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Land Purchase FAQs:

Can a foreigner buy land or purchase property in Thailand?

Thai law, in general, prohibits non-Thai citizens from buying land or purchasing property in Thailand. However, there are various exceptions to the law, as well as methods for foreigners who want to buy land or purchase property to acquire rights to land and property in Thailand legally.

What are the options available for buying land or property in Thailand?

For a foreigner wishing to buy land or purchase property in Thailand, there are mainly four options worth exploring. These include using investment, leasing, owning a company and marrying a Thai spouse.

Investing/BOI: With significant investment of funds, foreigners may be allowed to own a limited amount of land under Thai property law. Some foreign companies seek and obtain the approval of the Board of Investment (BOI) to purchase land for a limited period. This option, however, is not available to the vast majority of non-Thai nationals seeking to obtain a second home, retirement home or investment in Thailand because of the legal restrictions involved. As a result, other options must be examined.

Leasing: Thai property law allows a foreigner to lease land for a maximum of 30 years, with lease renewal options of 30 years. Many foreigners choose this method to secure land or property ownership. In comparison to setting up a company, land leasing is easier and requires less maintenance. (More information on land leasing in Thailand can be found here)

Owning a company: A foreigner may use a Thailand-registered company to obtain property rights or land interest in Thailand. This “Thai” company must be at least 51% owned by Thai shareholders, while the remaining 49% or less may be held by foreigners. (Some law firms are still using the old law and recommending 39% foreign ownership.)

Marrying a Thai spouse: A recent revision of Thai law has provided the opportunity for a Thai with a foreign spouse to buy land or property in Thailand. Prior to registering the land parcel at the Land Department, the couple may be asked to sign declarations, declaring that the funds for the property came solely from the Thai spouse. This may, in effect, result in the non-Thai spouse waiving his/her rights on the land or property. Such declarations may become problematic in a divorce case as the non-Thai spouse may have difficulties proving that the land was marital property. To prepare for such an event, a skillfully-drafted prenuptial agreement may be useful.

How useful is a limited liability company for a foreigner who wishes to buy land or purchase property?

This is one of the most popular methods employed by foreign investors who want to buy land or purchase property in Thailand. Although Thai law generally requires Thai nationals to own a majority interest in a company in order to legally purchase land or property, various legal documents and procedures can be used to provide greater protection for foreign minority shareholders.

I am an American who owns 100 per cent of a Thailand-registered company under the Amity Treaty. Am I able to use this Amity Treaty company to buy land or purchase property?

Unfortunately, an Amity Treaty company only allows Americans to transact in certain types of businesses. Under the Treaty, Americans can own a majority share in a Thai company but they are not granted the right to buy or purchase land in Thailand.

How many types of title deeds are available for private land ownership?

There are mainly three types of title deeds for private land ownership in Thailand. The best title deed for land ownership is the Chanot (Nor Sor 4), which must be registered at the Land Department in the province in which the land is located. Although it is possible for a land parcel to be commonly held by several individuals, only the person whose name is indicated on a Chanot has all the legal rights to that land. The deed can act as evidence of ownership, and it can be used to engage in legal acts upon that land as allowed by the law.

The second and third best title deeds are the Nor Sor 3 Gor and the Nor Sor 3. For Nor Sor 3 title deeds, the Land Department does not utilize official markers to designate land boundaries. As a result, these title deeds have less specific land demarcation than the Chanot.

Foreigners who intend to buy land should also be aware of the problematic “possessory right”. This land-ownership right is not substantiated by a title at the Land Department but it is shown using tax payments.

Title Deed
Definition
Chanot (Nor Sor 4)
Full title deed
Nor Sor 3 Gor
Second best title deed. Used while awaiting measurement for a Chanot.
Nor Sor 3
Third best title deed. Ownership may be established; Less specific boundary demarcation than a Chanot.
Possessory Right
One of the weakest land rights. Normally an inherited land right proven by tax payments at the local administrative office.

Can you tell me more about land mortgages in Thailand?

An application made in writing, followed by a registration at the Land Department of Thailand are two necessary procedures for land mortgages in Thailand. Buildings built on the land after the mortgage date will be not covered unless they were agreed upon prior to the signing of the mortgage documents. Such buildings and other immovable structures should be mortgaged and registered separately at the Land Department or local Amphur (province).

What are the pros and cons of utilizing company formation to own land in Thailand?

By utilizing company formation, foreigners are able to acquire ownership interest in land in Thailand. This ownership is deemed permanent if the company stays in operation and does not sell or transfer the land. Company formation for the purpose of owning land would be suitable for people considering setting up businesses in Thailand; people with intentions of holding land for investment or for long duration; and as inheritance for future heirs. One other advantage of this type of ownership is the possibility of mortgaging and/or subdividing the land for resale purposes. This is a right normally conferred by land leases.

The use of Thai nominees to hold shares in a company owning land in order to circumvent the law is an offense under Thai law. It is therefore recommended to have genuine Thai partners in any company owning land in Thailand.

Another issue to be aware of is the need to maintain regulatory compliance of the company. The law requires a Thailand-registered company to file annual balance sheets and to maintain a company address. Moreover, companies that are not operating may be de-listed. It would, therefore, be wise to use an active company to purchase land or buy property in Thailand.

If I hire a Thai national to buy land or purchase property on my behalf, can this person execute an agreement stating that the land belongs to me?

In principle, it is illegal for a Thai national to buy land or purchase property on behalf of a foreigner. Therefore, the agreement may be considered illegal and void. However, at least one Supreme Court decision allows for the non-Thai using a Thai representative to recover his investment in the land.

When buying land outside of Bangkok, is it best to hire a local law firm from the province or a Bangkok based law firm?

There are many qualified law firms in provinces outside of Bangkok. However the majority of law firms with attorneys fluent in English are based in Bangkok, and to a lesser degree in the other major urban areas. Also, Thai law as it applies to foreigners is a specialty area. While local firms that deal primarily with Thai clientele may be excellent lawyers in their fields of expertise, they may have little experience with regard to the special issues involving non-Thais in Thailand.

Before you hire a local law firm, do check that there is no pre-existing working relationship between the seller/Land Department officials and the local law firm. This is to prevent any biased assessments during the process of buying land.

Foreigners are able to find many qualified law firms in Bangkok. Bangkok-based law firms are able to commute to the provinces to execute the land transaction. Many foreigners feel more comfortable with this approach as these law firms operate independently and in full interests of the client (buyer).

Thanks: http://www.chaninatandleeds.com/guide/landpurchase.html

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