Thailand’s Finance Ministry has been encouraged to expedite an amendment bill that would increase land leasing from 50 years at present to 99 years.
The amendment, which will revise the 1999 act on lease of immoveable property for commercial and industrial purposes is instrumental to the State Railway of Thailand’s debt restructuring plan but could also help Thailand become a more welcoming location for foreign investment.
However, this plan wasn’t greeted warmly by everyone and The Bangkok Post noted that the Interior Ministry expressed concern about land price manipulation and also has worries that the new amendment could give foreigners more incentive to live in Thailand.
Foreigners are able to lease land in Thailand for 30 years and this agreement is renewable for another 30 years under the Civil Code but the act on lease of immoveable property for commercial and industrial purposes that was passed in 1999 specifically to encourage foreign investment, extending this limit to 50 years, renewable for another 50 years.
If passed, the amendment would see the SRT transfer some of its land, including a prime plot near Makkasan Station to the ministry’s Treasury Department, the newspaper explained. The ministry will help clear most of the debts accumulated by the SRT and manage the land’s development by renting it out to the private sector, including foreigners for up to 99 years.
The 50-year cap was deemed as unpalatable for drawing investors and that is why these plans have been drawn up. The current maximum lease terms were an obstacle to developing capital-intensive projects by the ministry who understand these can take long periods of time to break-even. However, by extending the lease terms, foreigners will be more likely to make the necessary investments in such projects.
