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Can foreigners buy property in Thailand?
18/10/2022
As a Foreigners can own condominiums in Thailand but you cannot own land.
It is also possible for foreigners to set up a company in Thailand and purchase land through this company.
Many people dream about owning a villa as a foreigner in Thailand. Popular villa locations include the island paradises of Phuket and Samui.
The numerous attractions on offer from Thailand mean long-term living is a viable option for many, but can foreigners own land or property in Thailand?
The lack of land ownership rights available to foreigners who wish to own a villa is a big issue but it is not impossible to do.
Key points
- Foreigners cannot own land in Thailand, but can control land via a company or a registered lease.
- 100% foreign owned companies cannot own land, companies with a majority of Thai shareholders can own land.
- Foreigners can own buildings on the land (the villa).
- Thai laws forbids the use of Thai nominees.
- The maximum term for a lease is 30 years. It is possible to have an option to renew but there is often a risk that the renewed lease may not be enforceable in practice.
How can a foreigner buy property in Thailand?
In order for a foreigner to be able to own a villa in Thailand without needing to enter into a long term lease, there are two options:
- Starting either a Thai Limited Company with a Thai partner and then purchasing land via this company.
- Purchasing an existing company that already owns land (or has the capability to do so).
Owning a villa through a company in Thailand
As mentioned above, under Thai law foreigners cannot have ownership over land. However, a foreigner may own land in Thailand through a Thai company. The ownership of this company must satisfy the conditions of Section 97 of the Land Code.
Section 97 requires the company to have at least 51% of the total number of shares owned by Thai nationals. The remaining 49% can be owned by foreigners. In practice, many foreigners operate under a majority Thai owned company. In order to ensure the foreigner has control of its investment, a shareholder agreement or other contractual arrangements should be prepared.
In recent years, most land offices refuse to register land under a Thai company with a preference share structure that grants additional voting rights to the foreign shareholders. The reason for this is because such a set up is seen as being evidence of using Thai nominees.
Purchasing an existing company which owns a villa
If you are looking to purchase a company which has already been incorporated and owns the villa you wish to buy, the share transfer process will be one the key areas for your consideration.
The process for transferring shares is as follows:
1. Completion of a Share Transfer instrument
In order to start the process, a transferor has to execute a ‘Share Transfer Instrument’ with the transferee. A share transfer instrument needs to clearly state the names of the transferee and transferor, the number of shares being transferred and the share numbers. Finally, the instrument must be signed by both parties and at least 1 witness.
2. Update the Shareholders Register
Once the transaction has been completed, the company’s Shareholder Register must be updated accordingly and the change registered with the Ministry of Commerce. Failure to do so will invalidate the transfer.
3. Issuing a new share certificate
As mentioned above, Thai Limited Companies are required to issue a share certificate to the transferee.
4. Payment of Stamp Duty
In Thailand, the transfer of shares is subject to the payment of Stamp Duty. The rates are as follows, for every 1,000 Baht or fraction thereof of the paid-up value of shares, Stamp Duty at the rate of 1 Baht will be applied.
Share Purchase Agreements
Share Purchase Agreements are not a mandatory requirement, but it is recommended to use them as they offer protection to both the seller and the buyer.
A Share Purchase Agreement (SPA) is a document which is used to set out the terms and conditions relating to the sale and purchase of shares in a company. SPAs often contain many components, which are typically divided into two sections: one to specify the responsibilities and rights of the seller (the transferor), and one for the buyer (the transferee).
The SPA will notably detail the process of the ownership transfer (payment, share transfer and appointment of the new directors) and the warranties and representations from the seller (any liens on the land, tax liabilities etc).
Are there any restrictions to owning land through a company in Thailand?
While having an interest in land through a company may seem like a great way to own a villa in Thailand, there are a few very important things you must be aware of before doing so.
- The company must be active and in full compliance with Thai law. This means money should be passing through the company books, regular shareholder meetings must be organized and the minutes for these meetings must be prepared, bookkepping, tax filing and the mandatory yearly accounting audits must be filed.
- Nominee shareholders are not permitted.
- The company must have a legitimate business purpose and cannot be a dormant company.
- Any property which is owned by a Thai company which is used for the purpose of being the named director’s residence or holiday home requires the payment of housing and land tax. This is required regardless of whether the company receives any income from the company.
Do you wish to buy a property in Thailand?
How can Belaws help?
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Additionally, you can talk directly to one of our experts.
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Frequently asked questions
Can foreigner buy property in Thailand?
In order for a foreigner to be able to own a property in Thailand without needing to enter into a long term lease, there are two options:
- Starting either a Thai Limited Company with a Thai partner and then purchasing land via this company.
- Purchasing an existing company that already owns land (or has the capability to do so).
Can I live in Thailand if I buy property?
From September 2022, the LTR Visa will allow people who have invested USD 500,000 in real estate to apply for the visa.
Can I get visa if I buy a property in Thailand?
The LTR (available Sep 2022) allows applicants who have invested USD 500,000 in real estate in Thailand to apply for this visa
Can foreigners buy property in Thailand 2022?
Yes, foreigners are able to purchase condo units
Can a foreigner own a villa in Thailand?
No, foreigners cannot own land in Thailand. They can own condo units though (subject to conditions)
Where is the best place to buy property in Thailand?
Bangkok, Phuket, Samui and Chiang Mai are some of the most popular destinations for purchasing property
Do foreigners pay tax in Thailand?
Thailand imposes an income tax on any income earned in Thailand for both resident and non-residents individuals. This tax will be imposed regardless of whether such income is paid in or outside of Thailand.
Is rental income taxable in Thailand?
Any income earned in Thailand is subject to income tax in Thailand.
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