Buying Property in Thailand
Property & Land Ownership Rights
If you are considering buying property in Koh Samui, the first thing you should know is that under Thai law, foreigners are not allowed to own land.
However, foreign nationals do have the right to the ownership of buildings distinct from the land.
Foreign nationals may own:
- A unit in a registered Condominium.
- A building distinct from its land.
- A registered leasehold of up to 30 years for all types of titled land or buildings.
Foreign nationals may not own:
- Freehold land.
- More than 49% of the shares in a Thai company that owns freehold land.
Note: Before purchasing property in Thailand make sure you have a good lawyer.
The two most popular ways for foreigners to purchase land are:
Registered leaseholds are secure and relatively straightforward. Long term leasehold can be structured to be tantamount to freehold ownership. Typically, the land is leased for a period of 30 years, renewable a further two times giving a total of 90 years. Security of the possession of land is assured by the fact that you are the legal owner of the buildings which occupy the land. Therefore, the lessor cannot take possession of the property upon expiration of the lease as the property is separated from the land and will not be a component part under the Civil Law.
Limited Liability Company
If you are not comfortable with the leasehold method, the alternative is to set up a Thai company that you control, and which can legally purchase land. Put simply, as a foreigner you are allowed to own 49% of the shares in a Thai company. The rest of the shares must be held by Thai juristic persons (which your lawyer can arrange), who will sign over control of their shares to you. The land will be owned by the company. However, as managing director of the company, you control the voting of the other shares, and therefore you have control over the ownership of the land.
Note: Recently the Thai government announced that it will begin investigating the source of the money used by the Thai shareholders who own 51% of the shares in the company to determine if they are nominees. The use of nominee Thai shareholders is prohibited under the Foreign Business Act (1999).
Thai Women married to Foreigners
Prior to 1998, any Thai woman who married a foreigner would lose her right to purchase land in Thailand. She could, however, still retain land that she owned prior to marrying the foreigner. However, the recent (1999) Ministerial regulation now allows Thai women married to foreigners the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally solely theirs with no foreign claim to it. This is usually achieved by the foreign spouse signing a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and are beyond his claim.
Perfect Homes Samui strongly suggest to use the services of a respected Thai law firm to assist you to the steps of purchasing property in Thailand.
We can recommend a legal firm upon request.