The Board of Investment (“Board”) has recently issued the announcement of the Board of Investment with the subject of criteria for permission of the Promoted Entity for investment to own land used for office and residence (“Announcement”) with the purpose to facilitate business operations of foreign juristic entities who receive investment promotion from the Board (“Promoted Entity”) to own land used for office and residence purposes in Thailand.

Under the Investment Promotion Act B.E. 2520 (1977), the Board has authority to permit the Promoted Entity to own land in order to carry on the Promoted Business, in which such land shall have extent as the Board deems appropriate, despite the fact that other laws may prohibit otherwise.

Promoted Entity with registered and paid-up capital of not less than 50 million baht, is able to hold ownership of land for use as office and residence purposes in Thailand. Criteria, conditions and permissible ownership of land shall be as follows:

1. The Promoted Entity shall not hold ownership of more than 5 rai of the land for use as the office of the promoted business.
2. The Promoted Entity shall not hold ownership of more than 10 rai of the land for use as a residence of executives or experts.
3. The Promoted Entity shall not hold ownership of more than 20 rai of the land for use as a residence of workers.
4. The land for office and residence purposes can be either located in the same area with a place of business operation or elsewhere.

In case of special reasons and necessities, the Board will consider granting the appropriate permission for ownership of land on a case-by-case basis.

In the case where the Promoted Entity dissolves or transfers his promoted privileges, he shall dispose of the land which has been permitted to own within one year of the date of dissolution or transfer.

The Board has the authority to issue announcements prescribing additional rules as appropriate, such as the types of business, distances from the place of business operation, etc.

Since this Announcement has just been issued, there is no practical guideline available at this stage. Therefore, it causes doubts to the investors who would like to operate their businesses. For example, whether the Promoted Entity is entitled to own the constructions located on the land and whether the land held by the Promoted Entity is able to be several pieces of land located in several locations but in total not more than the quota allowed. The responsible officers at this stage also are not able to respond to these kinds of inquiries as well and leave for being considered on a case-by-case basis.