Frequently asked questions

What are the main types of land titles?


Land Titles What are the main types of land titles? The land title deed is a Chanote (Nor Sor 4 Jor). The Nor Sor 3 Gor and Nor Sor 3, are equivalent to a land title deed for all practical purposes as the land can be sold, leased or mortgaged. However, the boundaries are less accurately surveyed compared to land with a Chanote. There are a number of other land titles though these do not afford the owner many rights to the land under Thai law. (See land titles for more info).




How is land measured in Thailand?


How is land measured in Thailand? Metric units are generally used in the construction and measurement of buildings, but land is usually measured in Wah or Rai. (See land measurement for more info).




Are foreigners allowed to own land?


Are foreigners allowed to own land? According to Thai law, foreigners are prohibited from purchasing freehold land and not more than 49% of the shares in a Thai limited company that owns freehold land under the company's name. However, foreigners may own a building distinct from its land, such as a unit in a condominium or a director in Aura or The Jeeranont. How can foreigners own land in Thailand? The safest and easiest methods for owning land include using a leasehold agreement or setting up a Thai limited liability company. What are the advantages of setting up a Thai company to buy land? Unlike land leasing, the ownership of such land is permanent as long as the company exists. Using this method is also convenient if you were already planning to set up a business in Thailand. This method is also suitable if you wish to purchase land as part of an investment as it is possible to mortgage or subdivide the land for resale, which is not normally possible with a leasehold. What are the disadvantages of setting up a Thai company to buy land? Unless you are an American, as a foreigner you cannot own more than 49% of the shares in the company. This means that you need Thai shareholders who will sign over control of their shares to you. The minimum number of shareholders is 3, so you can have 1 foreigner and 2 Thai shareholders. However, even though you control these shares, proper legal procedures need to be put in place in order to protect your investment. You also need to make sure that the regulatory compliance of the company is maintained. Inactive companies that are not generating income may be de-listed, so you need to make sure that balance sheets are filed annually and that the company's address is maintained.




How can foreigners own land in Thailand?


Purchasing Land Are foreigners allowed to own land? According to Thai law, foreigners are prohibited from purchasing freehold land and not more than 49% of the shares in a Thai limited company that owns freehold land under the company's name. However, foreigners may own a building distinct from its land, such as a unit in a condominium. How can foreigners own land in Thailand? The safest and easiest methods for owning land include using a leasehold agreement or setting up a Thai limited liability company. What are the advantages of setting up a Thai company to buy land? Unlike land leasing, the ownership of such land is permanent as long as the company exists. Using this method is also convenient if you were already planning to set up a business in Thailand. This method is also suitable if you wish to purchase land as part of an investment as it is possible to mortgage or subdivide the land for resale, which is not normally possible with a leasehold. What are the disadvantages of setting up a Thai company to buy land? Unless you are an American, as a foreigner you cannot own more than 49% of the shares in the company. This means that you need Thai shareholders who will sign over control of their shares to you. The minimum number of shareholders is 3, so you can have 1 foreigner and 2 Thai shareholders. However, even though you control these shares, proper legal procedures need to be put in place in order to protect your investment. You also need to make sure that the regulatory compliance of the company is maintained. Inactive companies that are not generating income may be de-listed, so you need to make sure that balance sheets are filed annually and that the company's address is maintained.




What are the advantages of setting up a Thai company to buy land?


Unlike land leasing, the ownership of such land is permanent as long as the company exists. Using this method is also convenient if you were already planning to set up a business in Thailand. This method is also suitable if you wish to purchase land as part of an investment as it is possible to mortgage or subdivide the land for resale, which is not normally possible with a leasehold.




What are the disadvantages of setting up a Thai company to buy land?


Unless you are an American, as a foreigner you cannot own more than 49% of the shares in the company. This means that you need Thai shareholders who will sign over control of their shares to you. The minimum number of shareholders is 3, so you can have 1 foreigner and 2 Thai shareholders. However, even though you control these shares, proper legal procedures need to be put in place in order to protect your investment. You also need to make sure that the regulatory compliance of the company is maintained. Inactive companies that are not generating income may be de-listed, so you need to make sure that balance sheets are filed annually and that the company's address is maintained.




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 disadvantages of leasing a property?


Its possible that the land owner may refuse to sign the registration for the lease extension after 30-years. The lessee can sue for breach of contract, but the entailed legal process is costly and time-consuming. Other disadvantages include the difficulty in obtaining a mortgage for the lease, a lower resale value and potential lawsuits from the land owner for lease violations.




