Land Ownership Issues Cause Rage and Wars
The matter of a nation determining who should and should not be able to ‘own’ property is not simple, and therefore the reasons behind the rules of a property ownership system are naturally complex involving a balancing process between rights, resource protection, and cultural values. Wars have and continue to rage over land ownership rights indicating the importance humans and societies attach to geographical control and borders.
Social Media Forums and Comments Can’t Design a Fair Ownership/Investment System
Thailand receives its fair share of ‘social media’ and ‘market noise’ criticism in relation to its historically restrictive land ownership laws so far as foreign investment is concerned. Much of the commentary, like many comment forum threads and short text messaging environments, is ill-informed and lacks context with a healthy smack of self-interest included to boot, particularly by those who are keen to ‘own a bit of land’ for good, dubious, or a mixture of reasons. In order to potentially improve and develop a system, a healthy and balanced well-informed debate is most likely to provoke thought and innovation. The power and decision-making implementing a land ownership system ultimately rest with a state, together with all the inherent flaws and strengths of its system.
Internal and External Beauty Should be Cherished
Thailand is one of the most beautiful countries I have ever been to although admittedly I haven’t travelled as extensively as many others, and I am clearly biased in this opinion. I am fortunate enough to have elected to take a series of risks and life decisions, including some sacrifices, in order to be here. I am not alone in my admiration of the Kingdom and take comfort in the fact others feel the same. Just looking at Thailand’s landscape, its National Parks, coastal and inland scenery, rock formations, waterfalls, vibrant rivers and waterways, some remaining admittedly at-risk wetlands, and natural beauty it is easy to see why it is an attractive destination for short term and longer-term visitors. In sum, Thailand is, geographically speaking, approximately 513,120 km2 of precious natural resources. It is obvious that this ought to be protected. The burning repetitively analysed question is, how and to what extent?
In addition to surface beauty, Thailand has an inherent beauty that, as per many countries in the world, makes it uniquely attractive.
Beauty…
Beauty is in the ‘eye of the beholder’, and the beauty I see as I behold is a people who overall care deeply about their traditions; cherish family values; respect and permit multi-faith environments; are passionate about their history and struggles faced with the uprising, coup d’etats and political turmoil on a regular basis and in many respects are prepared to forego luxury and comfort if forced to choose between those and helping others. The generosity of spirit; smiling in the face of adversity and attempting to compromise even when feeling strongly about an issue. Possessing some of the world’s most interesting and diverse cuisine. I feel like I am writing an advertisement for tourism, but these descriptions easily fall off the keyboard onto the screen with good reason. On such basis, the ‘right’ be part of this should be, but isn’t always, highly valued by the so-called ‘market’, or more preferable as a measurement – the world populations’ views.
To be part of a community with so many attributes, shouldn’t come without some conditions.
…and the Beast
The ugly side is that which is reported more than the beauty because human nature is such that it typically looks for flaws. Many people spend much of their lives trying to re-train their minds to focus more on the positive than the negative, and that face indicates it isn’t so easy to do the former. Thailand does have racism, xenophobia, some persecutory practices/record, crime, social inequality, corruption, and environmental challenges. So do all other countries, to different degrees and in different guises.
Due to these issues, there should be some ‘compensation’ or ‘discount rate’ reflected in the conditions attached to being part of the community and possessing rights. How would this be reflected is, as per the above, a matter for the state which, depending on its political system, could or should be acting in the best interests of its citizens.
Developing and Protecting
Thailand’s formal introduction of restrictions on foreign ownership of land can be traced back to the introduction of the Land Code in 1954, which was preceded by-laws and debates on controlling ‘aliens land ownership’ including in 1949 a bill requiring ‘private firms or corporations more than half-owned by aliens to either get special permission for ownership from a board appointed by the Interior Ministry or else sell their land within 90 days.” [1] The framework of these restrictions continues but has evolved. Thailand’s land system is considered as a strong ‘model’ for developing other systems [2], and has sophisticated rules for land allocation, dividing public and private land, issuing land rights to empower its citizens, and restricting development in national forests and protected parks. There are instances of abuse, encroachment – alleged or actual, and there is a legal system which albeit has some challenges does provide a forum for recourse, compensation, and appealing erroneous decisions.
Foreigners Can Already Own Land in Thailand
Foreigners also do already have the right to own land in Thailand, but such right is confined to special circumstances with the relevant permissions [3]. Many commentators, foreign and Thai, do not appear to have read the Land Code when discussing the topic of foreigners and land ownership, resulting in exchanges based on false assumptions and premises.
So the question that is actually being debated, including now with Thailand recently introducing some further opportunities for foreigners, under prescribed investment conditions, is how much more liberal should Thailand be with the potential for foreigners to own land in Thailand by widening those rights and reducing the burden of the conditions?
