Property Law

Note that the information on this page is intended to serve as a general guide to the property buying process for foreign (non- Thai) purchasers of property in Thailand. We highly recommend you consult our team and a lawyer to assist you at the time of purchase to eliminate any doubts you may have.

Here a useful summary.

Regulations on Land Ownership by Foreigners in Thailand
Foreign Ownership of Condominiums in Thailand
Leasing Regulations in Thailand
Ownership Regulations for houses for Foreigners in Thailand
Rules on Real Estate Ownership for Spouses in Thailand
Property Ownership Through Nominee Ownership in Thailand
Usufruct Rights on Real Estate Properties in Thailand
Superficies Rights in Thailand
Real Estate Acquisition in Foreign-Controlled Thai Company
Land Title Deeds in Thailand

1. Regulations on Land Ownership by Foreigners in Thailand

Historically, a discrepancy existed between two laws regarding the land ownership rights of foreigners in Thailand.

Foreigners were granted property rights equivalent to Thai nationals under the Thailand Civil and Commercial Code, allowing ownership of land and any structures built upon it. However, the Land Code Act B.E 2497 (1954) prohibited foreigners from owning land in Thailand, extending this restriction to condominiums under the Condominium Act.

This conflict was resolved in 1970 when the treaty permitting foreigners to own land in Thailand under the Thailand Land Code Act was nullified.

Home Ownership by Foreigners Before 1970
Foreigners purchasing homes in Thailand could lease the land and own the house as personal property. It was recommended to obtain ownership over the house in any land lease arrangement, which typically couldn't exceed 30 years.
Additionally, under Section 84 of the Thailand Land Code, foreigners could acquire land for various purposes, subject to Ministerial Regulations and approval. However, the acquisition was limited, with foreigners allowed only 1 rai (1600 square meters) of land per family for residential purposes, and similar restrictions applied to other land use purposes.
However, treaties granting these property rights to foreigners ceased in 1970. Since then, no treaties allowing foreigners to acquire and own land in Thailand have been established. Violation of Section 86 of the Land Code Act carries penalties under Section 111.

Land Code Amendment Act of 1999
The Land Code Amendment Act (1999) theoretically allows foreigners to own up to 1 rai of land for residential purposes, requiring a 40 million baht investment through the Board of Investment. However, this option is impractical and non-transferable by inheritance, with ownership ceasing upon the owner's death.

Foreigners as Statutory Heirs
Similarly, under Section 93 of the Land Code Act, foreigners married to Thai nationals can inherit land as statutory heirs, subject to Ministerial approval. However, Section 86 mandates that inherited land must be sold within a year of acquisition.

Land Ownership by Foreign Companies
Foreign companies, including Amity (US) companies and others, are also barred from land ownership. However, foreign corporations making substantial investments benefiting the Thai economy may receive special privileges for land ownership under specific acts.

Ownership through a legitimate Thai company, partly foreign-owned, is permissible under Thai law, provided foreign ownership does not exceed 49%. However, this structure does not offer long-term security for foreign control of real estate in Thailand.

The common practice of using a Thai company structure for land ownership declined after proposed amendments to the Foreign Business Act and new land office guidelines.

The Thai government has undertaken discussions to address loopholes and conflicts in land ownership laws. Under amended regulations, authorities are instructed to scrutinize transactions suspected of evasion or alien involvement.

Land Ownership through Nominee
Using nominee shareholders to circumvent land ownership laws violates regulations and creates unlawful foreign ownership, disregarding share ownership in the company.

2. Foreign Ownership of Condominiums in Thailand

According to Section 19 of the Thailand Condominium Act, both natural and juristic non-Thai nationals can hold absolute ownership of a condominium unit in Thailand. However, this ownership is subject to the terms and conditions outlined in the Condominium Act. Additionally, aliens or foreigners are permitted residence in Thailand and are governed by Immigration Law and Investment Promotion Law, respectively.

Foreigners interested in purchasing a condo in Thailand must adhere to the requirements for foreign ownership specified in Thai law. As per these regulations, foreigners can own up to 49% of the total floor area of all condo units, while the remaining 51% must be owned by Thai nationals.

