State strikes back: Illegal land purchases by foreigners targeted!

State strikes back: Illegal land purchases by foreigners targeted!

The Thai government has decided to step up measures against illegal land purchases by foreign investors. This is done to combat abuse of the legal framework that allows foreigners to acquire properties through front men, which is illegal under Thai law. The signing of a corresponding agreement between the trade and interior ministries should help to detect shell companies used by these investors.

Deputy Commerce Minister Napintorn Srisunpang has explained the problem of front men, who are often used to allow Thais to officially hold shares in companies while control is in the hands of foreign investors. These practices result in land being used for illegal businesses such as building hotels or agricultural projects. Thai entrepreneurs are therefore forced to compete in a highly distorted market.

Alarming statistics

The numbers are alarming: around 46,918 companies are suspected of having between 0.001% and 49.99% foreign shares. Of these, 55.49%, i.e. around 26,038 companies, are actively involved in trading in land and real estate. These developments raise not only legal but also economic questions.

In order to overcome these challenges, the Ministry of the Interior is planning real-time data comparison between the company register and the land registry office. This is intended to help better monitor and control the activities of the shell companies.

Penalties and new laws

The government has announced that it will increase penalties for illegal land purchases. These include, among other things, higher fines, longer prison sentences and the possibility of asset confiscation. Currently the maximum penalty is up to two years in prison and a fine of 20,000 baht (about 510 euros), but changes are being planned that would take a much tougher approach.

A new anti-money laundering law will also be introduced. Accordingly, so-called nominee transactions will in future be classified as intentional offenses, which could have far-reaching consequences for those involved. The effectiveness of these new measures remains to be seen, but the government is committed to improving the legal situation in the real estate sector and limiting foreign influence.

Further details on the legal framework and property rights in Thailand can be found in the comprehensive information from stefaninthailand.de.

Overall, the Thai government's initiative shows that protecting national interests and empowering local entrepreneurs is a priority while limiting the scope for illegal activities, which could benefit both the Thai economy and society.

These developments will certainly attract international attention, as the topic of foreign investments and their regulation is important in many countries. The Thai government's approach could serve as a model for other countries that have similar problems with illegal land purchases and their economic impact.

For further information on this topic, especially on the legal situation in the area of ​​property law in Thailand, we refer to the article by wochenblitz.com.