Updated by Sunbelt Asia on 12 April, 2011
Foreigners are not legally allowed to own land although with a few exceptions they can own one rai of non-inheritable land.
That said, many foreigners started majority Thai owned limited companies with the sole reason of buying land and this loophole is now being closed as more land offices are cracking down on non-active companies that purchase land. The Thai government has issued guidelines for local Land Offices to follow in regards to partially foreign owned companies buying and holding land. The use of nominee shareholders is being eliminated and this is not a wise way to obtain land.
Current regulations require that the company be an actively trading business with money flowing through the books, shareholders meetings must be held, minutes taken and yearly audits filed. Additionally the company must have a legitimate business purpose that is registered with the Business Registration Department.
The Land Office will investigate all Thai shareholders of a company wishing to purchase land and ensure that they are legitimate investors with enough financial resources to actually invest the required amount of capital in the company.
The Thai spouse of a foreigner can purchase land but he or she must show there is no foreign claim to the money. While a foreign spouse can give the money to their Thai spouse they will most likely be required to sign a paper at the Land Office stating they make no claim on the money or the land, that it is personal property (Sin Suan Tua) and not common property (Sin Som Rot).
This can also be recorded at the Thai Embassy overseas if the foreign spouse is overseas or by a qualified notary.
The Thai spouse is the sole owner of the land and can mortgage, transfer or sell it without requiring the permission of the foreign spouse as it is not joint marital property. It is only the land that this regulation applies to and not any structures built jointly upon the property.
Foreigners can obtain management of the property either through a 30 year lease that may be renewable at the discretion of the owner or through a usufruct that can be given for life.
With a 30 year lease the foreign tenant does not own any interest in the land. This is generally completely acceptable with the Thai government and the foreigner can have a wide spectrum of rights to the land during the term of the lease. The Foreigner may, if the lease stipulates it, even be able to own any building structure on the land in his name.
If the Lessee is renting an undeveloped piece of land and he or she intends to build his or her own structural building (house) on the designated land, it is best to specify the ownership of the building in the original agreement. If it is not specified and the lease expires, then the building will be considered the property of the landowner.
If the tenant would like to transfer his rights to the land he will be limited to assigning those rights to the land to a third party (if allowed by the Lessor or the lease). In order to be valid, any lease longer than a three year period must be registered with the local Land Office where the land is located. Leases for up to three years may be entered into with a simple contract and do not need to be registered. Any lease longer than 3 years would be registered at the local Land Office and on the back of the title deed or Certificate of Use. Registering the lease at the local Land Office allows any potential third party purchasers of the land to know of the tenant's rights to the land during the period of the lease. If a third party buyer was to buy it, the tenant’s rights would be acquired for the remainder of the term of the lease.
Many foreigners are told by sellers or developers that they can get the initial 30 year lease plus a second term of 30 years plus an additional third term 30 year lease option. However, under the Civil Commercial Code only the first 30 years is guaranteed valid for the tenant's rights to the lease (once the lease is registered at the local Land Office). There are court decisions which indicate that the renewal clause is personal to the landlord and thus may not be binding on his heirs or future landlords (Lessor).
Also a lease contract can contractually bind the lessor to agree to a second term of 30 years, but again this is only enforceable after the owner of the land goes with the tenant to the Land Office and registers a 2nd term of 30 years. If the owner of the land does not wish to register the second term of thirty years, the tenant could file a lawsuit with the civil court against the owner, reason being breach of a contract between two individuals.
A lease for industrial or commercial purposes can be granted for a term of up to 50 years and this may also include an option to renew for a further 50 years.
A usufruct is a right granted by an owner of land in favour of a usufructuary where the usufructuary has the right to possess, use and enjoy the benefits of the property. The usufructuary can also have the right of management of the property.
A usufruct may be created for your natural life. You also can lease the land to a third party which would not end if you died. Example: If you died, you can lease out the property to a third party before your demise as per the Supreme Court ruling 2297/1998; “the lessor does not have to be the owner of the property. Therefore the usufructuary can rent out the land. In the event of death of the usufructuary within the lease term, only the usufruct will be terminated but not also the lease.” However, any lease agreements longer than 3 years must be registered with the Land Office and with the title deed.
A usufruct can also be given to more than 1 person at the time. With the usufruct, you are registered on the title deed. The land can never be sold or transferred by the owner of the land until the servitude is terminated. You can also get a yellow book which is a House Registration Certificate (Thor. Ror 13).
The usufruct would be registered with a 1.5% tax of the value of the benefit (if you are not married to a Thai wife, if you are, the tax is less than 100 Baht).
A 40 million baht investment into Thailand in specified assets or government bonds deemed beneficial to the Thai economy may allow a person to purchase one rai of non-inheritable land but it requires approval of the Minister of Interior.
While in theory a foreigner married to a Thai national may, as their statutory heir or legatee, own property through inheritance, in practice we are unaware of this ever being the case. The caveat of the rule is that the foreigner's ownership of the land is contingent upon the approval of the Minister of the Interior under Section 93 of the Land Code Act. That "approval" is very, very unlikely to ever be obtained and therefore the foreign heir who has "inherited" 1 rai of property or 10 rai of agricultural property will not be allowed to keep it. This is because Section 86 states, in part, "aliens may acquire land by virtue of the provisions of a treaty giving the right to own immovable properties and subject to the provisions of this Code". The last treaty was terminated in 1970 and there is currently no treaty in effect with any country that allows foreigners to acquire land. No ministers have allowed foreigners to inherit Thai-land. Under present law any foreigner who acquires land by inheritance will have to dispose of the land within a reasonable period (meaning within 1 year) to a Thai national (or other entity allowed to own land in Thailand). If the foreigner fails to dispose of the land the Director General of the Land Department is authorized to dispose of the land and will retain a fee of 5% of the sale price before any taxes or liens are d