LAND OWNERSHIP BY FOREIGNERS ?

Published: 25th February 2009Author: David Tan

In general foreigners (non-Thais) have no legal rights to land ownership in Thailand, except for a few rare exceptions.

This means that the possibility of land ownership by a foreigner desiring to reside or to reside and to do business in Thailand is, in most cases, none. Consequently, this gives rise to the need to 'work around the rules' or to look for alternative ways to own land in Thailand. Well, there are various structured ways being used:

(1) A foreigner leased a plot of land from a Thai person or company for 30 years (The longest lease period under the law), the lease of land contract signed by the lessor and lessee is registered at the Land Office.

Also, it is stated in the lease of land contract that 'upon the completion of the 30 years lease term, the lessor agrees to renew the lease period for another 2 x 30 years lease period'. This allows a foreigner to possess (not own) the land and to use the land for 30 years, plus maybe another 2 x 30 years lease terms. (Note: If the land is sold to a new owner, this new owner is not obligated to renew the lease period for another 30 years lease period. The lease period renewal is a promise made only by the lessor);

(2) A Thai person, possibly a Thai girlfriend, wife or trustworthy friend, owns the plot of land and the foreigner owns the house or building situated thereon. (Thai law does not restrict a foreigner having ownership of a house or building);

(3) A foreigner buy share(s) of a company limited that already owns the desired plot of land. To have ownership title of the land, the company limited must have a majority of its shares or capital held by Thais or Thai companies; or

(4) A foreigner incorporates a company limited with the majority of its shares or capital owned by Thais or Thai companies. After incorporation, this company limited buys and own the plot of land. To have ownership control over the company limited, the Thai shareholders are either: nominee shareholders of the foreigner (illegal) or having their shareholders' voting rights reduced (May become illegal given current proposed changes to the law)

Tip

A wise reader will see that, unless he or she wants to risk a relationship with a Thai person going very sour and losing the land and house or getting involved with a company limited structure with hidden illegality or potential illegality, the worry free way will be to lease the desired plot of land for only 30 years from a Thai person or Thai company who has ownership title of the land.

Calm your mind and relax your heart, lease a nice plot of land from a Thai land owner for 30 years, register this long term lease at the Land Office and pay the rent up to 30 years only. At the end of 30 years, negotiate with whoever is the owner then to renew the lease. Otherwise, buy and own for yourself a beautiful condominium unit(s) overlooking the sea, beach and the sunset.

 

Written by David Tan. David is a Lecturer of Business Law at Asian University and author of the book "A Primer of Thai Business Law", available online at www.chulabook.com. In Bangkok the book is available at all Kinokuniya and Asiabooks bookstores. Any questions or comments to David should be sent to blas.inter at yahoo.com

 

David Tan Articles:

Does 90-year Lease Exist? - David Tan is a Lecturer of Business Law at Asian University. He has kindly provided us with a series of legal articles looking at property and employment law in Thailand. We start by clearing up the 90-year lease issue.

Foreign Ownership of Land? - David Tan continues his series of legal rights articles with an enlightening look at the thorny issue of foreigners owning land in Thailand.

Buying a Condo in Thailand - How to proceed with due diligence when buying a condo in Thailand.

Escrow Agents in Thailand - How to use escrow agents in Thailand when purchasing a property.

Property Purchase Deposits - If you pay a deposit or reservation fee to a property developer, does that mean you have a sale contract?

Lifetime Land Lease? - Is it possible for a foreigner to lease a plot of land for their own lifetime?

Employee Failing Probation - David Tan's series of legal articles move on to employment law. He starts with a look at the requirements for terminating employees who are on a probationary period.

Fixed Employment Contracts - Fixed period employment contracts are a technique employers can use to avoid having to pay severance and provide prior notice of employment termination to employees.

Sacking an Employee - What are the legal implications for an employer to sack an employee in Thailand?

Selecting Outsource Company - If you outsource in Thailand, what rights do the outsource company's employees have from your company?

Contract Protection for Buyers of Condos - How can you be sure your new condo will turn out like the pictures in the glossy brochure?

 




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