Question: Can a foreigner own a freehold condominium in Thailand?
Answer: Buying a Condominium in Thailand is perhaps the simplest and easiest option available to foreigners who want to own property. The only restriction on purchasing a Condominium in Thailand is that the percentage of livable space sold to foreigners cannot exceed 49% of the total space available in the complex and that the funds used to buy the condominium have been remitted from abroad and recorded as such by a Thai Bank on a Foreign Exchange Transaction Form (Tor Tor 3). The owner of each Condominium unit is issued with a title deed (Chanote) clearly showing the foreigner as the legal owner of the unit.
Question: What are the requirements for a foreign individual or organization to purchase a condominium in Thailand?
Answer: In order for a foreigner to purchase a condominium one of the following requirements must be met:
1: A foreigner has permanent residence in Thailand in accordance with Thai Immigration Law.
2: A foreigner is allowed into or resides in Thailand in accordance with Thai Investment Promotion Law.
3: A foreign legal entity is in accordance with the Announcement of the Foreign Business Act BE 2542 (AD 1999), and has been granted an Investment Promotion Certificate in accordance with the Investment Promotion law.
4: A foreigner or foreign legal entity who brings foreign currency into Thailand, or brings in Baht currency from the account of a person residing abroad, or uses foreign currency from their deposit account. This requirement is normally met by the presentation of a Tor Tor 3 form which is provided by the bank receiving an incoming remittance from abroad.
Question: Are foreigners allowed to own land in Thailand?
Answer: Under strict application of the existing law it is officially prohibited for foreigners (including both individuals and companies), to own land in Thailand. However, 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.
The Land Code has been amended to allow foreigners to own land if all of the following requirements are met:
1. The land is for residential purposes.
2. The land does not exceed one rai (1 rai is approximately 0.4 acre).
3. No less than 40 million baht is remitted into Thailand for investment.
4. Foreigners abide by Ministerial Regulations governing the nature of the business that the foreigner will engage in, the period of time for maintenance of the investment, and the location of the land owned.
5. Permission is granted by the Board of Investment (BOI). 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. This does not happen often.
Question: Can a foreigner acquire land or property in Thailand through a Limited Company?
Answer: Yes, 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 land freehold through his Thai majority limited company. The land will be owned by the Thai Company, not by the individual. It is important that the non Thai minority shareholder should not own more than 38%, as any foreign shareholding structure greater than this is normally investigated by the Land department.
Question: What are the different types of rights to private land?
Answer: 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 (Chanote 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 Chanote, 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.
Question: My wife is a Thai National, can she own land?
Answer: Yes, since 1999! Before 1998, any Thai who married a foreigner would lose their right to purchase land in Thailand. They could, however, still retain land owned prior to marrying the foreigner. The Ministerial regulation from 1999 now allows Thai nationals married to foreigners the right to purchase land. The Thai spouse must prove that the money used for the purchase of freehold land is legally and solely theirs with no foreign claim to it. Normally this is done by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond his claim.
Question: I am married to a Thai. We would like to build a house on land given to us by my wife's mother. What is the best way to secure my investment (I am paying to build the house) in case of breakup.
Answer: Signing a long term lease with your wife and registering that lease at the Land Office is the most secure way of protecting your investment. If you have a child they may own the improvements in their name. We suggest you contact a lawyer who can advise you in more detail.
Question: Can foreigners own buildings even if they don't own the land?
Answer: YES. Although Thai law prohibits foreigners from owning land in Thailand, foreigners have the right to own buildings. A common structure is for the foreigner to enter into a long-term lease for the land from a Thai company or individual, and to build the home which the foreigner owns.
Question: Can I buy property in Thailand while out of the country?
Answer: Yes. A person wishing to buy property, including a foreigner, may purchase a property without being present at the time of registration of ownership at the Land Department. This shall be done by appointing, by a power of attorney, a lawyer or some other person to act on your behalf.
Leases & Rentals
Question: Can a foreigner enter into a long-term lease for land?
Answer: Because of the barriers in place to the purchase of land by foreigners, one of the most effective ways 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 or commercial leases, 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 3-year or longer 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.
Question: Are condominium long-term leases available?
Answer: Yes. Condominiums may be leased to foreigners for periods of up to 30 years and may have options to renew. This structure is becoming more popular for foreigners who want to "own" a condominium in a building which exceeds the foreign ownership quota. It is also a viable structure for elderly or others who want to enjoy a property for several years but do not want to purchase a property. Leases of greater than 3 years are required to be registered with the Land Department.
Question: Can a foreigner legally rent out property in Thailand?
Answer: Yes. A foreign-owned property may be leased out to another third party. Rental revenue is subject to a 12.5% tax on the annual income.
Michael Barricelli has been traveling to and living and working in Thailand for over ten years. He founded and opened a real estate business, Land of Smiles Property, in the resort city of Pattaya in 2005. His company has helped hundreds of expats buy or lease condominiums, homes, villas and land in Pattaya and Bangkok.
Prior to moving to Thailand, Michael lived and worked in the Boston area as a successful business executive with over twenty years of financial management and management consulting experience. Roles included Financial Controller at Harvard University, CFO/Director of Finance for several Boston-area hospitals, and Consulting Manager for a "Big 3" consulting firm.
For useful information about relocating to Thailand, foreign ownership of property in Thailand, and specific property offerings in Pattaya, visit the Land of Smiles Property website:
http://lospp.com/
