The Thailand Land Code Act and foreign land ownership

Except with approval from the minister of Interior under section 96 bis of Land Code Amendment Act (1999) and some very specific exceptions under the Petroleum Act, Investment Promotion Act and Industrial Estate Authority of Thailand Act foreign induviduals and foreign companies are prohibited from owning land in Thailand under the Land Code Act. Section 86 Land Code Act: 'Foreigners may acquire land by virtue of the provisions of a treaty giving the right to own immovable properties and subject to the provisions of this Code'. The last treaty allowing foreigners to own land in Thailand was terminated in 1970 and since then Thailand has no longer made any treaty with any country to allow a foreigner to acquire land in Thailand.

In theory, a foreigner as a stautory heirs could inherit land under section 93 of the Land Code Act, however this section must been seen in combination with the above section 86, therefore currently does not apply (read more foreigners as statutory heir of land).

Partly foreign owned Thai companies

Prior to May 2006 it was common practice for foreign investors to form a Thai company and to hold land under a Thai company structure. Since the land office guidelines starting in May 2006 ( article) followed by the business registration rules and the proposed amendments to the Foreign Business Act this practice is less common. The question is currently if and what the government will do with existing foreign controlled land holding companies. Partly foreign owned companies holding land are still ignored by the government, even though under present law these companies could, as land holding companies, be deemed illegal and a front for unlawful foreign land ownership. Should the Thai government change its policy towards these companies or issue new laws and/or regulations then these partly foreign onwed land holding companies could be forced to sell the land or restructure their shareholdings and foreign control. Also a stricter enforcement of existing laws relating to foreigners operating a business in Thailand could make it more difficult or costly for foreigners to control a majority Thai owned company ( read simple recent news).

Section 94 of the Land Code; 'All the land which an alien has acquired unlawfully or without permission shall be disposed of by such alien within the time limit prescribed by the Director-General which shall not be less than one hundred eighty days nor more than one year. If the land is not disposed of within the time prescribed the Director-General shall have the power to dispose of it. The provisions on the forced sale of land in chapter 3 shall apply mutatis mutandis'.

Land ownership by foreign companies:

Ownership of land is not open to foreign companies (including Amity (US) companies, BVI companies or any other foreign juristic entity). These companies may have have an interest in a legal Thai company, but may also not use holding companies or nominee structured companies for land ownership. Foreign companies with substantial investments benefiting the Thai economy may have special privileges and exemptions for land ownership granted under section 27 of the Investment Promotion Act, Under section 44 of the Industrial Estate Authority of Thailand Act or section 65 of the Petroleum Act (generally only for the duration of their business in Thailand).

Land ownership by foreign individuals

The Thai government created one exception to the rule in the Land Code Amendment Act B.E. 2542 (1999) (section 96 bis Land Code Act) allowing foreigners to acquire 1 Rai (approx 1600 sq.m) for residential purposes. Under the amendment Act granting permission is subject to the permission of the Minister of Interior and among other rules and restrictions (location) requires the foreigner to remit not less than 40 million Baht (approx 800,000 EURO) into Thailand for specific investment purposes approved by the Board of Investment (BOI approval) beneficial to Thai economy for a specific period of time (in addition to the investment in the real estate property). This is not a viable option for foreign individuals and the exception to the rule was invoked to enable foreign embassies and multi nationals to purchase large houses for their ambassadors and CEO's).

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Requirements to be granted the right to acquire 1 Rai with permission of the Minister of Interior: the land to be purchased shall be not more than 1 rai in area, and the following rules and conditions must be met:

The Acquisition of Land for Residential Purpose by Aliens

An alien bringing money not less than Baht forty million as specified in the Ministerial Regulation into the Kingdom for investment may apply for acquisition of land for residential purpose not more than one rai in area, provided also that permission must be obtained from the Minister. Under section 96 bis of the Land Code, the application for such acquisition of land shall be in accordance with rules, procedures and conditions prescribed in the Ministerial Regulation as follows:

1. In the case of an alien, who brings money for investment and wishes to apply for permission to acquire land for residential purpose, shall lodge an application (Alien 4 Form) to the competent official under section 71 of the Land Code together with the following documents:

2. A person who is granted permission shall maintain the investment period not less than five years. He/she is required to produce the evidence of possession in the investment in 1.2 as the case may be as current, which shall be not less than Baht forty million, to the competent official according to section 71 once a year, on five consecutive years and each year shall be no later than the date making the acquisition registration of the aforementioned land.

3. A person who is granted permission shall utilized such land for a residential purpose of his/herself and the family in a way that is not contrary to the local custom or good living of the local community.

4. A person who is granted permission shall inform such land utilization for a residential purpose to the competent official of land office according to section 71 within sixty days as from the date of utilization.

5. A person who is granted permission shall facilitate the competent official supervising the use of such land to ensure that the utilization is in accordance with rules and conditions prescribed in the law once he/she receives a written notifications from the competent official under section 71.

6. If a person granted permission withdraws an investment in the business or activity before the due date of investment in 2, he/she shall inform in writing to the competent official according to section 71 within sixty days as from the date of making the withdrawal.

7. A person granted permission shall utilize such land for residential purpose within two years as from the date of the land acquisition registration.

8. If a person granted permission does not comply with the rules and conditions in 2-6, the Director General shall have the power to order such person to dispose of the land in a portion of his possession within the period of not less than one hundred eighty days and not more than one year. If the time limit elapses the Director General shall have the power to dispose of such land. Also, if the person does not comply with the condition in 7, the Director General shall have the power to dispose of such land.

9. Any foreign language document shall be translated into Thai language. The translation shall be certified according to the Ministerial Regulations (B.E. 2540) issued under the Purview of Administrative Procedure Act B.E. 2539. (Phraratchabunyat Vithipratibut Ratchakarn Thangpokkhrong B.E. 2539)

10. In the case of a person bringing money into the Kingdom to the amount of Baht forty million for investment and has bought the land less than 1 rai , if later and within the period of investment, that person wishes to buy additional land, in this instance, the documents attached to the current investment can be used along with the application for acquisition of the additional land.

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Last update 07-02-2010