A new Thai government planning regulation has been issued for Phuket. Legal firm Baker & McKenzie have issued a summary and analysis of the implications which we are reprinting with permission:

RECENT DEVELOPMENTS

On 7 July 2011, the Ministerial Regulation to Implement the Phuket Province Town Planning Regulation B.E. 2554 (the “2011 Regulation”) was published in the Government Gazette. This regulation replaces the Ministerial Regulation to Implement Phuket Island Town Planning Regulations B.E. 2548 (the “2005 Regulation”). It extends the laws on town planning and land utilization to all land in Phuket province, including small secondary islands, and will remain in effect for an initial period of five years.

WHAT THE LAW SAYS

Significant differences between the 2005 Regulation and 2011 Regulation are as follows:

- The 2011 Regulation is applicable to the whole of Phuket, including small secondary islands within the territory of Phuket province, whereas the 2005 Regulation covered only Phuket island;

- The 2011 Regulation increases the number of land utilization zones from 13 to 16 zones, as noted in the chart below. The three additional zones, which govern the sea areas around Phuket province and its small secondary islands, are the blue zone (empty land for environmental preservation, tourism and fishery), the blue with white stripe zone (empty land for recreation and preservation of coastal environment), and the blue with light brown stripe zone (empty land for preservation of natural resources and coastal environment);

- The 2011 Regulation provides that the use of land in each zone for purposes other than those prescribed in the regulation must not exceed a certain percentage in each area of each zone as prescribed in the regulation. Previously, under the 2005 Regulation, the percentage limit for such use applied to each individual land plot; and

- There are changes regarding the scope of land utilization in each zone, including changing certain commercial and high-population residential zones (red zones) to low-population or medium-population residential zones (yellow or orange zone). The key changes are summarized in the table below.

LOW-POPULATION RESIDENTIAL ZONE (YELLOW ZONE)

2005 Regulation:

- The use of land for other purposes must not exceed 30 percent of the area of each individual land plot.

- The land must not be used for the storage of fuel intended for sale.

2011 Regulation

- The use of land for other purposes must not exceed 5 percent in each area of the yellow zone.

- The land must not be used for the storage of fuel intended for sale, except for liquefied petroleum and natural gas.

MEDIUM-POPULATION RESIDENTIAL ZONE (ORANGE ZONE)

2005 Regulation

- The use of land for other purposes must not exceed 50 percent of the area of each individual land plot.

- The land must not be used for the storage of fuel intended for sale.

2011 Regulation

- The use of land for other purposes must not exceed 15 percent in each area of the orange zone.

- The land must not be used for the storage of fuel intended for sale, except for liquefied petroleum and natural gas.

COMMERCIAL AND HIGH-POPULATION RESIDENTIAL ZONE (RED ZONE)

2005 Regulation

- The use of land for other purposes must not exceed 70 percent of the area of each individual land plot.

- The land must not be used for the storage of fuel intended for sale, except for gas stations.

- The land must not be used as a graveyard or crematorium.

- The red zone in certain Muang Districts must not be used for factories other than factories that operate without causing any nuisance or pollution.

2011 Regulation

- The use of land for other purposes must not exceed 15 percent in each area of the red zone.

- The land must not be used for the storage of fuel intended for sale, except for liquefied petroleum and natural gas.

- No restriction on the use of land for graveyard or crematory purposes.

- The red zone in certain Muang Districts must not be used for any type of factory.

INDUSTRIAL AND WAREHOUSE ZONE (PURPLE ZONE)

2005 Regulation

- The use of land for other purposes must not exceed 50 percent of the area of each individual land plot.

2011 Regulation

- The use of land for other purposes must not exceed 10 percent in each area of the purple zone.

Specific industrial zone (Light purple zone)

2005 Regulation

- The use of land for other purposes must not exceed 50 percent of the area of each individual land plot.

2011 Regulation

- The use of land for other purposes must not exceed 10 percent in each area of the light purple zone.

RURAL AND AGRICULTURAL AREA (GREEN ZONE)

2005 Regulation

- The use of land for other purposes must not exceed 30 percent of the area of each individual land plot.

- The land must not be used for the storage of fuel intended for sale.

- No restriction on the use of land for residential or commercial purposes in the form of commercial buildings.

- The land must not be used for residential purposes in the form of common residential buildings such as condominiums or apartments.

2011 Regulation

- The use of land for other purposes must not exceed 5 percent in each area of the green zone.

- The land must not be used for the storage of fuel intended for sale, except for liquefied petroleum and natural gas.

- The land must not be used for residential or commercial purposes in the form of commercial buildings, except if such use is part of a land subdivision for residences and does not exceed 10 percent of the total area of the project.

- The land must not be used for residential purposes in the form of common residential buildings such as condominiums or apartments unless the land is 1,000 meters away from the shoreline.

EMPTY LAND FOR RECREATION AND ENVIRONMENTAL PRESERVATION (LIGHT GREEN ZONE)

2005 Regulation

- Land which is privately owned shall be mostly used for residential purposes, tourism, governmental institutions, public utilities and public activities.

- The use of land for other purposes must not exceed 50 percent of the area of each individual land plot.

- The land must not be used for the storage of fuel intended for sale, except for gas stations.

- The land must not be used for factories classed as type 2 or 3.

- No restriction on the use of land for the sale, purchase or storage of scraps.

2011 Regulation

- Land which is privately owned must be mostly used for recreation, recreation-related activities, environmental preservation, residences, tourism, governmental institutions, public utilities and public activities.

- The use of land for other purposes must not exceed 5 percent in each area of the light green zone.

- The land must not be used for the storage of fuel intended for sale, except for liquefied petroleum and natural gas.

- The land must not be used for any type of factory.

- The land must not be used for the sale, purchase or storage of scraps.

- Forestry reservation area (Green with white stripe zone)

FORESTRY RESERVATION AREA(GREEN WITH WHITE STRIPE ZONE)

2005 Regulation

- The use of land for other purposes must not exceed 50 percent of the area of each individual land plot.

- The land must not be used for the storage of fuel intended for sale.

- The land must not be used for factories classed as type 2 or 3.

- The land must not be subdivided for residential purposes, except for single housing.

- The land must not be used for residential or commercial purposes in the form of commercial buildings or row houses.

- No restriction on the use of land for the sale, purchase or storage of scraps.

2011 Regulation

- The use of land for other purposes must not exceed 5 percent in each area of the green with white stripe zone.

- The land must not be used for the storage of fuel intended for sale, except for liquefied petroleum and natural gas.

- The land must not be used for any type of factory.

- The land must not be subdivided for any residential purpose whatsoever.

- The land must not be used for residential purposes or for the construction of high rise buildings or large scale buildings.

- The land must not be used for the sale, purchase or storage of scraps.

CONCLUSION

The 2011 Regulation is currently the key law governing all types of development and land utilization in Phuket. Prior to acquiring any land for real estate development in Phuket, developers need to carefully consider the new regulation and keep abreast of any other upcoming regulations regarding land utilization restrictions and requirements to ensure that their proposed projects can be realized under Thai law.

Developers who acquired, but did not start developing, their land before the 2011 Regulation took effect, including those who already have building construction permits, should confirm whether the 2011 or 2005 Regulation will apply before proceeding with their proposed developments.

Source: Baker & McKenzie in Thailand