For foreigners looking to invest in Thailand, navigating property ownership regulations can be a critical step. Generally speaking, foreign nationals and wholly owned foreign companies are not permitted to own land in the Kingdom of Thailand; however, there are some important exceptions to this rule.

1. 49% Ownership in Condominium Units

Foreign nationals can own up to 49% of the sellable area in a condominium building through freehold ownership. If this quota is full, they can opt for a leasehold agreement or purchase through a Thai company where foreign shareholders hold no more than 49%. Leasehold ownership, available to all foreigners, typically allows leases of up to 30 years, with some projects offering renewal options.

2. Land Ownership by BOI-Promoted Companies

Companies promoted by Thailand’s Board of Investment (BOI) may be granted a license to own land, provided the land is essential for their business operations. This is contingent on the company engaging in qualified business activities as specified by the BOI.

3. Land Ownership in Industrial Estates

Manufacturers and service providers operating under the privileges of the Industrial Estate Authority of Thailand (IEAT) may qualify for land ownership within IEAT-registered industrial estates. In such cases, a Chanote title may be conditionally granted, depending on the nature and requirements of their operations.

Service Inustries Eligible for Land Ownership in IEAT Estates

Specific service industries are also permitted to own land in IEAT-registered estates and benefit from other tax and labour privileges. These industries include:

• Businesses related to the buying, selling, and production of industrial goods; management of logistics and supply chains, such as warehouses, container depots, truck terminals, and distribution centres;
• Businesses related to exhibition and conference centres and the display of goods;
• Businesses providing repair, maintenance, and engineering services;
• Businesses involved in industrial research and development, telecommunication, computer, information, multimedia, documentary, and entertainment media services;
• Businesses related to health and sanitation, such as hospitals, nursing homes, integrated health development centres, sports recreation and development centres, and health clubs;
• Businesses related to education, such as educational institutes and training centres, and other related service businesses.

Foreign individuals who bring in more than forty million Baht of foreign exchange into country are entitled to own up to 1 rai (1,600 sqm) of land for residential purposes, subject to a variety of special conditions.

A note on the so called “Thai company” route to foreign land ownership:

Over the years, many foreigners have established Thai companies where more than 50% of the shares are held by Thai nationals, and the companies are structured so that the foreigner retains management control. This practice is not strictly illegal, but it is controversial and falls into a grey area.

If it is found that these Thai shareholders are, in effect, nominees for foreign companies (the test being whether the shareholders have sufficient financial capacity and the source of capital), then they could face jail terms of up to 3 years and fines, because nominee shareholding structures are expressly forbidden by the Foreign Business Act.

In 2006, land departments throughout the country began requesting Thai shareholders to submit proof of the sources of funds for land registration, and some transfers were denied.

Yet, to our knowledge, this has not been retroactively enforced on existing company structures and continues to be widely employed throughout the country.

Due to the controversial nature of the arrangement, we advise clients against this ownership route and suggest that interested parties seek further expert legal advice before entering into any such agreement.

Image source: Photo by Scott Graham on Unsplash