Owning a House and Land in Thailand
Foreigners cannot buy land in Thailand directly but can buy condominium units and apartments in their own name. However, foreigners cannot own more than 40% of the condominium’s units. A foreigner can, however, buy a whole building but not the land on which it is built.
Foreigners can have a 30-year renewable lease which is registered at the Land Office. These leases can have an option to renew indefinitely for further 30-year periods. Unfortunately, lease renewals cannot be registered, and are only binding on the original lessor so if the land is sold or the original lessor dies, the lease is not effective against any subsequent owner. Further, the lease cannot be subleased or transferred without without the lessor’s consent. These restrictions make leasing an unviable option unless the lessor’s is a very reputable company or person.
Another option is to set up a limited liability company with mixed Thai and foreign ownership with foreigners not owning more than 49% of the company. Companies are allowed to own land and houses and the foreign national can control the company by using a legal power of attorney from the Thai shareholders, appointing foreign directors, or through assigning greater voting rights to the foreigner partner(s). This is the most effective and time-tested route and is used by most foreigners seeking to invest in land and property in Thailand.
We recommend the use of a good lawyer when purchasing any land or property in Thailand so your investment is 100% protected.
Forming a Thai Private Limited Company:
- Corporate Name Reservation: You must choose a company name that has not been registered by a previous company.
- Pick Shareholders: 4 shareholders are required with Thai nationals owning 51% or more.
- Register the Company: The company must be registered by filing an application signed by the authorized directors. The application should be accompanied by the Statutory Meeting and approved Articles of Association. The certification document will be issued a day after the necessary payments have been settled.
- Tax Registration: A tax identification card and number must be obtained from the Revenue Department. Companies earning more than THB 600,000 per year should also register for VAT.
- Yearly Reporting: Companies must file taxes yearly, which can be performed by any good accountant. This generally costs around 10,000 to 15,000 THB. Taxes are generally very low or nonexistent as the company does not need to register any profits if it is only a holding company.
- Closing Costs: Often, when the land/house is sold, it is done simply by transferring ownership of the shares to the buyer. However, if the company is no longer needed at some point, the company should be properly closed. This generally costs around 15,000 to 20,000 THB.
Bringing Money into Thailand:
Any money brought into Thailand should be remitted in a foreign currency and converted into Baht in Thailand. The transfer should also clearly label the purpose of the money such as,“For Purchase of a Condominium” and documented using an Exchange Control Form (Thor Tor 3). The name on the Exchange Control Form should be the same as the buyer’s, to avoid delays and further inconvenience.