Legislation for real estate is quite strict in Thailand. In order to protect the interests of Thai citizens, the sale of land to foreigners is prohibited. However there are several ways to register property, allowing foreigners to own the property. One of them is the Foreign freehold ownership. Freehold gives the owner the right to sell or rent property, to transfer by inheritance or by donation and this can be done at the owner’s discretion.
In complexes that have a condominium license, a foreigner can purchase apartments under full ownership as 49% of the total number of apartments have a foreign freehold quota. This means that by Thai law these can be sold to foreigners under a freehold ownership structure. This form of ownership allows the owner to dispose of the apartment at will: rent, sell or even upgrade, if the complex regulations allow it.
The second option through which property can be registered by a foreign citizen is via the registration of the land via a freehold Thai company. The formation of a Thai company is quite simple, given the availability of a competent lawyer. The law allows a foreigner to own a 49% stake in the company allowing owners to manage a property without restrictions. However, as a rule, 51% belongs to nominal persons of Thai nationality. The company’s charter prescribes that the director and sole disposer of the bank account is a foreign citizen. The director also receives the right to the sole disposal of the company’s real estate. At the same time, a house or a villa on a company-owned plot of land is registered separately under the foreigner’s full ownership. This scheme gives additional guarantees to a foreign citizen, since the land and the house located on it cannot be separated from each other. The creation and management of the company also carries some tax obligations and additional annual expenses.
To conclude such a transaction, it is necessary to comply with some legal formalities, for example, a mandatory condition for the purchase, is the transfer of funds for purchase from abroad. The contract is used to register the property at the Land Department, which is the sole government institution that registers the transfer of property rights. After that, the new owner receives a Chanote (Land Title Deed), which has a complete description of the plot of land, its history, size, boundaries, information regarding the division of the land and registered transactions. A Chanote gives the owner the right to dispose of a piece of land at his own discretion, for example, by lease or sale.
There are also taxes and fees required, which have to be paid at the Land Department of Thailand for the transfer of ownership.