Lawful Ownership of Land by Foreigners

Date: Mar 2013

by Teerakarn Noichiaum, Bangkok International Associates

In general foreign individuals or corporate entities, cannot lawfully own land in Thailand.

However, there are some exceptions to this rule for foreigners who fulfill all the conditions and requirements to be able to have ownership or possession in or of lands.

Substantial investment: The first exception is under Section 96 Bi of the Land Code (1954) whereby a foreigner may purchase land for residential purposes with a total area of not more than one rai (roughly 400 square metres), provided such person fulfills all the following conditions:

  1. must invest in Thailand not less than THB 40 Million and maintain such investment in Thailand for not less than five years;
  2. such investment must be made in the Thai government bonds, a real estate mutual fund, shares in a company which has been granted BOI promotion, in any business or industry promoted by BOI;
  3. the land must be located in Bangkok, Pattaya, or municipal areas or residential areas under the zoning laws;
  4. the land must be located in Bangkok, Pattaya, or municipal areas or residential areas under the zoning laws;
  5. if he/she breaches any conditions or requirements, the land must be sold within one year;
  6. if the foreigner does not use that land for residential purposes within two years after acquisition, then the Director-General of the Land Department will have power to dispose of the land.

Board of Investment promoted companies: The second exception is for BOI promoted companies and business. A wholly-foreign owned Thai company may own land, if that company is engaged in a business that is promoted specifically by BOI, e.g., hotel business, and also fulfills all the requirements and conditions, e.g., the hotel must have a total of not less than 100 rooms.

Long leases: The third exception is a leasehold right under the Lease of Immoveables for Commerce and Industry Act (the “Lease Act”). A foreigner may normally lease any immovable property under the Civil and Commercial Code, whereby the maximum lease term is 30 years, and can be renewed for a further 30 years. However, a foreigner may lease land having a total area of less than 100 rai under the Lease of Immovable for Commercial and Industrial Act, if all the following conditions and requirements are fulfilled:

  1. the lease must be made in writing and registered by the landlord and lessee;
  2. the land must be located in commercial or industrial zones or an industrial estate;
  3. the investment for commercial operations on the leased land must be not less than THB 20 Million;
  4. if there is industrial operations on the leased land, that industry must be eligible for BOI promotion;
  5. such commercial or industrial operations must be permitted to foreigners under the Foreign Business Act.

Once all the conditions and requirements are fulfilled, then such lease may be for a maximum term of 50 years and can be renewed for another 50 years. Furthermore, such lease may be mortgaged or inherited to the owner’s heir. The lessee may sublet or transfer the leasehold rights to a third party, unless otherwise specified in the lease contract.

A lease under the Lease of Immoveables for Commerce and Industry Act may be executed for land with an area exceeding than 100 rai. For such a lease, then not only all the requirements and conditions mentioned above must be fulfilled, but one of the following conditions must also be fulfilled:

  1. the lease is for a business that increases export value or supports domestic employment;
  2. the lease is for a business that has never been operated in Thailand, or there is a lack of such business;
  3. the lease is for a business that uses hi-tech production or improves technology; or
  4. the total investment for the business under the lease is not less than THB 100 million, excluding rent.

Land in industrial estates: The fourth exception is the right to own land by foreigners under the Section 44 of the Industrial Estate Act for land located in Industrial Estates with a total land area deemed appropriate by the Committee for that person’s business operations. If the business is liquidated, the land including all structures thereon, must be sold to the Industrial Estate within three years after the liquidation.

Foreign ownership of buildings: Note that the rules above apply to foreign ownership of land. In general, foreigners may own buildings separate from the land.

Foreign ownership of condominiums: Under the Condominium Acts, foreigners (whether individuals or companies) have a general right to own up to 49% of the usable space in a condominium development (whether residential or commercial).

Conclusion: There are, actually, some laws allowing foreigners to own or possess land in Thailand, but in some cases, the requirements and conditions may be difficult to be fulfilled.

© Teerakarn Noichiaum, Bangkok International Associates 2013

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