Absolute ownership of a condominium unit in Thailand
Absolute ownership of a condominium unit in Thailand must be registered and licensed under the Condominium Act of 2008. This act prohibits a higher proportion of foreign ownership in a condo building, ensuring that a Thai national owns a larger portion of the condominium unit.
However, tourist resort condos in Thailand are often sold on a leasehold or freehold basis to foreigners due to low demand from Thai nationals. Many resort condos struggle to sell enough units to Thai nationals to maintain majority ownership. Consequently, even Thai-owned condominiums are leased to foreigners under leasehold agreements.
This trend led foreign-owned companies to purchase condominium units as an alternative to leaseholds, although this practice declined due to new regulations issued by the Land Department, which deemed land ownership by partly foreign-owned Thai companies illegal.

Condominiums in a Leasehold Setup
Leasehold condominiums in Thailand fall under the chapter on Hire of Property stipulated in Sections 537-574 of the Civil and Commercial Code. Under Thai law, leasehold is considered a contractual agreement rather than a real property right, with a fixed term not exceeding 30 years.

Termination of a lease agreement can occur if the lessee fails to comply with the lease terms or upon the lessee's death. Leasehold agreements cannot be freely sold during the lease term, as they are not considered assets. The lessee can only assign their contract rights with the permission of the registered owner of the condominium unit, and leasehold agreements are not automatically transferable by inheritance.

Although acquiring leasehold apartments is legal, buyers should carefully review the written agreement and developer's intentions. Leasehold agreements offer fewer protections under the law compared to licensed condominium developments. Licensed condominiums provide government control, actual ownership, and protection under the Thailand Condominium Act, whereas leasehold condominiums offer possession under the Civil and Commercial Code and rely on individual protections through private agreements.

Considerations When Buying a Condo under a Lease Agreement
Several considerations arise when purchasing a condominium under a lease agreement, including voting rights, selling and assigning a leasehold condo, inheritance of a leasehold condo, lease term, lease contract content, and additional property tax burdens.

Voting rights typically remain with the owner of the unit and are not automatically transferred to the leasehold purchaser. Selling leasehold condos can disrupt the democratic voting system in a condominium unless specifically arranged.

Leasehold buyers possess only a personal right of possession for a specified term and cannot sell or assign the leased condo apartment during the lease term without the owner's consent.

Inheritance of a leasehold condo
Inheritance of a leasehold condo requires a succession clause in the lease agreement, although this does not guarantee full ownership transfer.

Lease agreements cannot exceed 30 years, and any longer terms will be reduced to 30 years in accordance with Thai law.

Leasehold condominiums are subject to rental tax, conveyancing tax, fees, and a lease registration fee, creating additional financial burdens for leasehold purchasers.

3. Leasing Regulations in Thailand

A lease, or rental agreement, is a contractual arrangement wherein the lessee (user) pays the lessor (owner) for the utilization of an asset.

Sections 537 to 571 of the Thailand Civil and Commercial Code govern property leases in the country. Unlike some jurisdictions, Thailand does not have specific laws solely addressing leasehold rights. Instead, leasehold rights are considered real property rights under the Civil and Commercial Code, particularly within the section on the hire of property under the "Contracts" category.

Section 537 of the Thailand Civil and Commercial Code defines a lease as a contract in which the lessor (referred to as the "letter") agrees to grant the use or benefit of a property to another person (the "hirer" or lessee) for a limited period, with the hirer agreeing to pay rent.

In Thailand, a lease is essentially a standard contract with a fixed term. It cannot be transferred or sold as an asset; however, it can be assigned as a hire of property contract with the permission and support of the property owner.

Despite the benefits of leasing, there are drawbacks associated with property leases in Thailand. One such drawback is the termination of the lease agreement as a personal contract right of the lessee upon the lessee's death. Additionally, Thai law does not grant the heirs, heiresses, or successors of the lessee automatic rights to inherit the leased property.

Inheritance Rights in Lease Contracts
According to Thai laws, a lease or hire of property is not considered an inheritable right. However, it can only be assigned as a contract with formal acceptance from the owner and registration on the title deed. Under Thai law, heirs or successors do not automatically gain rights over the lease upon the lessee or tenant's death.

Firstly, it's crucial to understand that a lease or rental is not a tangible asset but rather a contractual and personal right of the lessee. Therefore, the lease agreement, as affirmed by the Supreme Court of Thailand, terminates upon the death of the lessee, who is the core party in the lease agreement.

