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Unlocking Land Ownership Rights for BOI Promoted Companies
08/06/2023
If you’re a foreign investor considering business opportunities in Thailand, land ownership and whether it is possible for a foreign-owned business may be a key consideration for your company. Thailand’s Board of Investment (BOI) offers various incentives to attract foreign investments and stimulate economic growth, including 100% foreign ownership and the possibility to own land.
This guide will explore the essential factors and requirements for foreign entities seeking land ownership rights through a BOI promotion.
Key points
- All BOI companies can own 1 Rai of land for office and residential purposes.
- Certain BOI promotions for specific business activities are allowed to own larger plots of land.
- If the company ends or loses its BOI promotion, the land must be disposed of or transferred within one year after the expiration of the investment promotion status.
- Thai limited companies can own land but must have over 50% of the shares owned by a Thai national(s).
- Treaty of Amity companies cannot own land.
What is the BOI?
Thailand’s Board of Investment is a special government agency that focuses on promoting foreign investment within Thailand. A BOI promotion removes many barriers to doing business in Thailand, such as the restrictions of the Foreign Business Act.
More detailed information relating to the Foreign Business Act can be found here.
Furthermore, the BOI also provides the following incentives for qualifying projects:
- 100% foreign ownership of a company.
- Reduced requirements for supporting work permits, i.e., no quotas for hiring foreigners.
- The ability to own land.
- Tax benefits such as income tax exemptions for a fixed period. Please note that tax incentives depend on specific promotions and are unavailable to all.
Can BOI companies own land in Thailand?
Yes, BOI companies can own 1 Rai of land for office and residential purposes.
Certain BOI activities and promotions are entitled to own larger plots of land under certain conditions and restrictions. However, they must have 50 million THB in registered capital.
The BOI has specific investment categories that permit land ownership of larger land areas, such as manufacturing, tourism, technology, and certain service sectors. However, in such a situation, the usage of land owned by BOI-promoted companies must align with the activities specified in their investment promotion. The land should be utilized for the intended business purposes as outlined in their BOI agreement. For example, if a company manufactures, the land can be used to set up production facilities, warehouses, or related infrastructure.
What are the qualifications for owning a larger plot of land as a BOI company?
In line with the provisions of Section 27 of the Investment Promotion Act B.E. 2520, the Board of Investment (BOI) has established the following requirements for a BOI company to hold land in Thailand:
- Foreign entities that have received investment promotion and have a registered capital of no less than 50 million Baht are eligible to hold land ownership rights for establishing office and residential premises. The specific criteria and conditions are as follows:
1.1 Land for office premises shall not exceed 5 rai.
1.2 Land for residential premises of executives or experts shall not exceed 10 rai.
1.3 Land for residential premises of workers shall not exceed 20 rai.
1.4 The office and residential premises may be located within the same area as the
location of the business premises or separately.
In exceptional circumstances with special reasons and justifications, the Board of Investment may consider granting permissions on a case-by-case basis.
- It is required that the land be disposed of or transferred within one year after the expiration of the investment promotion status.
- The Board of Investment has authorized the issuance of additional guidelines as deemed appropriate, such as the type of business and distance from the business premises.
Can Thai limited companies own land?
Registered companies in Thailand are eligible to own land, but certain requirements must be satisfied to ensure legal compliance and avoid penalties.
Firstly, the company must have shareholders who are Thai nationals. These Thai shareholders must hold over 50% of the company’s total shares. Therefore, foreign-owned companies can’t own land unless they have received a BOI promotion as discussed above.
Can a Treaty of Amity company own land?
While the Amity Treaty between the United States and Thailand grants certain privileges to US citizens, it is important to understand its limitations regarding land ownership. The treaty enables US citizens to own a majority of shares in a Thai company and engage in various business activities; however, it does not extend the right for foreign majority-owned companies to own land in Thailand.
Please click here for more information about the Treaty of Amity in Thailand.
Long term leasing of land
According to the Civil and Commercial Code, a foreigner can lease land in Thailand for 30 years. Renewal of the lease is possible, but the total duration cannot exceed 30 years from the renewal date.
Furthermore, foreigners can lease land in Thailand for industrial and commercial purposes, with a maximum lease period of 50 years.
As per the Hire of Immovable Property for Commerce and Industry Act B.E. 2542, the specific rules and conditions for the lease of immovable property for commercial and industrial purposes by foreigners must be satisfied. Under this Act, a foreigner can choose between leasing land not exceeding 100 rai (approximately 40 acres) or more than 100 rai.
Requirementsfor leasing land not exceeding 100 Rai
- The lease duration must exceed 30 years but not exceed 50 years. The lessor and the lessee may agree to renew the contract, but the total duration must not exceed 50 years from the date of the agreement.
