Purchasing your House 100% Freehold

Background

Ownership of land in Thailand is governed by the Land Code BE 2497 (1954), the Civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior.

Under the strict application of the existing law, it is officially prohibited for foreigners, including both individuals and juristic entities (e.g., companies or partnerships), to own land in Thailand . However, there are exceptions to the prohibition found in the law itself as well as other methods.

Sec. 19 of the amended Condominium Act of 1990 allows qualified foreigners to own individual condominium units as long as the total area of foreign-owned units within the entire condominium complex is less than 50 percent of the total area of all units. This restriction does not apply within Bangkok and other municipalities designated in ministerial regulations.

A foreigner or juristic entity can own a condominium in Thailand if the individual has permanent residence status in Thailand, the individual has been permitted to enter Thailand under BOI privileges, the juristic entity is registered in Thailand but classified as "foreign" under the Land Act, the juristic entity has been granted investment privileges by the BOI, or the individual or juristic entity has brought foreign currency into Thailand for the purpose of purchasing a condominium unit.

Manor Park, is one such housing project where we have a Condominium license. There are a total of 79 individual houses and condominium units of which 49% can be owned legally under Thai Law in the name of a foreigner.

These are sold on a first cum first serve basis and the first 39 houses or condominium units can be owned by foreigners. After these are sold, additional units can be sold but will come under another law which is explained below.

Purchasing your House through a Thai Company

Under current Thai Law, foreigners are not allowed to buy land in their names. Therefore, foreign buyers can purchase land in the name of a Thai or a Thai entity ( company ). However, a foreign national may own buildings or property developed on land leased by him or his company. Therefore, you can own your own house.

According to section 97 of the Thai Land Law, the definition of a foreigner includes a Thai registered company or partnership in which more than 49% of the capital is owned by foreigners or of which more than half the shareholders or partners are foreign citizens.

One method foreigners can employ to acquire land or property is by forming joint venture companies with majority Thai ownership but with adequate safeguards to protect the foreigners' minority interest. If a foreigner plans to run a business in Thailand then he may purchase the freehold of the land through his Thai majority limited company. The land will be owned by the Thai Company, not by the individual.

Purchasing property with a limited liability company is the most popular method for foreign investors as the Articles of Association can be varied to allow greater protection for foreign minority shareholders. The regulations vary throughout Thailand , but the Land Office generally requires that Thai nationals own a majority interest in a company if they wish to purchase land legally.

Establishing a Thai Company is relatively straightforward, inexpensive to operate and can be handled by many reputable legal or accounting firms based in Hua Hin and Bangkok .

Manor Park is happy to recommend some firms to you in establishing your Thai Company.

Fees for setting up a Thai Company ( subject to final quote )

Initial cost :

Cost of a company LTD ( Baht. 1,000,000.00 capital ) Baht. 15,000.00

Capital of your company can be increased subject to your company requirements and cost will be increased by approximately Baht.15,00.00 for each 1 million Baht capital increase.

Annual Fees :

Provision for a company registered office address and yearly account keeping and Auditor : Baht. 15,000.00

Advantages

Allows foreigner buyers to purchase a land and build a house.

Since the foreign national will be the sole Director of the company, and has control over the 100% shares, it is safe to purchase a land and build a house in Thailand .

This information has been prepared as a guideline only and whilst every effort has been made to provide accurate information, neither the Developer nor the Management accepts responsibility for the accuracy of this information.