Moreover, as outlined in Section 569 of the Thailand Civil and Commercial Code, if the property owner passes away, the hire contract is not automatically terminated. It remains valid against the heirs or successors of the owner, but only in relation to genuine hire of property or lease rights.

Additional contractual rights within the lease are not considered genuine lease rights under Thai contract law. They do not transfer to the new owner and are terminated upon a change in ownership, as specified in Section 569. Therefore, the new owner must agree to these clauses in the lease agreement; otherwise, they are not bound by any promises made by the previous owner to renew the lease or assign it to the lessee's heirs.

Finally, the death of the owner or transfer of ownership of the property leased could result in the lessee having a lease contract that is only partially enforceable against the new owner through legal action.

Terms of Contract
According to property hiring laws in Thailand, any property lease or rental with a fixed term exceeding three (3) years, as stipulated in Section 538 of the Thailand Civil and Commercial Code, must be documented in writing and recorded on the ownership title deed—be it for land or condominium—as maintained in the registers of the provincial or local land office.

Any lease agreement between the involved parties (lessee and owner) that is not registered with the Land Department of Thailand is enforceable by legal action for a maximum term of three (3) years, as specified in Section 540. Additionally, Section 564 dictates that the term of a registered lease agreement cannot surpass thirty (30) years and is automatically terminated at the conclusion of the registered term.

Conversely, a short-term contract does not necessitate registration but must be in written form to be enforceable by legal means. In practice, a lease can only be registered over land with a confirmed right of possession or freehold ownership title deed, or land with a title. In the case of a licensed condominium, a long-term condominium apartment lease is registered with the local land office where the condominium is situated and will be recorded on the backside of the condominium unit ownership title deed.

Rent Considerations
In adherence to Section 537 of Thai Law, payment of rent stands as a fundamental element of any lease agreement. Consequently, possessing a real property under a lease agreement in Thailand without payment of rent renders it unenforceable as a hire of property under the Thailand Civil and Commercial Code.

Furthermore, a lease lacking a specified rental price falls outside the purview of property hire regulations, potentially being governed by alternative legal frameworks such as right of habitation or usufruct laws. To register a lease agreement, rent must be included in the terms. Registration may be refused if the lease or rental price is deemed unreasonable or non-viable for the lease.

Contracts Exceeding 30 Years
In Thailand, the registration term of a lease must not exceed thirty (30) years. Consequently, upon the expiration of the fixed registered term, the lease automatically concludes. Some real estate leasehold sale contracts target foreigners (aliens) and propose greater rights than a standard 30-year lease.

However, these contracts, typically between the seller and leasehold buyer, can be intricate. They often necessitate separation of ownership between the house and land, and may include additional prepaid 30-year hire periods, along with an option to transfer the land to a freehold title. Legally, such contracts are viewed as agreements between two or more parties and are binding solely between those parties. They are not protected by Thai laws and could be deemed void or illegal.

In 2008, new land office regulations implemented by Thai authorities prohibit the registration of lease agreements with obvious or illegal provisions, such as a foreigner's right to transfer land to a freehold title and pre-paid 30-year renewal terms. Consequently, these provisions are now commonly included in a separate addendum to the lease, which forms part of the lease arrangement but is not registered with the Land Office, despite the Land Department of Thailand considering such sale methods void or illegal.

4. Ownership Regulations for houses for Foreigners in Thailand

In Thailand, laws dictate that foreigners are not entitled to own land within the country. However, there are provisions allowing ownership of buildings or structures under specific conditions.
There are essentially two methods for foreigners to gain ownership over a dwelling constructed on land separate from it. The first method involves constructing a building, with or without a right of superficies, on leased land. The second method entails acquiring a pre-built structure and obtaining a lease for the land on which it stands.
The preferred approach for foreigners purchasing a house in Thailand involves a registered land lease coupled with legal ownership of the structures on the leased land.

Requirements for Foreigners Purchasing Property
The acquisition of a home or property in Thailand is governed by specific laws, similar to real estate regulations in other countries. However, it's important to note that foreigners are barred from owning land in Thailand. Land ownership is regulated by the Thailand Land Code Act, while house ownership falls under the Thailand Condominium Act.

