According to Thai law, foreigners cannot own
land in Thailand; however, other alternatives exist for a foreigner is allowed
to acquire land.
How can
foreigners own land in Thailand?
The safest and easiest methods for
circumventing the law prohibiting foreigners to own land include using a
leasehold agreement or setting up a Thai limited liability company.
What are the
advantages of setting up a Thai company to buy land?
Unlike land leasing, the ownership of such land
is permanent as long as the company exists. Using this method is also
convenient if you were already planning to set up a business in Thailand. This
method is also suitable if you wish to purchase land as part of an investment
as it is possible to mortgage or subdivide the land for resale, which is not
normally possible with a leasehold.
What are the
disadvantages of setting up a Thai company to buy land?
Unless you a foreigner you cannot own more than
49% of the shares in the company. This means that you need Thai shareholders
who will sign over control of their shares to you. The minimum number of
shareholders is 3, so you can have 1 foreigner and 2 Thai shareholders.
However, even though you control these shares, proper legal procedures need to
be put in place in order to protect your investment. You also need to make sure
that the regulatory compliance of the company is maintained. Inactive companies
that are not generating income may be de-listed, so you need to make sure that
balance sheets are filed annually and that the company's address is maintained.
Land Leases
Do you have to register the land lease at the Land Department?
Leases up to 3 years don't need to be registered. Leases that are 3 years or longer must be registered at the Land Department.
What is the
maximum lease term available?
The maximum lease term is normally 30 years
with an option for an extension of 30 years and a further 30 years after that.
Each lease renewal must be registered at the local land office. Land for
industrial purposes may be leased for up to 50 years by a foreign company under
certain circumstances with a possible lease extension of a further 50 years.
What are the
disadvantages of leasing a property?
Its possible that the land owner may refuse to
sign the registration for the lease extension after 30-years. The lessee can
sue for breach of contract, but the entailed legal process is costly and
time-consuming. Other disadvantages include the difficulty in obtaining a mortgage
for the lease, a lower resale value and potential lawsuits from the land owner
for lease violations.
Purchasing
Condominiums
How is a
condominium defined under Thai law?
A condominium is basically defined as a
building with distinct portions that can be sold for personal ownership.
What are the
requirements for a foreign individual or organization to purchase a condominium
in Thailand?
A foreigner must have permanent residence in
Thailand in accordance with Thai Immigration Law. A foreign legal entity is in
accordance with the Announcement of the Foreign Business Act B.E. 2542 (1999)
and has been granted an Investment Promotion Certificate in accordance with the
Investment Promotion Law. A foreigner or foreign legal entity, who brings
foreign currency into Thailand, or brings in Baht currency from the account of
a person living abroad, and uses foreign currency from their deposit account.
This requirement is normally met by the presentation of a Dor Tor 3 form, which
is provided by the bank receiving an incoming remittance from abroad.
Are there
restrictions to owning a condominium?
A foreigner or foreign legal entity can acquire
up to 49% of the total number of units in a building. However, more than 49% of
the ownership may be allowed in certain condominiums in Bangkok and other urban
areas.
Are
condominium long-term leases available?
Condominiums can be leased for periods of up to
30 years, which can be renewed. Leases of more than three years are required to
be registered with the Land Department.
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