It is stated under Thai law that foreigners cannot legally acquire land in the country, but there are actually exemptions to this law. There are three special ways in which a foreign national could be allowed to legally acquire real estate, outside of condominiums, in the Kingdom of Thailand.
Make a Significant Investment into the Thai Economy
First off, an investor could make a significant investment into the Thai economy in order to be granted an exemption by the Ministry of Interior. The Ministry rewards foreign expats that injects cash into the economy. However, the amount that is required is not an amount every foreigner can afford to generate on their own. Specifically, a foreign national has to put in THB40 million worth of investments into the economy in order to be allowed to own land under his name in Thailand.
Forming a Limited Company
Alternatively, a foreign national or a group of foreign nationals could legally acquire land under the name of a limited company incorporated in the country. However, they have to find local investors to join them in the board of the company. Thai law requires that a limited company must have 60% of its ownership held by Thai locals. In addition, they must not be nominal shareholders written into the incorporation articles solely for the purpose of incorporation. These locals must also be able to exercise voting rights within the company, and should have share ownership and profits with the foreign nationals in the company.
When these requirements are met, the foreign national can then use the limited company’s rights to purchase real estate in the country. Given that the company should be majority owned by locals, this option is a big risk so it is advisable for the investors-would-be to only choose local Thais that they have a working relationship with and to consult with legal experts on the intricacies of the process. The Kingdom has, starting in 2006, become actively involved in screening foreign-owned limited companies for compliance with Thai laws.
Similar to condominiums, land in Thailand can also be leased to foreign nationals interested to own these properties in the country. However, foreign nationals can only lease real estate property with assurance of legal protection for a maximum period of only 30 years. If the foreigner wants to extend the lease, they will no longer be accorded rights under Thai law because negotiated lease extensions are private by nature after the 30-year period has been reached.
Limits on Land Areas
Qualified foreign nationals are limited in the size of land that they can have ownership of. Specifically, a foreigner can only own land with a maximum land area of 1,600 square meters. In the local language, this is equal to 1 Rai.
To summarize, a foreign national can only own land legally by acquiring permission from the Ministry of Interior, and this requires a THB40 million investment. Alternatively, he can set up a limited company with a specific number of Thai locals on board as investors, or he can negotiate a lease agreement that will him to use a Thai-owned land for his purposes.