fbpx

Police Crack Down on Russian Investors in Phuket

  • 1 month ago
  • Blog
  • 0
Thai police officers escorting Russian investors out of a luxury villa in Phuket during a crackdown.

Thai police have charged over 100 individuals, including 67 Russians, suspected of violating business laws in Phuket. This crackdown targets the multi-million-dollar property sector, which has seen a surge in prices since Russians began arriving in large numbers following their government’s invasion of Ukraine.

Key Takeaways

  • Over 100 individuals charged, including 67 Russians.
  • Surge in property prices in Phuket due to increased Russian presence.
  • Government crackdown in response to local complaints.

Background

The 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 Russians head to Phuket for its beaches and nightlife, with nearly 60,000 Russians currently residing on Thailand’s Indian Ocean coast. Some areas of Phuket resemble Black Sea resorts, with Russian businesses and signboards in Cyrillic.

Local Concerns

Local Thais have expressed anger over Russians taking jobs and opportunities without proper work visas and business permits. In response to these complaints, the government ordered a crackdown. Police identified 135 individuals and 100 companies suspected of breaking the law. None of the suspects have been detained but have been summoned to Bangkok to hear charges.

Legal Framework

Thailand’s Foreign Business Act 1999 imposes up to three years in jail and a fine of 2 million baht (U.S. $54,500) for violations. Foreigners can buy flats but cannot own land. They can set up joint ventures with Thai partners but cannot hold more than a 49% stake. In 2023, over 1,600 Russian-linked companies were registered in Phuket, compared to an average of 30 in previous years.

Economic Impact

Land prices in Phuket have risen by 40% this year, much higher than the national average. House and condominium sales are expected to reach 31.5 billion baht ($859 million). Police seized deeds for land and condominiums worth 1.2 billion baht ($33 million) and 318 million baht ($8.7 million) in cash deposits. Bank accounts suspected of being used for investment scams were frozen.

Mixed Reactions

Some locals, like Chai, a Phuket native, welcomed the police action, citing social disorder and rising property prices caused by Russians. However, others worry that the raids could deter foreign investment. Maetapong Upatising, president of the Phuket Real Estate Association, noted that Russians are the top investors in Phuket’s real estate this year and warned against ruining the investment sentiment.

Future Outlook

Before COVID-19, Thailand welcomed a record 40 million tourists, with Chinese tourists making up more than a quarter. The sector is recovering, with over 28 million visitors last year. To boost arrivals, Thailand has included Russian tourists in a visa exemption scheme, extended to July.

Sources

author avatar
Gaël Ovide-Etienne
Gaël oversees all marketing efforts for Ocean Worldwide. He manages marketing campaigns to connect with prospective buyers, conducts research and market analysis, and leverages AI to enhance all aspects of the business. This approach ensures better and faster results for our buyers and sellers.

Join The Discussion

Compare listings

Compare