Foreign Ownership of Property in Thailand

Subject to Laws of Thailand, foreigners are unable to legally purchase and own land under their name in Thailand, except building and structures located on the land or condominium unit. Many foreigners are seeking for some alternative methods to acquire the property ownership in Thailand and there are several ways for foreigners to possess a Thai property such as leasehold, purchase land through a Thai juristic person, and usufruct. Likewise, the property ownership of foreigners is basically corresponding with the Land Code B.E. 2497 (1954), the Thailand Condominium Act B.E.1979, and the Thailand Civil and Commercial Code.

• Lease

This is the most effective method for foreigners to have the right of use a certain land as a leasehold rather than actual property ownership. Meanwhile, there is a restriction for Non-Thai buyers that a Thai property can be leased up to 30 years. It is the maximum duration for a Thai property lease and the buyers must register such property in their own name with the registrar at Land Department. Nevertheless, the lease can also extend for subsequent 30-year periods, in the form of promise or warrants, even though the property is sold, the lease will be continuing until the end of effective period.

• Ownership of property through a Thai company 

Due to Non-Thai buyers are legally restricted to be ownership of real property in Thailand, for those who intent to establish a business in Thailand, foreign person(s) could also setting up a Thai company, which is another common option for foreigners to purchase and own real property. Which can be properly done by forming a Thai company that must obtain Thai citizens and foreigner shareholders so Thai citizens or juristic persons will be the majority of the shareholder at least 51% of total shares, another 49% might be held by foreign shareholders. Subsequently, Non-Thai buyers can control the operation and purchase a Thai property legitimately under a Thai company. To be noted, it will be regulated by the Government following the Foreign Business Act B.E. 2542 (1999) that it is forbidden for Thai citizens to hold or act on behalf of the foreigners to operate the business in avoidance or violation to the laws.

• A Thai usufruct

Thai citizen may assign a temporary right to utilize and manage real estate property, including generating any benefits on real estate. Prior to applying the usufruct at the land office, at sole discretion of officer, the registrar has to ensure whether such property is in possession of Thai citizen with actual connection. Significantly, the foreigner and Thai citizen are required to make a declaration of fact that the money expended on the property belongs to the Thai citizen and the property will be possessed by the Thai citizen only. Which is an essential step to conduct the Letter of Confirmation in the presence of an officer.

However, before engaging in any transaction of real estate property, Due Diligence should be conducted to verify real estate property and all aspects of its condition with the land department. 

Avanta & Co.