Ownership Advice

In Thailand, there are restrictions on foreigners directly owning land.  These restrictions were originally designed to protect against over-acquisition and control of large land areas in Thailand.

Notwithstanding that restriction, which exists in most jurisdictions in this region,  the real estate market has year-on-year developed, particularly in Phuket, to a sophisticated level, providing a safe and secure investment.

As with all investments however, professional advice should be sought to protect the investor in relation to the land on which property is built, the contractual rights, and any corporate structures involved in an acquisition.

In Thailand real estate development on land is permitted, as well as the leasing or sale of interests therein. Provided that the project developer or individual property owner concerned has a sound ownership structure in place, these properties can easily and securely be transferred to a prospective purchaser.

As laws have changed in Thailand, property ownership structures which were established several years ago may require updating and amending in order to meet current requirements.  In many cases a purchaser's lawyer may seek to make changes to existing structures in order to address tax consequences or to allow for a more secure holding structure.  All such recommendations are standard practice in Thailand, and experienced realtors such as The Phillips Group and the legal service providers we work with will be familiar with these requirements.

The typical methods of acquisition/investment can be:

  • Condominium direct foreign freehold ownership;
  • Condominium Thai freehold ownership via a Thai company. This will require creation of a Thai company and participation of Thai shareholders;
  • "Protected" Leasehold, which is a registered renewable lease of 30 years duration, where the power to renew the lease for consecutive terms of 30 years is vested in the lessee through a corporate structure;
  • 'Direct' Leasehold, which is a registered renewable lease of 30 years duration, where the power to renew the lease for consecutive terms of 30 years is vested in a responsible and credible developer, such as a public company, or a private company backed by appropriate individuals whom can be relied upon to maintain their interest beyond a 30 year term;
  • 'Freehold' ownership through a Thai company acquisition. This structure can be established provided that the nature of the investment with Thai shareholders is properly structured so as to satisfy local regulations while allowing the purchaser to maintain control over the assets and operations of the company.

It is worth noting that foreigners can own all types of buildings in Thailand whether it be apartment buildings, hotels or individual villas. This provides additional security to investors on top of the safety established by a secure land ownership structure.

Each method above has its particular advantages and each can be established with proper consultation with real estate and legal professionals in Thailand. In addition home buyers and investors are encouraged to discuss with professionals regarding appropriate tax structuring related to their purchase.

James Cook
Orient Law Associates

23/105 Moo 2, Tepkasatree Road, T. Koh Kaew, A. Muang, Phuket 83000, Thailand
T +66 76 238313 | E [email protected]