In Thailand, any building or structure constructed on land may be possessed and transferred separately from the land itself. When transferring ownership of a house independent of the land, the transfer process must adhere to the Thailand Civil and Commercial Code outlined in Property in Book IV. Additionally, it must be documented in writing and registered with the Land Department branch or provincial office.

Furthermore, the right to use the land, such as through land lease or right of superficies, is contingent upon ownership of a house on land owned by another party. Consequently, when the land use rights expire, ownership of the house on the land also ceases.

Moreover, title deeds are not issued for buildings or structures in Thailand. The process of transferring legal possession of an existing structure begins at the local land office, with a public announcement required for thirty (30) days at specific locations. Following this period, the Land Department branch in the locality completes the ownership transfer process for the building.

Documentation of tenure typically involves an authorized building permit or a document containing the sale of the building, both processed through the Land Department office in the locality.

Requirements for Transferring Ownership of an Existing House
The transfer of legal rights for an already constructed building follows several steps involving both the seller and purchaser.

Initially, both parties must be present during the transaction announcement at the local land office in Thailand. If one party is absent, a representative may be appointed with authorization from the land office.

Subsequently, legal documents, such as building permits and identification cards of both parties, must be provided during the transfer process. The building permit verifies the seller as the rightful owner of the structure and their authorization for construction on the land. In cases where a building permit is absent, the structure may have been unlawfully built. Following this, the land department office issues four (4) notice letters of the transaction to be published at four (4) specified locations, inviting any community members to contest the transfer.
Lastly, after the designated period, both parties reconvene at the land department. If no contestations arise, both parties sign the legal document of the transaction for it to take effect.

The Ta.Bian.Baan
The Thai government issues a booklet known as Ta.Bian.Baan, which serves as an official registration book.

This booklet lists Thai nationals residing in the building, serving as evidence of residency rather than tenure. Ta.Bian.Baan for Thai nationals and foreigners are distinct, resulting in two (2) types: the blue book and the yellow book. Additionally, the value of the yellow book is limited.

5. Rules on Real Estate Ownership for Spouses in Thailand

According to Thai law, a foreign national cannot jointly own property with their Thai spouse. Additionally, they cannot have significant ownership of land as shared marital assets. This means that even if a foreigner uses their own funds to purchase land in Thailand after marrying a Thai national, the Thai spouse will be the legal owner of the property, regardless of who paid for it.
This rule extends to other real estate assets in the country. Property purchased as a personal asset will not become marital property between spouses.

Risks of Foreigners Buying Property Under the Thai Spouse's Name
A Thai national, who is married to a foreigner, can purchase property using their identity, but this poses risks and involves legal requirements. If a Thai citizen with a foreign spouse wishes to purchase property, evidence must be provided that the funds used for the purchase are lawfully obtained solely by the Thai spouse.
This requirement also applies to the purchase of condominium units that exceed the permitted foreign ownership share. In such cases, the Thai spouse must demonstrate that the funds used are privately owned or acquired under specific provisions of the Thailand Civil and Commercial Code.

The concept of Sin Suan Tua encompasses assets:
Privately owned by either spouse before marriage Used separately by either spouse, such as work-related properties Acquired by either spouse during the marriage through gifts or inheritance Designated as personal assets (Khongman) The Thai spouse must provide official documentation proving that all funds used for the property purchase are privately owned by either spouse and not jointly held.

The Land Department of Thailand verifies the legitimate source of funds used for the purchase, especially if the foreign spouse is not a resident of Thailand. These conditions also apply when registering land ownership at the Land Department Office to prevent joint ownership between the Thai and foreign spouses, in accordance with Thai family laws.
The aim is to prevent the Thai spouse from acting as a proxy landowner on behalf of the foreign spouse. The authentication letter is based on Section 1472 of the Thailand Civil and Commercial Code, which states that privately owned assets traded for other property remain privately owned.

Foreigner as a Statutory Heir
In theory, a foreign spouse married to a Thai citizen can inherit land as a legal heir and record ownership with the approval of the Minister of Interior, as stated in the Thailand Land Code Act. However, the tenure is subject to limitations outlined in Section 87 of the code.

It's important to note that this provision applies only to property acquired through a treaty and not to foreigners inheriting land as legal heirs from Thai partners.

Foreign spouses who inherit land must transfer ownership to a Thai national within one year. This provision applies only to foreign individuals inheriting land as legal successors and not to those inheriting land under a will.

