CHIANG MAI – Since the country reopened after the COVID-19 pandemic, a group of Chinese investors have entered the Chiang Mai real estate market to build housing projects to meet the demand of the Chinese population. This has led to the emergence of villages in Hang Dong and San Kamphaeng districts where 100 percent of the residents are Chinese. This has also led to a widespread practice of registering companies that are essentially nominee companies.
The Thai government, under the leadership of Chiang Mai Governor Nirant Pongsitthavorn, has attempted to address this problem by instructing relevant officials to investigate and confiscate and auction off all projects operating in this manner.
Subsequently, the authorities found two residential projects to be in violation of the Land Law: 1. the Baan Fah Luang project in San Kamphaeng district and 2. the Rak Chiang Mai ICM RESORT residential project in Ban Waen sub-district, Hang Dong district, by Chiang Mai Jiayuantai Zhongyouqian Gongsi Co, Ltd. and Ai Chiang Mai Thai Zhongyouqian Gongsi Co, Ltd.
Both projects involve registering a company and allowing a Thai national to hold shares in the company on behalf of a Chinese national (nominee) so that the Chinese national can legally acquire land and property in Chiang Mai.
Arak Kampanatbovorn, head of the Registration Department of the Chiang Mai Land Office, told Prachachat that the relevant government authorities in Chiang Mai are currently focusing on protecting the rights of Thai people and strictly enforcing the law to prevent foreigners from owning land, as well as conducting intensive investigations into legal entities seeking to set up real estate companies in Chiang Mai.
This includes the Rak Chiang Mai or ICM RESORT project, which has been ordered by the Chiang Mai Governor to sell eight houses and plots of land within 180 days from 4 July 2023. All relevant authorities will investigate whether the new buyer and transferee of the property is another foreigner.
If the property cannot be sold at auction within 180 days, the Chiang Mai governor, acting in place of the Director-General of the Land Department, has the authority to sell the land and collect a 5 percent fee of the sale price, under Section 50 of the Land Code.
“It is noted that following the enforcement of the law against the Rak Chiang Mai ICM RESORT and Baan Fah Luang projects, the volume of transactions in the form of company registrations, which are essentially nominee companies, has decreased significantly.”
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