Can a foreigner buy land in Thailand in his own name for residential purposes?


Pursuant to the Land Code B.E. 2497 (1954), foreign individuals and foreign owned companies are not allowed to own land; unless an exception to the general rule applies. Most exceptions concern the purchase of land for industrial use through promotion such a BOI. A foreigner will only be allowed to own land freehold for residential purpose in the following case. A Foreigner who has invested over 40 million Baht in Thailand can own up to 1 rai of land for residential purpose if he fulfilled the requirements as follow: to bring at least a forty-million Baht investment into Thailand (not including the amount invested into the purchase of the land) being specified that said 40 million Baht must be used for an investment that benefits Thai economy, promotes social welfare, or is a business promoted by the BOI and he money must be invested in Thailand for a minimum of 3 years. If those conditions are fulfilled then the foreign investor can purchase in freehold up to 1 rai of land (1,600 SQM) in designated area such as in Bangkok and Pattaya, municipal areas of all provinces, and areas designated as residential under the City Planning Act.




How is land measured and how are prices expressed?


In Thailand, Land is measured in Rai, Ngan, and Wah. 1 Rai = 1600 Sqm or 4 Ngan 1 Ngan = 400 Sqm or 100 Square Wah 1 Square Wah = 4 Sqm The size of houses and/or condominiums is expressed in Useful Area. Useful Area includes all usable areas of a building including the terrace (it is different from living area). Land prices are expressed in Baht per Rai or Baht per Square Wah while condominium prices are in Baht per Sqm.




How are rights on land evidenced?


There are several types of titles or documents that can evidence rights (ownership or possessor rights) on land in Thailand. Only the three Land Titles mentioned below are considered safe to purchase: "Chanote" or "Nor Sor See" = Freehold Title Deed "Nor Sor Sam Gor" = Confirmed Certificate of Land Use "Nor Sor Sam" = Certificate of Land Use "Chanote" or "Nor Sor See": Is a Freehold Title Deed that is based on a geometrical accurate survey of the land made by the Land Department which exact boundaries are marked by concrete plot markers. It contains a description and a map of the land, including the area, boundaries, and marking posts, and a history of all registered transactions concerning the land; grants to its owner full right of ownership on the land. Currently "Chanotes" are available in Bangkok, provincial city, and the most developed areas of provinces. Progressively, "Chanotes" shall be available in all of Thailand. A "Chanote" title is printed on yellow paper of rectangular form and is recognizable by the red Garuda (emblem) on the top center of the title. The "Nor Sor Sam Gor" or Certified Certificate of use A Nor Sor Sam Gor certifies that the person named has the right to use the land; the right of this person has been confirmed by the Authority; all requirements including the geometrical survey by the Land Department for the issuance of a Chanote Title Deed have been met; and the owner is entitled to apply for an upgrade for a Chanote; however, providing that such option is open in the concerned area. The "Nor Sor Sam" or Certificate of Use The differences between a "Nor Sor Sam" and a "Nor Sor Sam Gor" are as follows: the Nor Sor Sam is not delimited by a survey and there are no markers to designate land boundaries. Therefore, any person purchasing a Nor Sor Sam is advised to have a survey of the land made by an official land surveyor prior to the purchase. The difference between the size of the land as indicated in the Nor Sor Sam and actual size can be more than 10-20%. Note also that a one-month delay is needed for publication purpose for any formalities such as the transfer or the registration of rights or charges of any sorts on a Nor Sor Sam title. Issues common to "Chanote", "Nor Sor Sam Gor" and "Nor Sor Sam" They are all issued in several original duplicates; one for the Land Department and one for the owner of the Land. Mortgages, Long Term Leases, Right of Superficies, and Charges can be registered on any of them. All the subsequent changes to a title deed such as transfers, mortgages, servitudes, charges and so on are registered on the back page of the Land Title to one exception; buildings. Buildings do not appear on Land Titles as Land Titles only serve to evidence rights on a land to the exclusion of the buildings built on the Land. They are no specific titles to represent the ownership of a building. When transferring a land on which a building is located, mention of the transfer of the ownership of the building will be made on the sale and purchase agreement attached to the "Chanote" or "Nor Sor Sam Gor" or "Nor Sor Sam".




What rights may a foreigner safely acquire on Land?


