BANGKOK: The Thai government’s plan to allow foreigners to own land of one rai (0.16 hectare) for residential purposes has drawn mixed reactions from various segments in the country.
Although the government’s aim is to woo rich foreigners to stay much longer in the country and help shore up the economy, some from academia, the private sector and non-governmental organisations say it may be only be a short-term solution that could push up land prices.
Government spokesman Thanakorn Wangboonkongchana had said that the Land Department was drafting a law to allow the land ownership by eligible foreigners.
According to a Bangkok Post report, the plan includes conditions such as investing at least 40 million baht for at least three years within designated sectors of the economy.
From now until 2026, the government hopes to attract more than a million such foreigners to Thailand.
If the plan is approved, the government hopes to have 1 trillion baht injected into the economy with an 800 billion baht increase in investments and another 270 billion baht in revenue collection.
Earlier this year in January, the cabinet approved rules to woo wealthy foreigners for lengthy stays with the aim to boost the economy and investment in the country.
The new regulations by the Interior Ministry and the Labour Ministry, offers work permits and long-term resident (LTR) visas to applicants.
The Interior Ministry’s package, which was published in Royal Gazette on June 2, will be available from September this year.
Thai Chamber of Commerce chairman Sanan Angubolkul said the long-term resident visa will be a boon to the construction and real estate development sector.
He said the sector’s annual value stood at 800 to 900 billion baht and the move could double it, contributing for some 8 to 9 per cent of the country’s gross domestic product (GDP).
He added that if 100,000 foreigners could be attracted to Thailand through the scheme, they would generate investments worth at least 4 trillion baht.
On the land ownership pla, Sanan suggested that foreigners should only be allowed to purchase first-hand land and property and can only resell it to Thai nationals. It should also only be allowed in designated zones.
Nipon Puapongsakorn, a distinguished fellow at the Thailand Development Research Institute (TDRI), said actually Thailand needed a comprehensive policy to shore up investor confidence as the country did not lack funds.
He said Vietnam had more free trade agreements than Thailand, which gives investors a wider market.
He added that investors also faced the “cost of doing business” due to numerous regulations and pointed out that Thailand faced a shortage of skilled labour.
“Foreign capital… so what? It’s short-term. The government must create an investment environment and improve laws to make investors feel it is worth doing business here,” he argued.
Pornpana Kuaycharoen, Founder and Coordinator of Land Watch Thai, said she totally disagreed with the policy.
“Who really benefits from this policy? It’s the rich people. Those who already own the majority of land in the country will make a profit from selling it to investors and make the problem of land ownership inequality in Thailand even worse,” she said.
“As a lot of Thai people still own no land, why should we allow foreign investors to take more of the country’s land?”
The Post also reports Somphop Manarangsan, president of Panyapiwat Institute of Technology, saying that the government needed to ensure the privileges extended to foreigners will bring long-term benefits such as technological development and innovations.
He said that to get foreign investments using land ownership as an incentive had been used in other countries.
“Due to the Ukraine – Russia war, it may attract some wealthy people, retirees or start-up firms. If it can have a multiplier effect on the economy, it should proceed,” he said.
However, he warned that Thais should not be hit by rising land prices due to the policy.