Foreign ownership

Thailand has so many different types of properties for sale that whatever your dream home is, you can realize it here if you do the paperwork right. Prices are a lot cheaper than Western houses but some aspects need close scrutiny especially wiring, water and ,most importantly, the deed title.

The real estate market in Thailand is fairly well modernized, but still features a great deal of private property sale, some sellers being reluctant to pay commission to real estate agents. Drive around any Thai town and you will see signs hanging from gates and walls advertising houses, condos and land for sale, directly by the owners. Often, the seller is actually a relative or a friend, who can speak a little English, acting as an agent for the owner. He or she might own a little store, or drive a taxi. This is often the quickest way to the bank, the quickest way to the Land Office, and the quickest way back to this web page!

You will also find many real estate agencies with offices on the high street, advertising on the internet and in the local and international press. Some operate primarily as agents for their own property developments and broker other properties as a sideline, and some are dedicated to the sale of real estate in general. Some will sell anything at all, and some, like Riviera Property Group, broker only properties which they have properly researched and documented such that they feel confident about the quality of the real estate and its background.

There are, despite the law limitations, many ways in which foreigners can legally own or acquire land in the Kingdom of Thailand :

Option # 1 (for single gentlemen)
Meet and marry a Thai woman you love and trust, buy house and land in her name, and live happily together ever after! This beautifully simple solution is, for reasons we will not discuss here, the least popular option. It is, however, not uncommon, and thank goodness for that!

Option # 2 - Limited Company
Foreigners can form a Limited Company and register the land as owned by the company. The foreigner can personally own maximum 49% of the company shares, and the remaining 51% must be in the names of Thai nationals (39% - 61% at the time of registration of the property; can be changed after). The foreigner is named sole executive director in the company's Articles of Association, and the Thai shareholder nominees all sign undated Share Transfer Contracts at the time the company is being registered. This effectively puts 100% control of the company and its assets in the hands of the foreign director. The Thai shareholders have absolutely no executive power within the company, nor need they be consulted over any issues at any time. They can also be replaced anytime at the director's wishes. (A Thai Limited Company must have minimum 7 shareholders - for example, one foreigner and six Thais).
A popular misconception which causes foreigners unnecessary concern is that such companies are owned by foreigners and could be exposed to imagined special (future) legislation by an imagined (future) extreme nationalist government with the intention of robbing foreigners of their real estate investments in Thailand. The fact is, however, that Limited Companies are owned by the shareholders, not their directors, the foreigners. As such, Limited Companies are Thai juristic entities subject to Thai commercial law, and any changes to legislation must apply to all Limited Companies, not only those whose directors happen to be foreigners. Thai law, both commercial and personal, is not so very different from legislation in most other countries, and it applies to all juristic entities in Thailand, foreign or Thai.

Option # 3 - Lease
Foreigners can lease land on a 30 year contract which contains a clause giving the lessee first option on a further 30 years. The same contract, registered at the Land Office (Department of Lands), can be renewed every 30 years for a maximum of 99 years. The lessor's heirs are bound by law to honor the agreement, and the lessee can bequeath the lease to his/her heirs in a Last Will and Testament. A potential weakness with this solution is, for example, that the lessor can conceivably claim that the lessee is mismanaging the land to the detriment of its value, and can sue to dissolve the agreement. Of course, this point must be proven in court, but could be a serious headache for the lessee. Also, although leases may be offered by reputable and trustworthy land owners, conditions can change through the passage of years.

Option # 4 - Contract of Credit
Instead of purchase or lease, the payment for land can be registered as a loan to the seller, documented in a Contract of Credit, registered at the Land Office. The value of the loan is set at the registered value of the land plus the actual building cost of any structures on the land. The buyer's name appears on the Title Deed as creditor, which effectively prevents the registered owner (debtor) from selling the land before repaying the loan. The weakness with this solution is that as property values rise, the value of the property will in the future be greater than the value of the loan, and the debtor could conceivably buy the land back at bargain price simply by repaying the loan.

Option # 5 - Condominium
A foreigner buying a condo must transfer funds in foreign currency from a bank account outside Thailand to an account at a Thai bank. The name of the transferree must be the same as the name that will appear on the final purchase contract, ie. the buyer. Transfers must be made in amounts USD 20.000 or more in order to qualify for a Foreign Exchange Transaction Form issued by the buyer's bank to verify that the originating funding came from outside Thailand in a currency other than Thai Baht. This bank certificate explicitly states that the Thai Baht funds are used "to purchase a condominium" in Thailand. The department of Lands (Land Office) will refuse to execute the ownership transfer if the bank certificate cannot be produced.
It is interesting to know that, unlike the common idea of condominium, to a large extent of the subject zones to a building development destined to foreign customers they have been realized “condominiums” that nothing have to envy to the normal single ownerships. In these realizations, in fact, the ground is registered to the condominium, while the buildings, usually luxurious villas, are of fact exclusive ownerships of foreigners. To realize this will be compiled two separated contracts of purchase, the buyer of a building will be of fact owner only as it regards the ground and therefore he will be bound to the payment of the relative quota of communal expenses (often not underestimables).