Legal & Land Ownership Laws Thailand

Land Ownership and Foreign Nationals - Generally speaking Thai law prohibits foreign nationals from owning land in Thailand. The definition of a "Foreigner" is a person not of Thai Citizenship or juristic entities such as companies which are owned or have a controlling allocation of a foreign national.

Thai Nationals married to a foreigner were also prohibited from owning land in Thailand as it was presumed that a spouse may be holding the land on behalf of the foreigner. Recently this stance has been amended and the current policy is that the Thai spouse may own land however the foreign spouse must sign a waiver to state that they have no interests or claims to the land and that the land was paid for by the Thai spouse.

Under certain circumstances the law does make allowances, such as section 86 of the Thai land law. This law decrees that a foreigner may own land if permitted to do so under a treaty between consenting countries. The predicament with this method is that there are currently no such treaties in existence.

Limited Liability/Thai Registered Companies - Under section 97 of Thai Land Law the definition of "Foreigner" includes resisted companies or partnerships in which the controlling share (over 49%) in held by a foreigner or of which more than half of the shareholders/partners are of foreign nationality.

Furthermore it can be difficult, if not impossible, for a Thai company which has foreign shareholders to acquire land in Thailand. This includes minority shares of 49% or less. The actual statutes can vary depending on local governing Land Offices and Agencies, in some cases it may be allowed with minimum of 60% Thai shareholders however this may also change from one year to another.

A foreigner is permitted to be the sole director of a company with majority Thai shareholders.

With safeguards and amendments in place the director can have exclusive contractual powers, in effect giving the minority shareholder control of the company.

30 Year Lease - A lease of up to 30 years can be made with the appointment of a "Thai Nominee" as the actual property owner. Any lease of over 3 years must be registered by the local Land Registration Office, this involves stamp duty and registration fees based on the rental rate covering the complete lease term. This process also prevents a property owner from selling or leasing the same property without the Lessor's prior consent.

The lease agreement can be extended for an additional 2 x 30 year terms however it should be noted that there may be complications renewing the lease after the original 30 year term as even if the original contractual agreement includes the additional terms, they may not be registered in the same way as the initial lease agreement.

As an additional safeguard the option to buy or transfer the lease can also be included in the agreements.

BOI Approved Investment - As part of the Investment Promotional Act the Board of Investments (BOI) has the ability to grant permission to a "foreign" company to own land for the purpose of business associated with the companies activities. The BOI must approve the land area and determine if the size of the land is within proportion to the construction plans and the purpose of the company.

The land must be used for the purpose specified by the company and if the company is dissolved the land must be sold within 1 year of the collapse of the business.

This exception in the law is generally orientated towards manufacturing and factories. In addition to owning land the BOI can also provide a foreign company with privileges that would otherwise be prohibited by the Alien Business Law.

The Condominium Act No. 1-4 - Under the Condominium Act it is forbidden for a foreigner to own condominium units unless the foreigner, and the unit, qualifies for "foreign ownership" status.

An amendment to the Condominium Act authorizes qualifying foreign nationals to own a unit within a condominium providing that the unit is part of a 49% limitation on the total area of the building. Qualifying statuses include individuals with permanent residence in Thailand, individuals or juristic entities with BOI privileges, juristic entities classified as "foreign" under the Land Act and individuals or juristic entities which have brought foreign currency into Thailand for the purpose of purchasing the condominium unit.

Foreign Currency Transfers - A Tor Tor Sam (TT3) is issued by the bank receiving the foreign currency transaction. The TT3 form is an official receipt that can verify that the funds transferred from overseas have been done so with the intention of purchasing a condominium unit. Any transfer of funds intended for the purchase of a condominium unit should be transferred under the declaration of "condominium purchase" in Thailand. The form must be requested from the issuing bank once the funds have been transferred.