Thai Laws do allow foreigners to acquire several kinds of right on land such as lease rights, right of superficies, right of usufruct, and mortgage. Furthermore, foreigners are allowed to own buildings. Therefore, the best option for the foreigner that wishes to purchase a residence in Thailand is either to execute: a long term lease agreement; or a right of superficies because both leasehold and right of superficies may be used to create a separate right of ownership of the land and of the structure built upon the land. In other words a foreign buyer purchasing a residence under leasehold or a right of superficies can be granted the right to own the house or building built upon the land plot on which he/she has been granted an exclusive right of use and possession of the land on which said building is built.




May a foreign citizen own a building?


Thai laws do not restrict foreigners to own the building owned upon the land. As a consequence, foreigners that lease or register a right of superficies on raw land, may apply for a construction permit under their own name (if they have an address in Thailand) and may legally any building, houses or structure built on a land. Once the construction of the building or the house is completed they might also apply and obtain a House Registration Certificate (TABIEN BAN) under their own names. “Yellow Book” (Thor.Ror.13). Note that in Thailand there are no specific titles to represent the ownership of a building and that contrary to popular belief the “Tabien Baan” is not a proof of ownership of a building.




What is the best option for a foreigner who wants to purchase a house in Thailand?


Currently the best option for a foreign citizen that which to purchase a house in Thailand is to profit from the fact that Thai Laws allow foreigners to register long-term rights of possession, use or occupancy on a land (lease agreement or right of superficies) and to personally own their house. Purchase under a leasehold or right of superficies is completely legal and without hassle; and it is secure because if the need arise the foreign buyer will have no problem to request the protection of Thai Courts if the need arises; It is more and more available because most of developers targeting foreign buyers offer this kind of option, but look for professional advice to check the arrangements taken by the developer in relation to the renewal of the agreement. For the time being foreign buyers should not consider the option of freehold ownership through the incorporation of a Thai limited company. Not only is this technically illegal; but the limited company is not a convenient tool for the ownership of a land and house for residential purpose. Indeed, Thailand does not have legal vehicles specially tailored for the ownership of real estate assets. Now according to the Revenue Department whoever set up a company do it for the purpose of making profits and as a consequence the Revenue Department expects that at some point in time any companies must make profits. In other words, at some point of time a landowner company even if its only activity is to own a house and land for residential purpose will have to pay corporate taxes in addition to property taxes. Furthermore, a limited company needs to be maintained to generate lawyer, accountant, and auditor expenses. Therefore, a foreigner that only wants to buy a property for residential purpose should choose the leasehold or right of superficies option.




How does a foreigner form a Thai company?


The process to form a private limited company include: the registration of the company name the registration of a Memorandum of Association (Articles of Incorporation) and the registration of business objectives the registration of Articles of Association (By-laws) the registration of an Affidavit. Then within 60 days of its incorporation the company must apply for a corporate tax id and once the company has a turnover of more than 1,800,000 THB per year for the VAT.




Can a foreigner own a 100 % freehold condominium in Thailand?


One of the easiest ways for a foreign citizen to own a real estate asset in Thailand is to take advantage of the fact that Thai laws allow foreigners to own condominium freehold. A condominium is defined as “a building that can have its separate portions sold to individuals or groups for personal property ownership” The area of a condominium building is divided in two distinct areas, the private area that is to say flat units that are represented by condominium units titles deeds which can be privately own and the common area that is to say the facilities, utilities, and the land on which the condominium is built. The Common Area shall become the property of the Juristic Condominium person. Each owner of a condominium unit shall receive a percentage of ownership in the juristic person according to the size of his/her condominium unit. This is because the juristic person also owns the land on which the condominium building is erected the ratio of foreign ownership is limited to 49% of the total private area in a condominium building at any one time. Therefore, prior to selecting a condominium, a foreign buyer shall first check with the Juristic Person what the current foreign ownership ratio is in said condominium. Generally in Bangkok, this rule does not pose any problems. In beach resorts, there are often more foreign buyers than there are units available for foreign buyers. To be eligible to purchase a condominium, a foreign buyer must be able to enter Thailand legally and present proof to the Land Department that the funds used for the purchase of the condominium have been remitted from overseas in foreign currency. Without such proof, the Land Department will not permit the transfer of ownership to the foreign buyer. The foreign currency must be brought and be exchanged in Thailand. Purchase of Thai Baht on the International market would not qualify in this regard. The money must either come from a bank account in the name of the foreign buyer; or be transferred to a bank account on the name of the foreign buyer. The name of the buyer must appear at one end of the transaction or the other. The minimum of foreign currency to be brought by a foreigner to be eligible to condominium freehold ownership must be at least equivalent to the purchasing price of the condominium. For proof purpose, it is better to make transfer of a minimum of US$ 10,000 per transfer. A foreign investor purchasing a condominium through the use of a 100% foreign own company should be aware of one drawback. While under the Condominium Law, a foreign company can legally own one or several condominium units but under the Foreign Business Act renting said condominium units is considered a service business under the Foreign Business Act. Therefore, prior to start renting out the condominium units, the foreign company should apply for a Foreign Business License. Now, the catch is that the Business Department seems not to be willing to grant foreign business licenses for the leasing of property because this activity does not bring a technological transfer. The paradox is that a foreign company could legally purchase several condominium units in freehold but then could face the risk of breaching the act when renting out the said properties.




