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Foreign Ownership of Real Estate in Thailand – The Basics
Many thousands of foreign nationals have taken up their right to own and use property in this exotic country. Whilst Thai property ownership laws have many peculiarities, with expert guidance from experienced real estate professionals and legal representatives, this area is easily navigated.
Technically, foreigners cannot own 'freehold' land in Thailand, but there are exceptions to this rule. In most cases, there are perfectly legal, simple and secure structures available to facilitate the purchase and continued unencumbered use of real property.
At Hunter Sotheby’s International Realty, and in conjunction with resident international legal experts, we can assist to guide you smoothly through the process of acquiring your dream home or idyllic investment property.
Condominium Title
This is the simplest and most straightforward property acquisition for a foreign national. The Condominium Act allows up to (but not exceeding) 49% of a condominium development to be acquired as ‘direct freehold’ title by foreign nationals.
The rules governing this acquisition method are very specific and dictate that (in most cases) funds should be remitted from overseas and that a Foreign Exchange Transaction form is obtained from a Thai bank, to register the purpose of the monies.
When buying from a development, you should check clearly whether your unit lies within the 49% direct freehold portion.
It is still possible to obtain freehold title outside of the allotted 49%. However, this must be undertaken by using a Thai legal company, in which you as an individual, or through a non-Thai juristic entity, have a controlling interest (see Corporate Ownership).
Leasing
Whilst freehold ownership of land in Thailand is restricted, ownership of the property on that land is not. Where you are purchasing a condominium outside of the 49% direct freehold allotment, or other property type, you generally acquire the land title as leasehold, for a duration of 30 years. The leasehold contract will usually (but not always) include an option to renew and extend the lease for 2 further 30 year periods.
Of course, as with other methods of acquisition, this approach can be facilitated through various structures to maximise tax or probate efficiency.
Corporate Ownership
It is possible to acquire land and the house or condominium on which it stands, through a Thai limited liability company.
The laws pertaining to foreign interests in a Thai legal entity dictate that there can be no more than two foreign directors, who between them can own up to, but not exceeding, 49% of the shares. Of the 7 shareholders required to formalise a limited liability company, at least 5 must be Thai nationals and between them they must possess at least 51% of the shares. While at first glance this might appear a somewhat fragile way to hold and control your valuable and/or sentimental Thai estate, in reality, it is a very common and surprisingly secure method.
For individuals who wish to acquire multiple properties, or who wish to structure ownership mindful of tax liabilities outside of Thailand, it is perfectly acceptable for the foreign interest in the Thai limited company to be a juristic person, such as a BVI (British Virgin Island) company.
Managed Developments
Increasingly, we are witnessing some new developments with more esoteric and imaginative ownership options. Such ownership options can include the purchase of a condominium taking a leasehold of the buildings, but with a shareholding in a company, sometimes Thai or an offshore entity, which may own and control the common areas of the development.
With our comprehensive understanding of the various processes, and in conjunction with expert legal due diligence to advise of the most suitable vehicle for purchasing, you can rest assured that with Hunter Sotheby’s International Realty, you are in experienced, knowledgeable and trustworthy hands.
>> If you require further information about foreign ownership of property in Thailand, feel free to contact us. |
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