Foreigners inheriting condominium units must meet the requirements of Section 19 of the Thailand Condominium Act to record ownership with the Land Department. If these requirements are not met or if ownership would exceed the allowed foreign ownership limit, the unit must be sold within one year, or the Land Department Director-General may sell it on behalf of the foreigner.

6. Property Ownership Through Nominee Ownership in Thailand

In Thailand, companies with foreign participation often structure themselves as majority Thai-owned entities to avoid penalties related to foreign ownership or business restrictions. This is achieved by employing Thai nominee shareholders or proxies, allowing foreigners to circumvent regulations on foreign businesses in Thailand.

Thai Nominee Shareholders in Foreign-Owned Companies
Using Thai nominee shareholders to bypass the Foreign Business Act (FBA) is illegal under Thai law and can result in criminal charges if discovered. A Thai company with minority foreign ownership using nominee shareholders is classified as a foreign-owned entity. However, the definition of a Thai nominee shareholder remains somewhat ambiguous. Until stricter enforcement of anti-nominee laws is implemented, these foreign-controlled Thai companies may continue to operate, engaging in businesses prohibited or restricted to foreigners in Thailand.

Nominee Ownership Arrangements
Nominee ownership occurs when a Thai national purchases land on behalf of a foreigner or acts as the foreigner's agent in the land transaction. It is common for foreigners to acquire land in Thailand by registering ownership in a Thai national's name, in exchange for a lease, superficies, or usufruct arrangement. This practice is legal under Thai law as long as the Thai national retains full ownership rights over the land, including the freedom to encumber, trade, and transfer it. If these rights are restricted and controlled by the foreigner, it may be deemed that the Thai national acquired the land on behalf of the foreigner, leading to legal consequences for both parties.

Legal Provisions and Penalties
Sections 96 and 113 of the Thailand Land Code Act outline penalties for acquiring land on behalf of a foreigner. These include fines and imprisonment for both the foreigner and the Thai national involved. Present regulations focus on the source of capital investment and financial credibility of Thai shareholders when forming a Thai company, as well as during land transfers, subject to the discretion of relevant officials.

Legal Issues with Property Holding Companies
Property holding companies face distinct legal challenges under Thai law. Some arrangements involve a foreigner providing funds to a Thai national to purchase land, with the land then leased back to the foreigner under a 30-year lease agreement. However, if there is suspicion that a Thai national is purchasing land on behalf of a foreigner, the Land Department Office may investigate and refuse land transfer to the Thai national.

In cases involving nominee structures, land transfer to the Thai national and registration of rights for the benefit of the foreigner are typically not simultaneous. Section 74 of the Thailand Land Code Act allows authorities to intervene if there is suspicion of evasion of the law or if land purchase is believed to be on behalf of a foreigner, with final decisions resting with the Minister.

7. Usufruct Rights on Real Estate Properties in Thailand

A usufruct contract allows for the lawful use or occupation of another person's real property for a period of up to thirty (30) years. However, if the individual passes away before the 30-year term concludes, the contract terminates. It is common for a usufruct to be granted to a family member, such as a foreign spouse, to ensure their rights over the property in the event of the Thai spouse or owner's demise.

Rights and Obligations
The usufruct conveys possession, use, and enjoyment of the property from the owner to the usufructuary. This right can only be registered over appropriately titled immovable property through an agreement with the owner and registration at the local land office. The formal agreement or memorandum outlines the terms between the owner and the usufructuary.

Usufructuary Responsibilities
The usufructuary must not sell the property, as the usufruct right remains with the registered owner. They are obliged to maintain and care for the property adequately. Failure to do so may allow the owner to terminate the usufruct. Additionally, the usufructuary is responsible for any loss or damage to the property unless proven otherwise. In some cases, establishing a usufruct can be a beneficial strategy to safeguard a foreign spouse during their marriage in Thailand and upon the death of their Thai spouse.

Legal Provisions and Limitations
Usufruct rights in Thailand are governed by Sections 1417 to 1428 of the Thailand Civil and Commercial Code. The Code outlines various provisions concerning the rights and obligations of usufructuaries, including security requirements, insurance obligations, and limitations on transferability.

