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Owning Property and Securing Real Estate Investments in Thailand


  • As developers, and developments vary, so typically the legal structures they use to sell real estate to foreigners also varies. This can lead to confusion between what is the specific law in Thailand relating to real esate and how ‘practice and implementation’ can be different.
    The main appropriate methods for acquiring real estate interests as a foreigner are:


  •  Purchasing a “Foreign Freehold Condominium. In legally registered condominiums 49% of the registrable area (not therefore, necessarily, 49% of the units) can be sold directly and legally to foreigners.


  • Purchasing a lease of 30 years. The maximum term of a registered residential lease in Thailand, is, 30 years. In a direct landlord and tenant relationship, if your lease of 30 years is the equivalent price to a freehold, then you should of course look very carefully at the security of tenure under the lease.  Furthermore, numerous companies will offer ‘renewals’ to the lease term, which notably, cannot be registered but can be placed in the contract. These renewals can vary in their strength and reliability. Some developers are prepared to do their best to try and offer the lessee almost the same protection as if the purchase were freehold, and some are not prepared to assist to such a degree. Please note that foreigners can also ‘own’ buildings, so if there is a land lease of a plot and a property exists upon or is built upon that leased land, then building can be registered to the lessee. The correct paperwork for registering this building ownership should be vetted carefully.

Collective Leasehold

  • Purchasing a lease of 30 years, and ‘participating’ in the Thai company which controls the land and issues the renewal decision for the additional, typically 2 sets of 30 years. Please note that there is no law about the maximum number of ‘renewals’ but there are lots of myths in the marketplace about what the renewals mean. A renewal of a lease, if unregistered, can be undone or evaded if the land or property against with the lease is registered is sold or passes to a third patry. It logically follows that if the land is ‘locked’ and cannot be sold without approval of an owners committee comprising possessors of property on the land then the owners become protected by virture of their own committee. This means that the legal structure of the Owners Committee then becomes relevant to security of tenure and saleability of your legal interest in the future.  Please note that buildings can also be dealt with separately and owned separately and directly in the name of a foreigner in such a structure.

Thai Company

  • Using a Thai company, which is involved in conducting business in Thailand, through genuine joint venture with Thai shareholders and foreign shareholders, to acquire the property interest. There was a period of time when this option was very popular amongst foreigners, who took short cuts in relation to the way these companies were set up, and also would not recognize or acknowledge that if the structure is not legitimately business oriented, but rather solely for the purpose of acquiring a land interest in Thailand, that there would be a strong likelihood of contravention of the Land Code of Thailand, which specifically refers to restrictions on ‘Aliens’ controlling directly or indirectly land. If you own a Thai company, you have to file accounts, comply with corporate requirements relating to shareholder meetings, monitor the power of the directors and ‘maintain’ the company with a view to keeping it in good shape for a re-sale.

Shared Ownership

  • Increasingly popular and increasingly more marketed by developers, fractional or shared ownership of a property. If a product is being sold under the banner ‘Fractional Interest’ then there should be a legal link between the property and you, other than a contract – such as a share certificate or other corporate interest connect to the control of the real estate. Timeshare is distinguishable as timeshare relates to usage right through contract. Various matters such as the exchangeability of the interests; the associated fees for using the interest, and the longevity of ownership of the product to which the fractional relates, any usage or ‘subject to availability’ restrictions, together with an inspection of the level and management of amenities supporting the pogram should be considered.

Alternative Structures

  • There are some more ‘exotic’ methods of control, but anything which appears very strange; unusual; isn’t commonly used, should be scrutinized carefully and if too complicated, avoided as this may hinder a re-sale.


  • If you are not a resident, not married to a Thai national, and/or not operating a business in Thailand, then you will not be able to successfully obtain a mortgage from a Thai bank in Thailand to raise finance. Additionally, there are prohibitions on issuance of loans to foreigners which inhibit banks from lending in Thailand. There have been a series of efforts by Thai banks, through overseas branches, to attempt to set up structures of loans to foreigners, but such programs are lengthy and unsuitable to most timelines for a standard property transaction, and the costs involved such as paying a substantial administrative fee to the bank and paying the banks external and internal legal fees and expenses means the exercise in even its limited availability format is not regular nor timely.
  • Certain overseas banks will consider lending monies if they know you will be purchasing a secure legal interest in property in Thailand, and some independent financial advisers also operate in Thailand specializing in assisting leveraging monies from your financial and other foreign assets including property. As with any type of advice, due diligence on the credibility and good standing of any adviser trying to assist you is a must.

