Foreign Land Ownership

Foreign Land Ownership in Thailand: Legal Framework and Restrictions

Thailand’s laws regarding foreign land ownership are stringent, with few exceptions available. While foreigners are generally prohibited from owning land, there are some limited circumstances under which it may be possible.

Theoretical Exception for Individual Foreigners

In theory, individual foreigners can own up to 1 Rai (1600 square meters) of land for residential purposes through a Board of Investment regulation. This requires a substantial 40 million baht investment in specified assets or government bonds that benefit the Thai economy. However, this option is subject to strict conditions:

What are the specific areas in Thailand where foreigners can potentially own land?

According to the draft ministerial regulation approved by the Thai cabinet in October 2022, foreigners who meet certain eligibility requirements may potentially own land in specific areas of Thailand #1. 
These areas include:

Additionally, for foreigners investing through the Board of Investment (BOI) promotion, land ownership may be permitted in areas related to BOI-approved projects. Similarly, with approval from the Industrial Estate Authority of Thailand (IEAT), foreign investors may acquire land ownership within IEAT-defined industrial zones for industrial activities.

However, it’s crucial to understand that these regulations are still in draft form and have not been officially implemented. The specific areas and conditions for foreign land ownership may be subject to change as the policy develops. Potential investors should stay informed about the latest policy updates and consult with legal experts before making any land purchase decisions in Thailand.

Special Privileges for Foreign Companies

Foreign companies making substantial investments that benefit the Thai economy may be granted special privileges and exemptions for land ownership. These are typically granted under specific acts:

Thai Companies with Foreign Ownership

The most common vehicle for foreigners to control land investments in Thailand is through a foreign-controlled Thai company with majority Thai shareholding. This structure typically uses preference shares to maintain foreign control while complying with Thai ownership requirements. However, it’s important to note:

What are the benefits of using a Thai company to own land for foreigners

Using a Thai company to own land offers several benefits for foreigners looking to invest in property in Thailand:

Legal Workaround

A Thai Limited Company with foreign shareholders (up to 49%) and directors can purchase and register land in the company name. This provides a legal avenue for foreigners to indirectly own land, circumventing the general prohibition on direct foreign land ownership.

Flexibility & Control

Through preferential voting rights attached to minority shareholding, foreign investors can retain control of the company despite not being majority shareholders. This structure allows for greater operational and financial flexibility compared to individual ownership or long-term leaseholds.

Property Options

Owning land through a Thai company opens up more property options for foreigners:

Financial Benefits

There are potential financial advantages to this ownership structure:

Business Opportunities

While the company must have a legitimate business purpose beyond property ownership, this requirement can create opportunities for foreigners to engage in other business activities in Thailand.

It’s important to note that while these benefits exist, using a Thai company to own land carries risks and legal complexities. Foreigners must ensure compliance with all relevant laws and regulations, including avoiding the use of nominee shareholders, which is illegal. 

Consulting with legal experts like Closer Law is crucial to navigate this ownership structure successfully and lawfully.

Inheritance of Land by Foreigners

Foreigners can inherit land as statutory heirs, but with significant limitations:

In conclusion, while there are theoretical pathways for foreign land ownership in Thailand, the practical reality is that options are extremely limited and subject to strict governmental oversight and approval.

So what can Closer Law do for you regarding Real Estate?

Due Diligence: We do a deep dive to check if the property’s paperwork is in order, look for any hidden problems, and make sure everything about the property is legally okay. This way, you can be excited about your property choice without any worries.

Property Buying: Whether it’s condos or houses you’re interested in, we’re here to help you at every stage of buying your property. This includes making sense of the rules around buying property as a foreigner.

Lease and Rental Agreements: Our team writes up and checks over rental agreements to make sure they follow Thai law and keep our clients’ best interests safe.

Legal Guidance and Support: We offer advice to make sure you’re following all the necessary laws and rules, including those about taxes, helping your property deals go smoothly. We’re here to guide you through the legal maze and ensure every transaction is compliant and hassle-free.

Solving Disagreements: If any problems come up, our skilled lawyers are ready to stand up for you and make sure your side is heard and protected.

Key benefits of working with Closer Law

At Closer Law Co., Ltd., we make dealing with real estate in Thailand easy and safe for you. Our legal experts come with a lot of know-how and offer all the services you need to make sure your property dealings are not only successful but also follow the law and match your goals perfectly.

Choosing Closer Law for your property purchases or leases in Thailand comes with many important perks, guaranteeing transactions that are safe and adhere to legal standards.

Below are the top benefits:

Our focus is on defending your interests, guaranteeing that each element of any real estate transaction benefits you. Working with us gives you access to a dedicated team of legal negotiators, all striving to obtain the most beneficial outcomes for your real estate undertakings.

We provide comprehensive advice to both international and Thai clients on all facets of real estate transactions in Thailand, covering areas such as:

Our approach is business-oriented, extending beyond mere legal advice. As specialists in Thai real estate law, our team aids in deal structuring and the search for strategic partnerships. Additionally, we leverage our extensive network of third-party auditors, accountants, financial advisors, property valuation specialists, HR consultants, and government agencies to support transaction execution.