projects.
Enactment of the Foreign Business Act (FBA)
In 2007, the government of the day proposed amendments to the Foreign Business Act (FBA) (1999) which could cause a huge impact to investment. The FBA restricts the rights of foreigners to own or operate certain businesses in Thailand. The proposed amendments seeks the following:
- The proposed amendments would restrict the shareholdings and voting rights to 49 percent in List One and List Two of the law (business related to Thai culture or national security). Companies operating under List Three are exempted from the proposed amendment (generally considered in the service industry).
- Many foreigners have used nominee company structures to own their properties. These structures often have voting rights over 49 percent and may have objectives falling under List One or List Two. An inspection of the company documents can be done by your lawyer to review its operating status under the FBA.
It is important to note that these amendments have not been signed into law. A simple restructuring would be necessary to comply with the new law once it is enacted. Read more on the FBA and have your lawyer advise you accordingly.
Some foreign real estate owners using the nominee structures have fears about the legality of their real estate holdings if it was merely for the purpose of evading the general rule prohibiting foreign ownership of land.