Thai police have charged over 100 individuals, including 67 Russians, for allegedly violating business laws in Phuket. This crackdown comes in response to local complaints about foreign nationals dominating the property market and job sector, particularly after a significant influx of Russians following the invasion of Ukraine.
Key Takeaways
- Over 100 people, including 67 Russians, charged with breaking business laws.
- 767,210 Russians arrived in Thailand in the first four months of the year.
- Nearly 60,000 Russians are currently living in Phuket.
- Property prices in Phuket have surged by 40% this year.
- Police seized assets worth 1.2 billion baht ($33 million) in recent raids.
Surge in Russian Arrivals
The Thai tourism ministry reported that 767,210 Russians arrived in Thailand in the first four months of the year, with 1.61 million visiting last year. Many of these visitors head to Phuket, attracted by its beaches and nightlife. Currently, nearly 60,000 Russians reside in the island province, creating a mini-Black Sea resort atmosphere with Cyrillic signboards advertising Russian businesses.
Local Backlash and Government Response
The influx of Russians has sparked discontent among some Thai residents, who accuse them of taking jobs and business opportunities without proper work visas and permits. In response to these complaints, the government initiated a crackdown, identifying 135 individuals and 100 companies suspected of legal violations.
"Phuket residents complained to the prime minister about a land and residential grab by foreigners causing hardship, so we ordered the operation,” said Police Lt. Gen. Jirapob Puridej, chief of the Central Investigation Bureau.
Legal and Economic Implications
None of the suspects have been detained, but they have been summoned to Bangkok to face charges. The Foreign Business Act 1999 in Thailand imposes severe penalties, including up to three years in jail and fines up to 2 million baht ($54,500) for violations. Foreigners can buy flats but cannot own land, and they are restricted to holding a maximum of 49% stake in joint ventures with Thai partners.
Impact on Property Market
The Real Estate Information Center reported a 40% increase in land prices in Phuket this year, significantly higher than the national average. House and condominium sales are expected to reach 31.5 billion baht ($859 million). During the raids, police seized land and condominium deeds worth 1.2 billion baht ($33 million), along with 318 million baht ($8.7 million) in cash deposits and 108 work permits.
Mixed Reactions
While some locals, like a Phuket native named Chai, welcomed the crackdown, others are concerned about its impact on foreign investment. Maetapong Upatising, president of the Phuket Real Estate Association, warned that the raids could deter investors. He noted that Russians are the top investors in Phuket’s real estate this year, followed by Chinese and French.
“Amid competition, land prices rise and so do shady businessmen,” Maetapong said. “Our association has called for a government investigation into fraud but it should not put off foreign investment.”
Future Prospects
Before the COVID-19 pandemic, Thailand welcomed a record 40 million tourists, with Chinese visitors making up more than a quarter. Although the tourism sector is recovering, it has not yet reached pre-pandemic levels. To boost arrivals, Thailand has included Russian tourists in a visa exemption scheme, which has been extended to July.
Sources
