Structures of ownership and property titles in Thailand

The concept of leasehold and freehold ownership are fairly universally. Simply put, a leasehold property means you are buying the property for a set number of years and eventually you must return it when the time runs out. Freehold means you will own that property forever hence it is the more appealing tenure. Both types of property ownership exist in Thailand.

In some parts of Bangkok, such as around the exclusive Lumphini area, properties can only be bought on a leasehold basis. This is because the land is owned by the Thai Monarchy. Several areas in Phuket also have property available via leasehold ownership.

The length of a lease will vary from property to property in Thailand. Most leases are for 30 years with options to renew the agreement further. The terms will be clearly stated in the contract and commonly there are options giving the owner a potential 90 years of ownership.  

When investing in a leasehold property it is advised to carry out your due diligence. Buy from a well-known and reputable brand or developer. In places like Phuket, it is advisable to buy a leasehold property where there is a guaranteed buy back in place. This will eliminate some of the risk associated with leasehold properties.

Freehold properties, include condominiums where ownership is defined by the Condominium Act, are a far safer investment, especially for foreign buyers. These provide peace of mind and make it easier to resale the property. The only regulation in place is the quota each condo building has the amount of foreigners who own units. The Condominium Act states only 49% of the units in any one building can be owned by non-Thais.

Company ownership structures in Thailand

Under the Foreign Business Act, foreigners require a foreign business license to operate a company within Thailand. The requirements for this business license are very complex making it hard, or near impossible, to obtain. Therefore, many foreigners instead opt to obtain a work permit through a Thai limited private company instead.

A foreigner cannot own a whole company in Thailand, but can own up to 49% provided that the remainder is Thai owned. This weighting deems the company to be operated by a Thai entity rather than a foreigner and is not subject to the Foreign Business Act making the company’s operation entirely legal. Foreigners, as a minority shareholder, are then permitted to hold the position of managing director.

Finally, it needs to be proved that the source of the funds used to set up the company are not purely from the foreigner. Thai shareholders need to demonstrate how they have financed their share through bank statements and other supporting documents.

Structures of owenrship