Thailand House and Land Ownership Law

Can foreigners buy a house or land in Thailand?

This is often a question asked to us by foreigners who are interested in purchasing a home or some land in Phuket or elsewhere in Thailand.

In theory anyone can own a house or building in Thailand. The problem however lies with the fact that although a foreigner can own the house or building, they can not legally own the land on which the house or building stands.

This makes the situation somewhat complicated as you will ofcourse not invest into a Phuket real estate object and have someone else own the land on which you have your construction. What would you do if the land owner no longer wants your house on his land?

There are several methods being used by real estate agents and lawyers to enable foreign buyers to own the land as well. These methods are basically tricks to bypass the land ownership laws in regards to foreigners however these methods are in full compliance with Thai law.

Thailand Limited Liability Company

Thai Limited Liability Company formation is frequently used by foreigners as a way for them to own land in Thailand. The reason for this is that the articles of association of the limited liability company can be created so that the foreigner receives better protection in regards to their rights of ownership.

The law in Thailand stated that any company purchasing land and has more then 40% of its shares owned by a foreigner, the Thai Central Land Registration office would have to start an investigation into any land purchase. This would result into the land purchase becoming invalid as a foreign entity would own land in Thailand.

The way around this is for the foreigner to own 39% of the shares. The articles of association of the Thai Limited Company would be structured so that their foreign minority shareholder would be the sole director of the company.

The sole director would be the only person allowed to make any form of contractual decision on behalf of the Thai limited liability company. This method gives the foreigner in effect 100% control over the limited liability company and full control over their investment.

Thai Nominee with Lease

Another popular method for foreigners to purchase land is by way of appointing a Thai person as their nominee. This Thai national would buy the land and would make an agreement with the foreigner in regards to a lease of the land for a maximum period of 30 years.

The Thai law however does allow for this lease period to be extended times which therefore means that you would be able to lease the land for a total period of 90 years. Therefore the option with a Thai nominee with lease can be a great solution.

Thai law states furthermore that any contract for a lease longer then 3 years needs to be officially registered with local authorities. This is a somewhat simple process which required the payment of duty stamp and a fee for the registration. How much you will need to pay on the duty stamp is calculated through a certain percentage over the total value of the amount of rent that the foreigner would pay over the total period of the lease.

The lease can at no time be suddenly cancelled by the Thai nominee which ensures that you can remain on the land for the period of the lease. The negative aspect of this construction is that you would need permission by the Thai nominee if you would sublease or sell your lease to a third party.

You would therefore need to be absolutely certain that the Thai nominee is a trusted person. Most Thai law firms or Phuket real estate companies can assist you in obtained a trustworthy nominee. It is a great way to get around the Thailand house and land ownership law.