Integrity Legal

In recent weeks it has come to this blogger’s attention that some significant changes with respect to the duration of leases in Thailand have been not only proposed, but are apparently nearing a point where they might be implemented. While The Nation has taken note of the fact that various stakeholders in the Thai real estate sector have welcomed the possibility of 99 year leases for foreign investors in the Thailand property market (a proposal which has many restrictions in and of itself, including the requirements that such lease may only be possible in large industrial developments operating with the proposed Eastern Economic Corridor or EEC). Meanwhile the Bangkok Post has reported that various activist groups in Thailand are opposed to the proposal that 99 year leases be implemented. In this blogger’s view the more important issue is the fact that the implementation of new laws regarding Thai commercial leases appears very near at hand. To quote directly from the aforementioned Bangkok Post article:

[T]he government approved the land rental extension to 99 years, a policy change that will affect about 10 million people who are in need of land, he said. The cabinet’s resolution was made in a bid to promote the eastern special economic development zone to draw international investment linking the country more closely to the Asean community and beyond…

It should be reiterated that the leases at issue are of a commercial nature and appear only to be possible within specified zones, but the change is notable since for years 30 year leases were the norm in Thailand and the recent changes seem to mark a substantial shift in policy thinking. It should be noted that recently proposed changes may make it possible for foreign nationals to obtain a 50 year lease in Thailand on residential property. Clearly, all of these developments bode well for those wishing to invest in the Thailand property market.

Not everything is developing in a positive manner for everyone with respect to the use of real estate in Thailand. In recent weeks, there has been a great deal of clamor arising from the fact that officials affiliated with the Thai government have announced plans to severely curtail, if not outright ban, street food vendors in the Kingdom. To quote a recent article on the Voice of America website quoting an assistant to the Governor of Bangkok:

“The street vendors have seized the pavement space for too long and we already provide them space to sell food and other products legally in the market,” the assistant said. “So there will be no let-up in this operation – every street vendor will have to move out.”

It should be noted that what may appear to be “street food vendors” may in fact just be sellers of food in an open air environment, but occurring on private property in Thailand. Therefore, this blogger does not expect that outdoor dining on traditional Thai fare will disappear any time soon. However, it seems logical to infer that street vendors will likely be making deals with owners of Bangkok property to use their land in order to sell food. A question posed by many: why are authorities in Thailand doing this? Many of those posing this question do so for different reasons. Some note that street food is part of the tapestry of Bangkok life. Meanwhile, others note that restricting street food could have a detrimental impact upon tourism. Although this blogger does not necessarily agree with all of the restrictions being proposed with respect to street food two things should be noted. First, the thoroughfares of Bangkok have a tendency to become crowded and street food vendors had more than a tendency to exacerbate this crowding. Second, Thai authorities have continued to note issues related to the raising of government revenue and it is this blogger’s opinion that the restrictions on street food may be the government’s initiative to, at least indirectly, encourage some vendors to engage in the more regulated economy. The Value Added Tax accounts for a significant portion of Thailand’s overall revenue. Therefore, if authorities can encourage more businesses to become part of the VAT system then it stands to reason that the government could raise further revenue. This blogger knows for a fact that there are those street vendors who do pay VAT, but the percentage of such individuals in relation to the overall number of street vendors is quite small. Therefore, it seems likely that while on the one hand Thai authorities are making the streets in Bangkok more easily accessible the upshot may be a benefit to government coffers in the long run.

Tags: 50 year lease in Thailand, 99 year lease in Thailand, ASEAN, Bangkok property, Bangkok Real Estate, Eastern Economic Corridor, eastern special economic development zone, Thai Property, Thai Real Estate, Thai street food, Thailand Property, Thailand Real Estate, Thailand street food, Value Added Tax, VAT
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