- The lease contract must be made in writing and registered with the competent official.
- The lessee must have possession of the leased property.
- The lease right can be used as collateral for fulfilling obligations through a mortgage.
- The rights and responsibilities of the lessee can be inherited, and the lessee can sublease or transfer their lease right to a third party unless otherwise specified in the lease contract.
- As registered under this Act, the immovable property to be leased must be located in an area designated for commercial or industrial purposes according to the Town and Country Planning law, or in an industrial estate zone established by the law on Industrial Estate of Thailand.
- The type of commerce or industry for which an alien can apply for lease registration must comply with the law on the Business Operation of an Alien, allowing aliens to engage in business activities.
- A commercial or industrial entity applying for lease registration must fulfill one of the following criteria before registration:
- The commerce has an investment cost of at least 20 million Baht.
- The industry is eligible for a certificate of investment promotion under the law on Investment Promotion.
- The commerce or industry benefits the economic and social well-being of the country as declared by the Minister of the Ministry of Interior and endorsed by the cabinet.
Requirementsfor leasing land exceeding 100 Rai
In the case of leasing land exceeding 100 rai, in addition to meeting the rules above, at least one of the following criteria must be satisfied:
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- Such commerce or industry operations should add value to exports or contribute to employment within the country.
- The operation should not be suitable or feasible to be conducted within the Kingdom unless there are inadequate alternatives.
- The operation should incorporate state-of-the-art production processes or contribute to technology development.
- The operation should bring significant benefits to the country’s economy and society as declared by the Minister of the Ministry of Interior and endorsed by the cabinet.
- If the lessee, sub-lessee, or transferee of the lease right is an alien, the investment in the operation of such commerce or industry should be at least 100 million Baht, excluding the lease cost. Furthermore, the total amount of money invested must be foreign exchange brought into the Kingdom or withdrawn from a foreign currency deposit account or non-resident Baht account.
How can Belaws help?
For more information about ownling land in Thailand, why not talk to one of our experts now?
Please note that this article is for information purposes only and does not constitute legal advice.
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Consultations can be hosted via WhatsApp or Video Conferencing software for your convenience. A consultation with one of our legal experts is undoubtedly the best way to get all the information you need and answer any questions you may have about your new business or project.
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Frequently asked questions
What are the BOI work permit requirements?
The requirements for a BOI work permit in Thailand are not subject to the same mandatory capital and minimum Thai staff requirements as other company structures. BOI-promoted companies have more flexibility in hiring foreign employees.
What is a BOI work permit?
A BOI work permit is a work permit issued to foreign employees working in a company promoted by Thailand’s Board of Investment (BOI). It allows foreign workers to legally work in Thailand.
hat is a BOI letter in Thailand?
A BOI letter refers to an invitation letter issued by the BOI after approving a new position for a foreign employee in a BOI-promoted company. This letter is submitted to the Thai Embassy as part of the visa application process.
How can I obtain a work permit in Thailand?
To obtain a work permit in Thailand, including a BOI work permit, you need to follow a specific process. First, your employer, in this case, a BOI-promoted company, must open a new position on the online BOI platform. Then, you will go through a qualification approval process, which includes submitting your qualifications and work experience. Once approved, you can proceed to apply for a visa and work permit at the One Stop Service Center.
How to obtain a work permit and visa in Thailand?
A: To obtain a work permit and visa in Thailand, including a BOI work permit and visa, you need to follow these steps:
- Have a job offer from a Thai employer, preferably a BOI-promoted company.
- Your employer opens a new position for you on the online BOI platform.
- Obtain an invitation letter from the BOI and apply for a Non-Immigrant B visa at the Thai Embassy or Consulate.
- Create a profile on the BOI’s Single Window system for the newly opened position and get your qualifications approved.
- Once approved, schedule an appointment at the One Stop Service Center to receive your visa and work permit.
- Remember to do the 90-day report and follow the renewal process when necessary.
Can I work in Thailand without a work permit?
No, it is illegal to work in Thailand without a work permit. Foreigners must obtain a valid work permit to engage in employment activities in Thailand. Failure to do so can lead to legal consequences for both the foreigner and the company they work for.
What are the BOI incentives in Thailand?
BOI incentives in Thailand include 100% foreign ownership of a company, reduced requirements for supporting work permits, the ability to own land, and tax benefits such as income tax exemptions for a fixed period. However, it’s important to note that specific incentives may vary depending on the BOI promotion and industry.
What is a BOI company in Thailand?
A BOI company in Thailand refers to a company that has been promoted by the Board of Investment (BOI). These companies receive certain benefits and incentives from the Thai government to encourage foreign investment and business activities in Thailand.
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