FAQ
Legal Information
Moonrise developments are not lawyers and would recommend seeking legal advice before entering into any property purchase in Thailand. The majority of our clients have used European law associates in Bangkok to seek independent legal advice. They have prepared the following information to give an over view of the law as it stands this is not designed to replace sound legal advice.
Which Thai laws govern foreign ownership and purchase of land in Thailand?
Ownership of land in Thailand is governed by the Land Code of BE 2497 (1954), the Civil and Commercial Code, the Land Reform for Agriculture Act BE 2518 (1975), and the regulations set forth by the Ministry of the Interior.
Are foreigners prohibited from owning land in Thailand?
Under strict application of the existing law it is officially prohibited for foreigners, including both individuals and juristic entities (e.g., companies or partnerships), to own land in Thailand. Never the less, there are exceptions to the prohibition found in the law itself. There are also other methods of arranging for the purchase of land in Thailand.
According to section 97 of the Thai Land Law, the definition of a foreigner includes a Thai registered company or partnership in which more than 49% of the capital is owned by foreigners or of which more than half the shareholders or partners are foreign citizens.
Can foreigners own property even if they do not own the land?
Although Thai law prohibits foreigners from owning land in Thailand, foreigners have the right to own buildings. If foreigners wish to purchase land in Thailand in order to build property, they have two options; first, forming a joint venture with majority Thai ownership, and second, procuring a long term lease with a right of renewal.
What about long term leases with rights to renewal?
Because of the barriers in place to the purchase of land by foreigners, the most effective way to acquire land that a building resides on is to purchase the land on a 30-year leasehold with an option to extend the lease for subsequent 30-year periods. Leases are limited to 30 years, except on land for industrial purposes, which may be established for 50 years. Similarly, lease extensions are capped at 30 and 50 years respectively. Possession of the land leased for an already owned building is protected by the fact that the building rests on the land; ownership of the building is separate from the land and cannot be seized by the lessor once the lease expires. Leases exceeding three years are enforceable for only three years unless they are registered with the Land Department. Therefore, a 30-year lease must be registered with the Land department. In addition, a lease continues to be valid even in the event the property on the land is sold.
How can a joint venture be created to acquire land or property in Thailand?
One method foreigners can employ to acquire land or property is by forming joint venture companies with majority Thai ownership but with adequate safeguards to protect the foreigners' minority interest. If a foreigner plans to run a business in Thailand then he may purchase the freehold of the land through his Thai majority limited company. The land will be owned by the Thai Company, not by the individual.
How does a limited liability company allow foreigners to own property?
Purchasing property with a limited liability company is the most popular method for foreign investors as the Articles of Association can be varied to allow greater protection for foreign minority shareholders. The regulations vary throughout Thailand, but the Land Office generally requires that Thai nationals own a majority interest in a company if they wish to purchase land legally.
What are the different types of rights to private land?
Land can be controlled through the right of possession or through title deeds and other documentation. Individuals who actually possess and use land may have the right to possess such land under the Civil and Commercial Code. The primary form of evidence for ownership of land is a title deed (Chanot or Nor.Sor 4). These title deeds must be registered at the Land Department in the province in which the land is located. It should also be noted that a parcel of land may be commonly held by several individuals. A person whose name appears on a Chanot, or Land Title Deed, has all the legal rights to that land: can produce the deed as evidence of ownership to Government officials, can prove the land has clearly defined boundaries, and can engage in legal acts upon that land as allowed by law.
Can the spouse of a foreigner still own land in Thailand?
Until recently, Thai nationals who married foreigners became ineligible to own land in Thailand. The understanding was that once the foreigner and the Thai national were married the land became community property; officials believed this was perhaps a too convenient way for foreigners to circumvent existing land law. At present, however, policy has changed; a Thai spouse is now legally allowed to own land in Thailand. The foreign spouse may be required to sign a letter declaring the property to be the separate property of the Thai spouse, consequently waiving any claim on the land.
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Real estate in Thailand is attractive for a variety of reasons. Owning a second home is the dream of many. Others hope to either spend their retirement in a leased condo or make real estate purchases as a short or long term investment. While there are a variety of restrictions on foreign citizens leasing and owning property and houses or condos in Thailand, there are an equal variety of legal opportunities. |