(MENAFN – Gulf Times) Countries of the Association of Southeast Asian Nations (Asean) are taking steps to extend leasehold periods granted for foreign individual or companies for land in a bid to boost investment.
The Thai government recently approved 99-year leases for state land for industrial and commercial use to speed up the development of six special economic zones in the country, up from formerly 50 years.
However, the leasehold period for residential and commercial buildings outside the special economic zones remains at 30 years, extendable once for another 30 years, despite leading property developers in Thailand are heavily lobbying to allow 99-year leases for all land, similar to Malaysia and Singapore. The two latter countries are leading the way in the region in terms of long leasehold periods, with both unconditionally allowing 99-year leases.
“For Thailand, this would boost residential demand ahead of the Asean Economic Community,” said Thai Condominium Association president Prasert Taedullayasatit.
Another country that is changing its leasehold regulations is Vietnam. A new law, expected to come into force this July, stipulates that foreigners can extend their property ownership after the current 50-year period up to an additional 50 years. This regulation comes as Vietnam is opening its property market for the first time to foreigners and foreign companies, allowing them now to own a maximum of 30 per cent of units in any apartment building and a maximum of 250 houses in a given development. The only requirement to be allowed to buy property in Vietnam is simple: The foreign buyer must have entered the country legally. The market is expecting a surge in foreign buyers when the law kicks in as the Vietnam real estate market has more compelling yields compared to other Asian nations.
Cambodia, Myanmar and the Philippines, countries that experience fast rising demand of foreign property buyers, are making 50-year leasehold periods available to foreign investors, whereby concessional leases for development and industrial purposes can be granted by the state for up to 99 years. Cambodia’s real estate market has opened in 2010 to foreigners. However, modern serviced apartments and condo buildings, which normally come with a pool, gym and car parking, are a relatively new concept in Cambodia and remain few in numbers. For that reason, specifics of how many condos foreigners can own in one single building are still developing.
Myanmar changed its property regulations in 2012. Investors registered under the new Foreign Investment Law are eligible for a lease term of up to 50 years, with the option of two consecutive ten-year renewals. Investors may even be granted first lease terms longer than 50 years when investing in remote or economically underdeveloped areas.
Leasing land in the Philippines long-term is an option for foreigners or foreign corporations with more than 40% foreign equity. Under the Investor’s Lease Act of the Philippines, a foreign person or a company may enter into a lease agreement with Filipino landowners for an initial period of up to 50 years renewable once for an additional 25 years.
Laos and Indonesia, together with Brunei, have the shortest leasehold periods for land for foreigners, normally 30 years only. However, depending on the kind and size of business, and whether the land is part of a special economic zone, extensions are available in these three countries for up to 99 years, but it remains an individual government decision.