May a Thai wife of a foreign national own a land?


As an effect of the enactment of the Constitution of 1999, a Ministerial regulation has been enacted that allows Thai women married to foreigners to have the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally and solely hers. For this purpose the foreign spouse must sign a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and that he has no claim to it. In fine this means that if the money used for the purchase of the land was the Thai Spouse money before the wedding then the land purchased with this money is not common property of the spouses but exclusive property of the Thai spouse and the foreign spouse shall have no right on the land in case of divorce or death of the Thai Spouse. However, the foreign spouse could have other rights such as registered leasehold on the land.




May a Thai minor child of a foreign national own land?


A Thai minor born from a foreign parent can acquire land providing that the land acquisition is not done for the purpose to circumvent or evade the law. If a person wishes to give a piece of land to a Thai foreign-born minor as a gift then the authority shall inquire into his/her intention to give the gift to the minor and into his/her legal relations with the minor. If the property to be given as a gift is acquired by purchasing, it must be determined out of whose money the acquisition is made. To transfer a land to a minor child has several drawbacks. The main drawback is that the power of the child parents to use the land will be severely restricted. Pursuant to Section 1574 of the TCCC, a person exercising parental power: “Cannot enter into any of the following juristic acts with regard to the immovable property of the minor, except with the permission of the Court.” Acts that cannot be done without the Court permission are: selling, exchanging, selling with right of redemption, letting out property on hire purchase, mortgaging, releasing mortgage to mortgagor or transferring the right of mortgage on immovable property or on mortgage able movable property. Extinguishing the whole or a part of real rights of the minor on immovable property. Creating servitude, right of inhabitation, right of superficies, usufruct or any charges on immovable property; disposing of the whole or a part of the claim the purpose of which is to create real rights on immovable property or on mortgage able property, or the claim of which the purpose is to have a real right on such property of the minor relieved; and letting immovable property for more than 3 years.




How many shareholders are required under Thai Law?


You need a minimum of seven shareholders to set up a company in Thailand. The number of seven shareholders must be maintained for the duration of the company. A company that exercise a business activity which is not prohibited to foreigners or which is not restricted do not need to have Thai shareholder. Most manufacturing activities can be 100% foreign owned. A company which receives a foreign business license to exercise a business activity listed under List 3 of the Foreign Business Act, who received a BOI promotion can be 100% foreign owned as well. A company that received a foreign business license to exercise a business under List 2 of the Foreign Business Act needs between 25 to 40% of Thai Shareholders. A Thai company which exercises an activity restricted or prohibited under the Foreign Business Act and do not have a BOI or a Foreign Business License needs 1 Thai shareholder holding 51% of the paid up capital. A company that own land needs to have 51% of Thai Shareholders holding together 51% of the shares.




What is the maximum number of shares a foreigner can own in a Thai Limited Company?


When incorporating a Thai Company a foreigner can held up to 49% of the shares. If a foreigner holds only 39% of the shares or less and is not an authorised director at the time of the company incorporation there is no disclosure requirement of the fortune of the Thai Shareholders. If at the time of incorporation the foreigner hold more than 39% or is an authorised director then the Thai Shareholders have to disclose their financial information such as bank statements, source and income and so on. The requirement is applicable at the time of incorporation.





The Jeeranont

Issued by The Jeeranont Company Limited is authorised and regulated in the USA by the Financial Conduct Authority. UNITED STATES OF AMERICA