Bangkok: When a condo in the heart of the city unexpectedly becomes a hotel.
Back in February 2025, residents of a condo in Sukhumvit Soi 42 discovered a locked box hanging from a tree by the roadside, along with a code sent via an online booking app. Tourists who booked rooms through Airbnb received the location and code to retrieve the key without needing to contact the building management or register in any way. This exposed a shady business that had been accumulating for over six years, and this time it had escalated to the point of attracting nationwide attention.
According to Thai News Agency, the phenomenon has been around for six years. The first group of Chinese nationals to buy real estate in Thailand were what Thais call "grey Chinese." They expanded their business by buying up condominium units in large lots to gain bargaining power, and then reselling or renting them out at lower prices. They also began acquiring land using nominees to manage the transactions. Foreigners structure companies so that Thais hold 51% of the shares in the form of preferred shares, which receive agreed-upon dividends but have no voting rights. In reality, all decision-making power rests with the foreign investors.
Real estate developers revealed that Chinese investment groups are currently buying up condominiums in prime locations to rent them out on a daily basis. This practice affects over 90% of condominiums across all brands and has been occurring for several years. The financial motivation is clear: renting out a condo on a daily basis yields a high return of 8-10% per year, compared to 3-4% per year for monthly rentals.
The most shocking part is the third step. Some condos have been bought up by foreigners, especially Chinese, who have then re-appointed themselves as members of the condo's management committee. When the proportion of Chinese committee members exceeds that of Thais, Thais immediately lose their rights. There are reports that all the committee members of some condos are Chinese, and they have even threatened to sue Thais who exposed the daily rental practices.
Popular prime real estate locations for foreigners include Chiang Mai, Pattaya, Phuket, Rayong, Chonburi, Chachoengsao, Prachinburi, and Bangkok. In Bangkok, the most popular zones are Sukhumvit, Ratchada, Rama 9, and Makkasan. On May 1, 2025, police from the Economic Crime Suppression Division, in collaboration with officials from the Department of Business Development, raided three legal entities in Chonburi and Rayong provinces. This followed investigations revealing the use of Thai nationals as nominees to evade legal regulations in real estate projects worth over 2 billion baht.
Four levels of legal loopholes make this possible. First, the law limits foreign ownership of condominiums to 49%, but in practice, foreign investors buy large numbers of units in the same project for easier management. Second, renting out condos on a daily basis violates the Hotel Act but the fines are too light to deter the practice. Third, the condominium management company cannot resolve the problem on its own and must rely on government agencies. Lastly, nominee arrangements are commonplace, making investigation difficult.
The government began to act with two draft laws, but questions remain about their effectiveness. The draft Hotel and Overnight Accommodation Act aims to legalize short-term accommodations, but academics note it risks "laundering" businesses that were originally illegal without changing the existing power structure. The Immigration Act requires reporting a TM30 form every 24 hours to every foreign guest, conflicting with the new Hotel Act.
What really needs to be done to close the loopholes? Academics propose a strict crackdown on the use of nominees, by revoking company registrations and prosecuting offenders. However, what's missing is the integration of data from three systems: the Department of Business Development, the Land Department, and the TM30 system. Currently, these systems don't communicate, allowing condominiums owned by illicit companies to be rented out on a daily basis without appearing in any database.
In summary, both draft laws address visible problems, such as individualized daily rentals, but fail to tackle the structures through which gray capital is entrenched in the Thai real estate system. While the new laws may open up legal doors, if the back doors aren't closed, gray capital will continue to enter through an even more legal front door.