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Can
Foreigners own a property in Thailand? |
Under Thai law foreigners can own a building but
cannot own freehold land in Thailand. However
there are various ways in which foreigners can
effectively control and use the land.
FREEHOLD OR LEASEHOLD?
There are many questions asked as to which
method is better and there are relevant
arguments made for both cases. Since foreigners
cannot own land outright, registered leaseholds
with appropriate extensions are equivalent to
freehold. Registered Leaseholds are safe,
uncomplicated and easy to set up.
LONG TERM LEASEHOLD
The most popular way is through long term
leasehold, whereby all types of titled land may
be leased up to 90 years. Firstly you can lease
for 30 years for the right to use of the
Property, typically with 2 more 30 year
extensions making a total of 90 years. This
purchase options can effectively control land
for generations to come.
FREEHOLD PROPERTIES STRUCTURE
If a foreigner is going to operate a business in
Thailand then he may purchase the freehold of
the land through his Limited Company. The land
will be owned by the company, not the
individual. Even recent amendments that allow a
Thai spouse (male or female) of a foreigner to
buy require proof that the money used in the
purchase of freehold land is legally solely
theirs with no foreigner claim to it.
LIMITED LIABILITY COMPANY
 This
form of purchasing property is the most popular
with foreign investors as the Articles of
Association can be varied, to allow greater
protection for foreign minority shareholders,
where majority Thai ownership is required under
the Alien Business Law. Thai law requires that
51% of the shares be held by Thai juristic
persons. However, any company with more than 40%
foreign interest that purchases land will be
investigated by the Central Land Office in
Bangkok (under Section 74 of the Land Code). To
ensure that the company has not been organized
in an attempt to circumvent the prohibition
against foreign ownership of land.
This results in the foreign ownership of the
company being limited at 39%, but with changes
of the Articles of Association, the use of two
tired stocks (ie. Ordinary Shares and Preferred
Shares with different voting rights). Plus the
foreigner being the only director of the company
who can commit or bind the company in any
contractual dealings – it is possible to
effectively give the minority shareholder
control over the company.
General Notification: It is recommended that the
potential purchaser seek legal advice on the
above matters to ensure the integrity and
security of their purchase.
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