Thailand Land Ownership for Foreigners

Under Thai law, foreign nationals are generally prohibited from owning freehold land. However, there are legal strategies available to foreigners that allow them to control and invest in property. Foreigners can own up to 49% of a Thai limited company that holds freehold land in its name, though the land itself remains under the company’s ownership. While foreigners cannot directly own the land, they are allowed to own buildings, such as condominium units, independent of the land they are built on.

Ways Foreigners Can Secure Land in Thailand

For foreigners looking for a secure and straightforward way to invest in land, two common options are available:

1. Leasehold Agreement: This allows foreigners to lease land for up to 30 years, with an option to renew.
2. Setting up a Thai Limited Company: This involves forming a company where the foreign national holds up to 49% of the shares, while the remaining shares are owned by Thai nationals.

Types of Land Title Deeds in Thailand

Land title deeds in Thailand are categorized into three main types, each granting varying levels of ownership rights:

1. Chanote (Nor Sor 4 Jor): This is the most secure and preferred title deed in Thailand. It provides the landowner with full legal rights over the land, allowing for complete control, including the right to sell, transfer, lease, or mortgage the land. It also guarantees precise land measurements, making it the most reliable for those looking to invest in land ownership. Most condominiums are built on Chanote land due to its legal clarity.
2. Nor Sor 3 Gor: This document is issued while the land is awaiting a full Chanote title. The land has been measured by the Land Department, so the owner knows the exact boundaries of the property. Owners can sell, transfer, or mortgage the land. They can also request an upgrade to a Chanote title, provided there are no disputes. This title offers more rights than the Nor Sor 3 but still lacks the full authority of a Chanote.
3. Nor Sor 3: Issued by district land officers, this title has not been officially measured by the Land Department, so the boundaries are not exact. This can cause complications with neighbors or future transactions. The land can be possessed but cannot be transferred or sold until the property has been publicized for at least 30 days. It can later be upgraded to Nor Sor 3 Gor or even Chanote.

Other titles exist, but they do not provide significant rights under Thai law and are generally not recommended for secure land ownership.

How is land measured in Thailand?

In Thailand, land is measured using traditional units that differ from those commonly used in Europe, the UK, or the US. The main units for measuring land in Thailand are Wah, Talang Wah, and Rai.

• Wah: This is a linear measurement, with 1 Wah equivalent to 2 meters.
• Talang Wah: This is a square measurement, equivalent to 4 square meters.
• Rai: A larger unit for measuring land, with 1 Rai equal to 1,600 square meters or 400 Talang Wah.

For conversions, here’s a quick reference:

• 1 square meter (sqm) = 0.25 Talang Wah
• 1 acre = 2.53 Rai
• 1 hectare = 6.25 Rai

These measurements are widely used in real estate transactions in Thailand, and understanding them is crucial when buying or leasing land.

Advantages of a Freehold Property in Thailand:

The key advantage of purchasing a freehold property is that the buyer has full ownership rights over the property. This means the owner has the freedom to sell, lease, or develop the property as they wish, within the limits of Thai law. Freehold properties are also viewed as more secure because ownership does not expire or need renewal, unlike leaseholds. Although the process of acquiring a freehold property can be slightly slower and potentially more expensive, the long-term benefits of having complete control and the right to transfer ownership make it a highly appealing option for foreign buyers, especially when it comes to condominiums, where foreign ownership is permitted up to 49% of the building.

Advantages of Setting Up a Thai Company to Purchase Land:

Setting up a Thai limited company to purchase land is a practical solution for foreigners since Thai law prohibits direct foreign ownership of land. By holding a maximum of 49% of shares in a Thai company, a foreigner can indirectly control the land through the company. The main advantage of this method is the permanent ownership of the land, as long as the company exists. Unlike a leasehold, which has a time limit, this arrangement provides more stability.

Additionally, buying land through a company is advantageous for investment purposes. It allows for mortgaging, subdividing the land, or reselling it, which are often restricted under leasehold agreements. If you are also looking to establish a business in Thailand, this option may streamline both the property acquisition and business setup processes.

In both methods, it’s important to seek legal advice to ensure full compliance with Thai regulations.

Thailand Land Leases

A land lease agreement is a critical legal document in real estate transactions, especially in Thailand, where it provides a means for individuals or entities to use land without acquiring ownership. It is particularly significant in scenarios where foreign investors or developers wish to undertake projects, as Thailand restricts land ownership by non-Thais.

   Do you have to register the land lease at the Land Department?

Leases up to 3 years don’t need to be registered. Leases that are 3 years or longer must be registered at the Land Department.

   What is the maximum lease term available?

The maximum lease term is normally 30 years with an option for an extension of 30 years and a further 30 years after that. Each lease renewal must be registered at the local land office. Land for industrial purposes may be leased for up to 50 years by a foreign company under certain circumstances with a possible lease extension of a further 50 years.

   What are the advantages of leasing a property?

This is the quickest, cheapest option for purchasing property in Thailand, with the least potential for confusion. This option also requires less responsibility.

   What are the disadvantages of leasing a property?

Leasing a property has less control than a freehold title, as the building is not owned forever. Even as a 30 year lease can generally be renewed 2 times consecutively times making it a total of 90 years, there is still a possibility that a lease may not be renewed, due to changes in circumstances or the law.
The possibility of the land owner may refuse to sign the registration for the lease extension after 30-years. The lessee can sue for breach of contract leading to legal process which is expensive and time-consuming. It also entails the difficulty in obtaining a mortgage for the lease, a lower resale value and potential lawsuits from the land owner for lease violations.

Purchasing Condominiums in Thailand: Key Points

• Definition of a Condominium. Under Thai law, a condominium refers to a building divided into separate units that can be individually owned. These units are sold for personal ownership, with the building’s common areas jointly owned by all unit owners.
• Requirements for Foreigners to Purchase a Condominium. Foreigners or foreign entities can purchase a condominium, provided they bring foreign currency into Thailand to finance the purchase. This is typically done through a Foreign Exchange Transaction Form, which must be submitted to the Land Department during the transfer of ownership. This form confirms that the funds for the purchase came from abroad, ensuring compliance with Thai regulations on foreign ownership.
• Restrictions on Foreign Ownership. Foreign nationals are limited to owning no more than 49% of the total area of all units in a registered condominium building. This ensures that the majority of condominium ownership in any given building remains with Thai nationals.
• Condominium Lease Terms. In addition to purchasing, foreigners can lease condominiums for up to 30 years. Leases longer than 3 years must be registered with the Land Department to be legally recognized.