According to Thai law, foreign nationals are restricted from purchasing freehold land. However, they can legitimately secure property with the help of legal support to control that and own land. A foreign national cannot own more than 49% of the shares in a Thai limited company that owns freehold land under the company’s name. However, they may own a building as distinct from its land, such as a condominium unit.
How can foreigners own land in Thailand?
The secure and hassle free methods for owning a land include using a leasehold agreement or setting up a Thai limited liability company.
Land title deeds are divided into 3 main categories:
1.) Chanote (Nor Sor 4 Jor),
2.) The Nor Sor 3 Gor
3.) Nor Sor 3
Chanote is the most well known and the preferred type and grants the holder of this document the full rights over the land. Upon which you may sub-divide, sell, transfer, assign, utilize and possesses. Usually all condominiums are to be built on Chanote titles. The measurements of the land are most accurate making it the most preferred title deed to hold if you are planning to own a land in Thailand.
Nor Sor 3 Gor is a title document that is issued when a land is awaiting a full title deed. The land is measured by the Land Department and determines the exact boundaries so the owner knows exactly the area he owns. This type of land may be sold, transferred, or mortgaged or divided. Owner of the land may also file a petition to the Land Department requesting to change it to a full title deed (Chanote), and the Land Department may do so if there is no opposition made against the petition.
Nor Sor 3 is issued by a district land officer and has not yet been measured by the Land Department. Having no exact boundaries can cause problems in the future with regard to determining the area your land is while division to neighboring land. This title document determines the right to merely possess the land, but without transferring actual possession. The owner cannot sell or transfer property subject to it being publicized for at least a 30 day period. However, the Nor Sor 3 title may later be switched to a Nor Sor 3 Gor, or Chanote in the future.
There are a number of other land titles also available, however these do not afford the owner many rights to the land under Thai law and are therefore not recommended.
In Thailand, the land measurements are a bit different from European, UK, or US measurements. The land size or area is often shown in local measurement units which are usually either Wah,Talang Wah or Rai. (See land measurement for more info).
A freehold property purchase can be slightly slower and more expensive than leasehold, but its main benefit is that the owner has the right to sell or lease the property and to develop the property within the guidelines under Thai law.
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.
Unless you are an American, as 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.
See legal for more info.
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.
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.
This is the quickest, cheapest option for purchasing property in Thailand, with the least potential for confusion. This option also requires less responsibility.
Leasing a property has less control than a freehold title, as the building is not owned forever. Even as a 30 year lease can generally be renewed 2 times consecutively times making it a total of 90 years, there is still a possibility that a lease may not be renewed, due to changes in circumstances or the law.
The possibility of the land owner may refuse to sign the registration for the lease extension after 30-years. The lessee can sue for breach of contract leading to legal process which is expensive and time-consuming. It also entails the difficulty in obtaining a mortgage for the lease, a lower resale value and potential lawsuits from the land owner for lease violations.
A condominium is basically defined as a building with distinct portions that can be sold for personal ownership.
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 Foreign Exchange Transaction Form, which is provided by the bank receiving an incoming remittance in foreign currency from abroad.
A foreigner or foreign legal entity can acquire up to 49% of the total unit space of all the units in a registered condominium building.
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.
*Note: for more information on foreigner property ownership please see our buyer's guide on Thailand Property Ownership