Bangkok Post – Legal rejig needed for foreign land leases

Proposal requires further study

The idea of allowing foreigners to lease land in Thailand for up to 99 years, with the land transferred from private ownership to state property, may require amendments to the state property law, says finance permanent secretary Lavaron Sangsnit.

Mr Lavaron said to implement such a scheme, a detailed study is needed, possibly requiring amendments to related laws. Public input would also be required, in accordance with the constitution, for new legislation.

Former premier Thaksin Shinawatra recently proposed allowing foreigners to hold long-term land leases for a period of up to 99 years.

Thai landowners wishing to lease their land to foreigners would first need to transfer the title deed to the Treasury Department for supervision.

Over the course of the lease, the Thai landowner would receive full payment from the foreign party, but would relinquish ownership, converting it to state property under the department.

Foreign lessees would have the right to own a lease for up to 99 years, after which the land would revert to state property under the Treasury Department.

Conditions would prohibit foreigners from purchasing land for agricultural purposes in competition with Thais, or developing affordable housing projects for low-income individuals without requiring a down payment, said Mr Lavaron.

No progress has been made on this concept at the policy level, he said.

For this plan to move forward, several laws would need to be revised, including Treasury Department regulations that limit leases to a maximum of 30 years, said Mr Lavaron.

“Extending the lease to 99 years would require legal amendments,” he said. “There are also laws concerning the transfer of state property that must be reviewed to determine whether land can be transferred from private ownership, setting specific conditions for foreign leasing. Amendments to the Civil and Commercial Code would also be necessary, along with defining the types of land use restrictions that may apply.”

The ministerial regulation on the utilisation of state property, issued in 2021 under the authority of the State Property Act of 2019, stipulates that “[a] leasing contract for state property shall not exceed 30 years, except for leases of state property for commercial or industrial purposes under the real estate leasing laws for commercial or industrial purposes, where leases exceeding 30 years must first be approved by the finance minister.”

The determination of rental rates or other compensation must be less than the rates approved by the director-general, according to the regulation.

However, in cases where the utilisation of state property involves a value exceeding 500 million baht from private entities, the rental rates or other compensation must not be less than the rates approved by the State Property Committee.

A source from the Finance Ministry who requested anonymity said the idea of allowing foreigners to lease land for up to 99 years faced opposition in the past, with critics arguing it was akin to selling the country to foreigners. However, long-term leases while maintaining Thai ownership addresses previous concerns, said the source.