The Purchase Process

  • Bearing in mind the different types of legal structures available, not all transactions are the same in Thailand relating to property purchase. However, if your adviser explains the processes and timelines for your purchase at the outset, you will be able to monitor proceedings and ask questions where appropriate. You should not try to hurry along critical land title checks, as patience can assist identify and hopefully solve issues. It is reasonable to expect most transactions to start and complete within 30 days. If the seller is very organized, and the due diligence straightforward this timeline can of course be reduced significantly.
  • Please bear in mind that your ‘sales contract’ may be a lease agreement; a lease agreement and building purchase agreement; a freehold acquisition agreement; a share sale and purchase agreement or a combination of those and therefore you will need to consult with your advisers on the differences. In addition, there may be some ‘ancillary’ contracts, such as an estate management agreement; binding or non-binding rules and regulations; rental programs or usage right schedule.

Remembering the Rules of Business

  • The transactions least likely to have issues at completion, is where the purchase price is exchanged at the same time as the legal interest in the property. Where this varies, additional caution and consultation on risk is necessary.

Physical Due Diligence

  • In addition to taking care with the contracts, you should of course also take measures that you would take in any jurisdiction regarding compliance of the property with local building regulations, and the structural and non-structural state of the property. A check of compliance with various local rules and regulations is necessary which can extend to height restrictions, stipulation on the maximum number of rooms in the building permit; stipulation on the maximum number of units in a residential estate, environmental regulation compliance such as distance from the beach or distance from the shoreline in resort areas. You ought to engage a surveyor to conduct a survey of the property and report to you on any issues, before any monies change hands. This is common practice in other jurisdictions and there is no ‘law or custom’ of Thailand requiring you to vary this level of due diligence and inspection.

Land Due Diligence

  • All property is generally built on land, except some unique water based properties. Therefore, you should in Thailand’s legal framework, instruct your lawyers to conduct a full check into the history and legality of the land. In Thailand, there is no organized state compensation scheme for illegal or ‘bad land’ so the risk is the buyers and the owners. There are lots of different land titles in Thailand, and your lawyer will explain in detail, should you wish, the legal status of those titles. The most common form of land titles are known in English as Chanote; Nor Sor 3 Kor and Nor Sor 3. There are others. All of those titles, have at one time or another in Thailand, had instances of investigation which have sometimes turned into public scandals. In relation to your purchase, you can seek comfort from engaging your law firm to make the appropriate checks. They should even check the courts, to see if the land owners are in disputes in the courts about other matters.


  • Amazingly, access from the public road to a private property can be overlooked when due diligence is checked with a property. Additionally, some developers have a ‘unique’ approach to the right to use and enjoy property, post-purchase which can affect access. For example, developers have been known to install electric gates which will only open if management fees have been paid and are up to date, where prevention of access to a property in such circumstances is actually illegal. Any such activity should be challenged, as you should have unrestricted rights of access to your property. Please also note that rights can be registered against land titles, but if you are ‘leasing’ the property, then your lease should contain reference to those rights, and the references must provide sufficient detail on the rights, what they apply to. For example – rights could be limited to pedestrian, not vehicular access. Overall, most properties have good access, but of course you should exercise caution and not overlook an obvious point to check due to over-confidence.

Taxes and Other Expenses – Budget for Investment

  • If you are purchasing property from a development company or from an individual you should create a budget in a simplified spreadsheet of the costs you will incur in addition to the actual purchase price.
  • In certain transactions, it is actually possible to reduce tax liability, but you should not attempt to reduce liabilities without checking if the method is legal or not. You cannot alter the standard tax rates, such as Stamp Duty, Lease Registration Fees, Building Transfer Fee, or Land Transfer Taxes.
  • In a managed estate, certain management costs will be fixed. You should have regard as to how these might be increased in the future, and who controls on what basis these fees will be increased. Control and supply of utilities can also be important, especially where some management companies seek to make a ‘profit’ on aiding supply of essential utilities. Back-up generator facilities may or may not exist, and the pest control and rubbish collection facilities should also be examined for adequacy. Potential variable costs should also be assessed, and the use and management of a sinking fund.

Developers Tax Programs

  • The approach that a developer’s tax regime is not the concern of the buyer can lead to issues should there ever be a dispute over the transaction. Therefore, be mindful and wary if you are asked to make substantial offshore payments relating to a transaction onshore, and be aware that if your monies do not come into Thailand, then if you do have a dispute, you may have to file a legal claim not only in Thailand but other jurisdictions, thereby creating a large barrier cost to ever filing a claim. Such an example is quite extreme and rare, but nevertheless, there is an element of common sense to be applied to what you are asked to do in terms of transfer of monies by a developer or seller. Rather than second guess, you should ask your advisers to give you an opinion on any structures and how they relate to you.

