Thailand rethinks its welcome for foreign investment

Thailand is tightening scrutiny of foreign-linked businesses, property ownership and long-term stays as growing international investment in popular tourist destinations fuels concern among some locals about losing control of their communities.

On Koh Phangan, an island known for its Full Moon parties and attracting more than one million foreign visitors a year, billboards promoting villas and beachfront properties reflect the growing presence of overseas investors.

Locals say the rapid construction of foreign-linked properties and businesses is changing the island’s landscape. Government data show nearly 70 percent of about 16,800 companies registered on Koh Phangan and neighboring Koh Samui have foreign co-ownership, compared with about 12 percent nationwide.

Thai authorities have identified more than 240 businesses across the two islands that allegedly used nominee arrangements, in which local shareholders are listed to circumvent restrictions on foreign ownership. Investigations have expanded to seven provinces, resulting in more than 110 arrests and dozens of warrants.

Prime Minister Anutin Charnvirakul has described foreign control of businesses as a national and economic security concern. The government has also reduced visa-free stays for most nationalities from 60 to 30 days, seeking to prevent tourist visas from being used for unauthorized long-term stays and business activities.

Thailand’s tourism sector remains heavily dependent on foreign visitors, employing about 4 million people and contributing as much as one-fifth of gross domestic product.

The challenge is balancing that economic dependence with concerns over foreign ownership and community displacement. On Phuket, foreign buyers, including Russians, Middle Easterners and Indians, have helped drive demand for villas and other properties.

“Because there’s such high global demand for living on the island, a backlash has emerged against those wishing to invest,” said Naruemon Maisopa, president of the Koh Phangan Hotel & Tourism Association.

She said foreign investors vary widely, but some communities fear investment that does not contribute to the local economy could eventually push residents out of their own communities.