For the past several years, foreigners working and living in Thailand have been barred from owning land for residential purposes. Purchasing land lawfully as a foreigner is considered one of the most complex matters today. However, a recent update to this restriction is being reviewed by the Government which may change the way foreigners can live and operate a business in Thailand, providing them with a way to also legally own land in the country.
The issue of foreign land ownership is not a new issue among regulators. According to government spokesman Anucha Buraphachaisri, the upcoming update would be an amendment to an existing ministerial regulation enacted in 2002. Regardless, the amendment, if passed, will open doors to a select group of high-net-worth foreigners to not only contribute to the country’s growth but also to the overall recovery of the Thai economy.
What are the purposes of foreign land ownership in Thailand?
The number of wealthy ex-pats choosing to live in Thailand, including retirees, skilled professionals, and investors, has been on the rise. Foreigners with business entities in Thailand tend to seek approaches that suit them best in terms of compliance with the Thai government regulations to ensure their business operates smoothly without unforeseen problems.
If the prospective amendment is to be enacted, qualified foreigners will be able to own up to one Rai of land for residential purposes. The caveat is, however, that foreigners need to invest at least THB 40 million in government bonds, infrastructure funds, or real estate for a minimum of three years. Moreover, they can only own land within Bangkok, Pattaya, and other specified municipalities of certain provinces.
According to the Thailand Development Research Institute, the upcoming amendment aligns with the government’s objective of retaining affluent foreigners living in Thailand, thereby providing them with an incentive to invest and carry on with their business operations.
“The government must create an investment environment and improve laws to make investors feel it is worth doing business here”
Nipon Puapongsakorn, Distinguished fellow, Thailand Development Research Institute.
What type of real estate can foreigners currently own in Thailand?
If you are a foreigner, ownership of landed property is currently impossible, though it is possible to be granted the restrictive option of freehold ownership. This allows foreigners to own up to 49% of a property’s unit area. This also applies to branded residences such as luxury resorts or villas where a similar principle of owning 49% as a foreigner and 51% as Thai is granted. For condominiums or hotel-licensed condominiums, a foreigner can legally own the full title of their unit.
The reason why this approach is not fully ideal for most foreigners is if they seek to own over 49% of a property, they are required to set up a limited company in Thailand while operating as a legitimate business. This approach tends to be complex and more costly.
Who are eligible under the upcoming amendments?
Four groups of foreigners so far have been identified to be eligible for the land ownership scheme. The eligible groups will need to hold Long-Term Resident (LTR) visas.
- Affluent individuals; mostly entrepreneurs, business owners, or investors who have familiar grounds and experience as founders or investors residing in Thailand.
- Long-term pensioners; individuals, namely retirees, who have been living in Thailand and receive consistent pensions or other income streams during their stay in the country.
- Foreign Specialists; businesspeople based in Thailand working as specialists in a particular industry who earn high incomes.
- Working professionals are specialists who have extensive experience as professionals in a specific industry.
The minimum investment to own land as a foreigner under the upcoming amendment will be THB 40 million (approximately USD 1.05 million). However, the proposed amendment is contentious and has triggered public criticism, raising doubts about its final form.
The proposed scheme will also only be in effect for five years. Nonetheless, if the amendment is passed and approved, it could mean that Long-Term Leasehold Agreements and Limited Liability Companies, which are both part of land ownership rights, could be amended to serve more of the residential purposes in land purchase for foreigners in Thailand.
Factors to consider as a foreigner in Thailand
As of writing, it is still difficult for foreigners to buy land as the amendment is currently under review. Other options mentioned earlier in the article may be more viable at this stage. We will, however, be monitoring the situation closely.
At Silk Legal, we are prepared to provide you with the assistance you need to ensure you and your business make informed decisions and comply with Thailand’s laws and regulations. For any questions you may have regarding the limited ownership of land or others, please reach out to us at [email protected]. Our team is always ready to help you.