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Thai Law Property Ownership

Hua Hin Property Partner
Written by Hua Hin Property Partner

How to own property in Thailand is a frequently asked question. In our guide “Thai Law Property Ownership” we will explain all possible ways for a foreigner to own a property in Thailand. The laws regarding the purchase and ownership of a property as foreigner in Thailand are clear and strict. Even the Thai law property ownership is a complex topic we will show you different solutions how you can own property as a foreigner in Thailand. Follow the rules and you will have no problems at all. Please read also our “Thailand Property Buyers Guide“.

Under the Thailand Civil and Commercial Code foreigners have the same property rights as are available to Thai nationals. However it is under the Land Code Act B.E. 2497 (1954) prohibited for foreigners to own land in Thailand.

Foreign Nationals In Thailand May Own Property As Follows

• A unit in a registered Condominium.
• A building distinct from its land.
• A registered leasehold of up to 30 years for all types of titled land or buildings.

Foreign Nationals May Not Own:

• Freehold land.
• More than 49% of the shares in a Thai company that owns freehold land.

Moreover there are ways to structure the purchase so that foreigners are the de-facto owner of the land. Hua Hin Property Partner has summarized these methods for acquiring the rights to land that are in compliance with the Thai Law. Here are four different and common ways how to own property in Thailand.

Ways Of Property Ownership in Thailand

Purchase of a Condo in Thailand

For foreigners who wish to buy condominiums in Thailand, the process is straight forward and easy. Condominiums can be bought freehold by foreigners in Thailand. As long as you have entered Thailand legally and the condo is constructed on land of no more than 5 rai. Important is that no more than 49% of the total floor space of the complete condominium complex has already been purchased by foreigners. This can be easily and safely checked via your reputable independent lawyer. Also the Juristic office that will hold current records of the owners of the condos. In Hua Hin, the large majority of condos are usually purchased by Thais anyway. Therefore, this is not really too much of an issue although it should always be checked.

A foreigner wishing to purchase a condominium in Thailand must also observe the law that the money they use to purchase the condo must be sent from overseas. Again, this is a straight forward step and as long as you retain all the records of your money being sent from overseas to Thailand, you can then purchase a condo freehold and own it legally. Also, should you ever wish to sell your condo at some stage in the future and send your money back to your home country, you can do so legally and easily with no taxes to pay unless of course you have a made a profit and you will be taxed on that profit.

Purchase of a house and land in Thailand

Foreigner nationals cannot claim ownership over land as freehold. The preferred method of acquiring land is through leasehold. This legal form of ownership gives the buyer the right to use the land and register the contract for a maximum lease term of 30-year lease at the Land Department. The lease contract can be renewed two times. This way of acquiring the rights to own land is in accordance with Thai law and the most popular way for foreigners to acquire property in Thailand. We recommend that way of the ownership when the customer asks us how to own property in Thailand.

Why is it the Favoured Alternative?

• It is simple and straightforward.
• Foreigners can obtain full interest on a lease in Thailand throughout the specified lease term.
• This is preferred over purchasing through a limited company where you have several shareholders
who may have interests that are different from yours.
• You can transfer the leasehold interest or even sell it the same way as you would for any other freehold
title conveyance in Thailand.
• The maximum lease term is 30 years

Marrying a Thai Spouse
Land acquisition by a Thai married to a foreigner
When a foreigner has a Thai spouse then land could be bought on the name of the Thai spouse but obviously this carries some risk. The land will be registered in the Thai spouse’s name and for the spouse to buy the land, proof is required that the money used to purchase the land, is legally from the Thai spouse, with no foreign claim to it.

• As the non-Thai spouse, you need to state that you have no rights over the land; effectively waiving your rights to claim the land.
• The land, though purchased by you, cannot be in your name but will have to be in the Thai spouse.
• The married couple may be asked to sign declarations at the Land Department stating that the funds used are the separate property of the Thai spouse.
• Problems may still arise during a divorce case. Proving that the land is marital property will be difficult.

There are basic guidelines that the law provides in the management of matrimonial assets and in this case, a skilfully drafted prenuptial agreement may help to minimize your risks as the non-Thai spouse.

However, although you cannot own land in Thailand, you may own the building that is built on the land. You will have two contracts when purchasing house and land. One will be a lease contract while the other contract will be for the house. You must however apply for planning permission from the local municipality office and your building plans will have to be certified by a qualified engineer or qualified architect.

It is also possible for a foreigner to buy property while overseas and not be physically present in Thailand. By using power of attorney you can instruct a lawyer to act on your behalf to complete the whole process. However, and as previously outlined, in most cases, unless you know someone very well who can vouch for the property, area, build quality, developer, views etc, it is recommended that you visit the property and location in person in order to minimize any potential risk.

Land Holding Company in Thailand

Actual Foreign Land Ownership, but for only 49%
Buying land with a Thai majority company is fairly common for foreign investors. Thailand registered companies with majority Thai ownership are able to buy land in Thailand.

In the past it has been common for foreign nationals to acquire an interest in Thailand real estate as minority shareholders in a Thai majority company. However in recent years, the Thailand Land Department has become stricter in investigating limited companies for the use of the “nominee” Thai shareholders, who do not possess a legitimate interest in the company owning the land.

Distribution of the shares

Thai law stipulates that the majority of shareholders in a company must be Thai. Any company where over 40% of the shareholding is foreign and the business of the company is land purchase would be investigated by the Central Land Office. This is to ensure that there has been no attempt to get around the ban on foreign ownership.
Therefore you are in practice limited to 39%. With a restructured Articles of Association, the foreign shareholder can be the only director of the company. Furthermore he can be the only officer who can undertake contractual dealings on the company’s behalf. This, in effect gives the foreign investor control over the company.

Nevertheless it is still possible however for a non-Thai shareholder to secure his investment in a Thai limited company through legal means. We do not recommend this way of the ownership. You should consult a lawyer of your choice if you wish to own the land within a Thai Co.,Ltd.

Title Deeds in Thailand

Last but not least we wanna explain the different title deeds in our guide “Thai Law Property Ownership”. In Thailand there are different title deeds. You have the highest ranked, which is the “Chanote” or  “Nor Sor 4”, which gives you complete rights over the land. Then, you have “Nor Sor 3 Gor” which is also safe and is just awaiting full title status. Then, comes to “Nor Sor 3” – this land has never even been officialy measured. This could be highly risky. Finally, comes the Possessory Right – not recommended and not substantiated by the government – maybe best to avoid this type of land.

If anything is not clear or if you have any questions about our guide “Thai Law Property Ownership” please don’t hesitate to contact us anytime.

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