Smart investors will always do plenty of research, and location, capital gains, accessibility, financing, rental returns and lifestyle are among the factors high on the list.

One that is always up there on the agenda is ownership rules and regulations in countries where buyers are not nationals, as investors assess different countries and cities. It can also often be used as a barometer to judge the investment friendliness of a country.

Looking at Asian competitors to Thailand for foreign investment in this regard, at one end of the scale is Hong Kong, with the least controlled ownership regulations. Foreigners can generally buy properties such as apartments and condominiums in Hong Kong and rent them to others without limitation.

The most limited is Burma, with no foreign ownership allowed and land leases of only 30 years.

In Thailand, regulations do not allow foreigners to own land, but permit a 30-year renewable lease, although this cannot be inherited and expires upon the death of the holder. Foreign ownership is allowed in condominiums of up to 49% of the saleable area.

Foreigners investing 40 million baht in Board of Investment-approved projects are also permitted to own one rai of land.

There are a number of other countries in Southeast Asia that do not allow foreigners to own land or who set limits on the sales of condominium units, including Vietnam, Cambodia, the Philippines and Laos.

But foreigners do not need to buy land to be in the property game in Thailand. Like many of its neighbours, Thailand's rules focus on the length of land leaseholds and foreign ownership quotas in condominium projects.

However, competition is definitely heating up, as a number of countries are changing their property regulations, or are certainly considering changes, in order to attract foreign investment.

As such, Thailand would be advised to consider lengthening the terms of leaseholds and raising the condominium quota to remain competitive.

To its credit, Thailand's new government is taking positives steps, as seen in early January when it passed a real estate stimulus package.

The new measures increase the property tax allowance for principal payments to 300,000 baht and 100,000 baht for interest payments, which is good news.

At the recent Property Market Outlook 2009 seminar, condominium developers were saying the move should have a positive impact on the market for homes priced from three to six million baht, which covers 90% of the residential market.

However, others pointed out that the measures would not immediately stimulate the market, as homebuyers generally take one or two years to make their decisions. Most developers welcomed the measures, saying they should improve consumer sentiment, but fall short of addressing the needs of the high-end market.

They believe homebuyers in the upper markets are the ones with the purchasing power, savings and job security to buy a home.

Such is Thai developers' confidence in the demand for high-end luxury property, that they are continuing with plans to launch upscale residential projects this year.

To be sure, international investors will eye these projects along with similar offerings within the region, but they'll find Thailand's property restrictions tarnishing their appeal.

Compare this to Malaysia with no condominium quotas and legislation permitting foreigners to purchase any residential property valued above 250,000 ringgit (2.4 million baht) for their own use.

To attract the older investor, Malaysia launched a "My Second Home" programme, which lowers the minimum purchase price for units located within designated areas to 150,000 ringgit for foreigners over 55 years of age.

In Singapore, foreigners can own units in buildings or houses in approved condominium developments not bound by quotas with land leases up to 99 years.

Foreigners can also purchase landed properties if they receive government permission and the plot size is less than 1,400 square metres.

To spur investment, Singapore recently permitted foreigners to own houses on Sentosa on a leasehold basis.

In Cambodia, companies with 51% foreign ownership can purchase land, but individual foreigners are limited to 99-year leaseholds.

Late in 2008, Cambodia announced it is considering measures to allow foreign ownership of apartments and office buildings, but not the land they stand on, which could be secured with a 99-year lease.

Laos permits foreigners to hold 75-year land leases, as does the Philippines, but its foreign quota for condominiums is less than Thailand's at 40%.

At the beginning of this year, Vietnam implemented a five-year pilot scheme that allows foreign enterprises and individuals to purchase residential properties. The previous law permitted renewable leaseholds of 50 years, but they could not be transferred.

The new regulation allows qualifying foreigners to own land or one apartment, but only for a maximum of 50 years.

To qualify, foreign buyers must have made a direct investment in Vietnam, hold a managerial position in the country, be married to a Vietnamese or hold a residency permit.

Compared with Thailand's long-standing 49% foreign quota in condominiums and 30-year leaseholds, many of Thailand's neighbours have gradually eased ownership controls over the years and many are looking to further legislate even better terms to boost foreign investment.

A change to longer leases would also provide developers with more flexibility to build mixed-use projects, which in turn would create a more attractive environment for foreign investors.

To remain competitive, Thailand would do well to do the same by raising leasehold terms and the foreign quota in condominiums. This would surely drive international investment, while not eroding the sovereignty issue surrounding land ownership of the country.

Nigel Cornick is Chief Executive Officer of Raimon Land Public Co., Ltd, Thailand's award-winning luxury property developer with projects in Bangkok, Phuket and Pattaya. For more information visit http://www.raimonland.com.

source : www.bangkokpost.com