Aligning Land Ownership with Policy and Culture
At this moment in time, Thailand has a need to stimulate and reinvigorate foreign investment due to the financial wreckage of the COVID19 pandemic on economic and living conditions. To change rules to entice investment requires sharp balance and a combination of short- and long-term thinking. The economy will improve again over time, tourists in large numbers will naturally return to Thailand because of the beauty briefly described above. In the meantime, what objectives could be met, and what issues could arise from liberalising foreign land ownership laws? Here are just a few:
Policy Benefits
Tourism
Thailand should not have to ‘work too hard’ to attract tourists given its recent successes but will need to overcome some issues caused by the pandemic. There is some sentiment that there is a less welcoming atmosphere due to political anti-foreign rhetoric and the rules during the pandemic for entering Thailand have, as per many other countries, been chaotic and punitive on families and visitors through no fault of their own. Tourism and land ownership are therefore not interdependent on the whole.
However, it should not be forgotten that the first visit to Thailand whether for recreation, constitutes an ‘act of tourism’ if that is what the VISA description states even if this evolves into investing in the business and migrating. Therefore, some ‘ownership’ incentives might be well placed if they are linked to some form of ‘conversion’ of tourists to official ‘holiday home investments’, which could be on a controlled and conditional basis. Condominiums are of course an option due to the law permitting foreigners to own them within a controlled quota but are not always attractive compared to landed properties.
Tourists who are converted to property ‘owners’ will naturally entice more visitors, on a regular basis, and will each day be spending their monies, whether generated internally or externally, contributing to the economy. It isn’t all upside though. Such tourists may not integrate into Thailand at all, live in tourist bubbles in resort areas, not understand or even respect Thai culture, and may set up systems whereby they control the monies coming into Thailand to support their lifestyle as the ‘bare minimum’, keeping their substantial investments outside in economies they see as less risky or better understood. Such ‘risk-hedgers’ should therefore not necessarily be conferred with ‘entitlements’ simply because they have ‘supposedly settled’ in the Kingdom.
Businesspeople
The pure ‘profit’ principle is not a good basis for simply allowing unfettered rights in a market, including the land ownership for the foreign markets. Instead, regulations and constraints, directing investment into places where it is needed, is a smarter strategy. Thailand has implemented incentives in its Eastern Economic Corridor where investments can be promoted under the Board of Investment, and whereby ‘managers’ of certain businesses can ‘own land’. This is all conditional on compliance. A violation of this ‘privilege’ has a different effect than a Thai citizen violating the law who will generally not suffer land confiscation unless in exceptional circumstances including seizure of assets to satisfy a debt or by committing an illegal act in relation to the issuance of the title of the land or its use. This means foreign investors are held to a higher standard of compliance which creates an incentive to comply but may create a disincentive to invest for fear of the doctrine of strict compliance resulting in asset and capital value loss.
A policy to determine which businesses are ‘good’ for the Kingdom, and which rules will provide sufficient asset security whilst requiring compliance with a certain and fair set of rules, seems sensible.
“Special” Cases
It perhaps doesn’t make sense to base a policy solely or mostly on money. Thailand has at various intervals, expressed a need for ‘foreign teachers’ and foreign workers in construction, and labour intense areas. Teachers who are treated as ‘tourists’ will likely act like a ‘tourist’, only entitled to rent a property or buy a condominium with restrictions, often preferring to ‘rent’ not knowing how their careers and security will play out. If Thailand has a need for more foreign teachers, then perhaps offering conditional land ownership rights, not based on their wealth, might be a policy worth exploring. The same can be said for other business areas where Thailand might wish to explore opening up labour opportunities to enable development, knowledge transfer, and training. Thailand has already made significant moves on improving its VISA application system and categories in that respect, and it is only, hopefully, a matter of a short while before most of this becomes digitised.
If I was being dishonest, I would place myself in a special category simply to try and market my potential for owning some land in Thailand. However, I own a share in an SME legal services and consultancy business, I have 2 Thai children who can one day own land if they can afford it or inherit it, and I own some condos and jointly own my home in Phuket with my wife albeit with some difficult structure to facilitate that. My family, pre-pandemic, have visited Thailand over 30 times spending not inconsiderable sums relative to their wealth and visitors in general, I have had guests visit me from all over the world, and by virtue of what I do I stimulate investment into the country by inward capital flows far more than facilitating exits. Notwithstanding, I can’t really make a case out for myself of ‘deserving’ to own land in Thailand, other than I would like to in order to provide security and peace of mind to my family. However, I can’t come up with a convincing argument that this is ‘in the best interests of Thailand’ because I am still here without such rights conferred upon me. Something must be good enough for me to do that. The case would change if I were to become a citizen with all that that entails.
Overall, Thailand has many decisions to make about its land ownership laws. However, it cannot be criticised as never having addressed the issue in the past, nor for trying to protect what is clearly a special resource deserving protection. If a good set of conditions, criteria, economic and social case can be made for liberalising some law here and there, then all for the greater good. However, rushed law is often ‘bad law’, and I, as currently a non-Thai citizen, hope that Thailand takes its time and gets the balance right.
[1] The Bangkok Post Chronicle of Thailand Headline News Since 1946 (EDM) pp.44
[2] Open Development Thailand Land (see: https://thailand.opendevelopmentmekong.net/topics/land/ last accessed (10 October 2021)
[3] Land Code Promulgating Act, B.E. 2497 (1954), as amended until Land Code Amendment Act (No.12) B.E. 2551 (2008) see sections 0086-0096 Chapter 8: Limitation of Aliens Right in Land