Limitations and Term
Usufruct rights are non-transferable and non-inheritable. The usufructuary does not acquire ownership of the property and cannot sell or consume it. The term of usufruct can last up to thirty (30) years or for the life of the usufructuary. If the usufructuary passes away before the end of the term, the usufruct automatically terminates, and the property reverts to the owner.

Leasing Property under Usufruct
Usufructuaries are generally allowed to lease out the property without the owner's consent, unless otherwise specified in the contract. However, any valid lease agreements established during the usufruct period do not automatically terminate with the end of the usufruct.

Foreign Nationals as Usufructuaries
Foreign nationals may encounter restrictions when acting as usufructuaries in Thailand. Land offices typically do not permit the registration of lease contracts under the Thailand Land Code Act. Foreign usufructuaries may only lease out the property for periods not exceeding three (3) years at a time.

Registration Process
Usufruct agreements, whether with or without consideration, must be registered at the local land office. Registration fees and stamp duty apply, with costs varying depending on the circumstances of the usufruct agreement.

8. Superficies Rights in Thailand

In Thailand, a superficies is a transferable and alienable interest in land that allows individuals to possess or construct buildings on another person's land for a specified period. This legal right, granted by Thai law, is available to both nationals and foreigners and is often utilized when the builder of a structure is not the landowner.

Separation of Building and Land Ownership
The right of superficies, as per Thai law, legally separates ownership of buildings from ownership of the land itself. This means that the individual granted superficies rights has ownership over the constructed building but not the underlying land.

Comparison with Other Countries
The concept of superficies in Thailand is based on similar legal principles found in European Civil Law countries. Referred to as "Droit de Superficie" in France, "Erbbaurecht" in Germany, and "Recht van Opstal" in the Netherlands, these nations share the same approach to granting superficies rights.

Definition of Superficiarius
The superficiarius is the individual granted superficies rights. They have the authority to utilize the land and possess any structures built upon it, even without owning the land itself. However, the right of superficies terminates upon the death of the superficiarius.

Creation of Superficies Rights
According to the Thailand Civil and Commercial Code, superficies rights are established when a person constructs a building on land they do not own. The agreement creating this right must be in writing, outlining the terms and conditions, and registered with the Land Department Office. Registration involves submitting relevant documents such as land title deeds, house registration books, and identification cards. Superficies rights come into effect upon payment of the required transfer tax.

Types of Superficies Rights
Superficies rights can be established for a specified period, the lifetime of the landowner, or the lifetime of the superficiarius. Rights registered for a specific term are conveyable and inheritable interests in land.

Laws Governing Superficies in Thailand
Sections 1410 to 1416 of the Thailand Civil and Commercial Code govern superficies rights. These provisions cover various aspects such as acquisition through inheritance, termination, failure of the superficiary, and extinguishment of superficies rights.

Registration Process
To register superficies rights in Thailand, the agreement must be entered in the Land Department's land registers and noted on the owner's land title deed copy. Registration fees, including stamp duty, are typically 1.1% of the total consideration paid. Registration can occur before or during building construction, but existing buildings require a transfer of ownership and payment of transfer tax before superficies rights can be registered.

9.Real Estate Acquisition in Foreign-Controlled Thai Company

According to Thai law, utilizing a foreign-controlled Thai company to acquire land in the country is prohibited and carries legal consequences. However, the law permits land ownership by a legitimate partially foreign-owned Thai company, provided that the foreign ownership does not exceed 49% in terms of shareholders and shares.

Furthermore, in the context of acquiring real estate in a foreign-controlled Thai company, it is impermissible for foreigners to utilize nominee Thai shareholders to establish a majority Thai-owned company for land ownership purposes. Therefore, employing this setup to circumvent the Thailand Land Code Act or Foreign Business Act (FBA) is unlawful, and any foreigner establishing a company using nominee shareholders is in violation of foreign ownership regulations, resulting in illegal ownership.

Fundamentals of Thai Real Estate Laws
Thai laws restrict foreigners from owning land in Thailand, and in most cases, these laws limit foreign property ownership in the country. Additionally, purchasing real estate property in Thailand follows a different legal process compared to buying property in countries offering absolute property ownership for foreigners. Real estate laws in Thailand stipulate that foreigners cannot own land, but sales structures aimed at foreigners are often intricate and bewildering. Real estate in Thailand can legally encompass:

Apartments registered under the Condominium Act of Thailand
Apartments not registered under the Condominium Act
Land
House
Land and House

Laws Influencing Thai and Foreign-Controlled Companies
Under the Thailand Land Code Act, a company is considered "foreign" or "alien" if more than forty-nine percent (49%) of its capital is owned by foreigners or if more than half of the company shares are foreign-owned. Moreover, according to the Foreign Business Act (FBA), a company is classified as foreign if half or more of its shares are held by foreigners. However, a company can still be deemed Thai-controlled under the FBA even if only one (1) Thai shareholder owns the majority or more than fifty percent (50%) of the shares.

Recent Property Law Regulations by Ministry of Interior and Local Land Bureau
The Ministry of Interior of Thailand has reported instances of foreigners collaborating with Thais or commissioning Thais to establish corporations for property dealings, which violates the law. Consequently, the Land Bureau and the Ministry of Interior jointly introduced new guidelines, effective May 25, 2006, for legal entities with foreign ownership. These guidelines require all partially foreign-owned companies to disclose the source of their capital before being permitted to purchase land or property.

Furthermore, these guidelines mandate investigations into the income of every Thai shareholder in a legal entity suspected of having foreigners as shareholders or directors. This is done to verify their employment history and monthly salary, supported by evidence. Consequently, the government is now cracking down on the illegal use of Thai companies and nominee shareholding structures by foreigners, implementing stricter regulations and procedures to ensure compliance with the law.

Currently, the practice of using holding companies for property purchases by foreigners has diminished significantly due to tightened regulations. A Thai company established solely as a front for foreign property ownership violates Thai laws and constitutes illegal foreign ownership. Additionally, when a foreigner opts to own property through a Thai company in Thailand, their presence may not be visible on the company formation documents. After the property is transferred to the wholly Thai-owned company, up to forty-nine percent (49%) of the preferred shares may be transferred to the foreigner. A company that owns real property must be an active business entity, filing annual balance sheets and maintaining proper accounting records, and may not function as a dormant property holding company.

10. Land Title Deeds in Thailand

In Thai law, a land title deed serves as the legal documentation of a person's rightful ownership or possession of real property. It is a formal document, signed, sealed, and delivered to facilitate the transfer of property.

Types of Land Documents
The Land Department and other government bodies in Thailand issue six primary types of land title documents for individual use. These documents pertain to temporary occupation, use and occupation, confirmed right of possession, or notification of land possession. These documents include:

1. Sor Kor Nung (1)

A notice of land possession primarily used for farming, allowing the holder to dwell on and use the land. It may be transferred by inheritance and can be subject to rights such as sale, lease, or mortgage.

2. Nor Sor Song (2)

A temporary occupation document issued by the land department, granting the right to occupy and use the land for a limited period. It cannot be sold or transferred except by inheritance.

3. Nor Sor Saam (3)

Demonstrates a person's right to a specific plot of land, although precise boundaries may not be marked. Legal rights include possession, use, and the ability to apply for building permits or register property rights.

4. Nor Sor Saam (3) Gor

Similar to Nor Sor Saam (3) but with defined land borders, enabling legal acts without publicizing them and allowing for land subdivision.

5. Nor Sor Saam (3) Khor

Issued for areas lacking defined parcel points, similar to Nor Sor Saam (3) Gor but without surveying limitations. It permits land use without publicizing legal acts and allows subdivision.

6. Nor Sor Si (4) Jor (Chanote)

The only true ownership title deed, indicating full ownership rights over the land. It includes precise surveys, GPS plotting, and numbered marker posts. Chanote titles are prevalent in developed areas and permit various legal acts without public notice.

7. Nor Sor Ha (5)

Establishes the holder's rights over the land, which may be sold or transferred with or without a utilization certificate, depending on confirmation of land use by the district officer.

Importance of Land Title Deeds in Real Estate
Land title deeds are crucial for real estate investments, as they confirm ownership, survey status, and property rights. The Chanote (Nor Sor Si (4) Jor) and Nor Sor Saam (3) Gor titles are preferable for investment due to their accurate surveys and fewer limitations. Properly issued title deeds ensure legal security and protect against ownership disputes.

Contents of Land Title Deeds
Title deeds include essential information such as the owner's name, residence, land location, area, and boundary map. They are signed by land officials and the Province Governor, with copies provided to both the owner and the Province Land Office or its branch for record-keeping.