Using a Foreign Offshore Company for your Investment

  • A popular practice has emerged in recent years of interests being acquired through an offshore company to facilitate a tax efficient re-sale of the company and the assets it holds in the future. Re-sale of a foreign company does not generally trigger a taxable event in Thailand. However, tax is not a topic which can be simplified with a one-solution-fits-all approach and you should seek advice which will consider your nationality; your tax domicile; where your funds are coming from; what you will do with the funds if you ever sell the interest. This is an element of planning which can sometimes be forgotten or pushed to one side in the excitement of a purchase or investment.

Transferring Funds into and Outside of Thailand

  • Special rules apply to purchasing a condominium in the foreign quota title. On your remittance form, you should stipulate that the funds are being transferred ‘for the purpose of purchasing a foreign condominium unit in Thailand Unit No. X’. Note of course, that if you change the unit number, you will need to change the form, in order to procure registration at the land office.
  • For other types of acquisition, you should keep all remittance slips and acknowledgements and keep all receipts received from the developer. Please note that in order to transfer monies out of Thailand, you will be asked to provide evidence that all appropriate taxes have been paid and accounted for.

Furniture and other items

  • Casual verbal agreements on furniture and contents of property often causes problems which cannot be remedied without great expense after the purchase. Therefore, to avoid doubt and problems, if you are purchasing a property you should have a schedule of damage that you accept exists in the property (this will be very straightforward to produce, if you conducted a survey)  and you should itemise all contents and furniture you intend to acquire as part of the purchase. If for any reason the seller should like to keep these items separate from the main property purchase, you should still insist on a separate contract relating to the furniture and other items. This will in practical terms serve as a checklist when you take possession of the property following the acquisition of it. You should remember to take possession of all of the instruction manuals and take a set of the electrical and other construction drawings of the property so that if you do decide to renovate or you need to conduct a repair in the future, you are able to provide the plans to the contractor.


  • Quite simply, from the moment that you have paid a reservation fee, and certainly when you pay the balance of the purchase monies, make absolutely sure that the property is insured against the normal risks with a reputable insurer and that the policy you have has been checked and the ‘exclusions’ on the policy are reasonable. Insurance companies will not generally negotiate their standard policies much, but if a policy is so unreasonable as to not represent value in terms of paying the premium, then a different insurance company can be used instead.

Off the Plan Acquisition

  • Off the Plan developments may be supported and backed by the finances of public companies, or they may be backed by the finances of private individuals or limited liability companies. Whatever the case, you should conduct credibility and financial due diligence of the key personnel and directors of the company you are dealing with. When you have reached an appropriate comfort level, associated with your own risk profile (between low risk and high risk), you should then move to formal  due diligence of the off-the-plan project.
  • As in pre-built property purchases, you need to check the land title of the property as explained above. The common issues to consider are whether or if:
  • the marketing materials will match the delivered product
  • the contracts are fair and have regard to Consumer Protection Rights
  • the management of the property post completion has been planned properly and professionally. Attaching a branded name to a project does not mean it will be managed properly – evidence of budgeting and planning should be sought.
  • The timing for construction, remedying of defects, and handing over the property is realistic
  • The payment terms are suitable and allocate risk appropriately
  • The developer has access to funds other than buyer’s purchase monies
  • Any project finance is managed properly and will be used exclusively for the project you are buying in
  • The status of the Owners Committee and implementation of rules, so that this is not entirely controlled by the developer, unless it is proposed the developer will exclusively manage the property
  •    Any overdraft facility has been completely used or what the status of drawdown is
  • The contractor has been properly appointed and whether there are any issues with the contractor
  • You have inspection rights throughout the building process
  • You can vary or not vary the plans in any way to suit your own planned use of the unit and whether materials can be changed or substituted by the developer or you
  • There are many more items to consider, and this list is not an exhaustive list

Resort or Hotel Managed Property

  • Typically, purchasers will buy units in a resort or hotel managed property for investment and capital appreciation, revenue return or revenue sharing with the owner/operator with limited interest in usage rights of the property. However, there are some buyers who actually wish to live in resort or hotel property, to be able to use the hotel facilities in their daily life. Whatever the reason, there are some unique legal matters to be checked which include
    • The length of term of operation by the branded operator
    • The contingency plan should the operator decide to exit early and not manage the property anymore
    • The substance and backing of any ‘guaranteed’ rental return
    • The usage rights of owners, in comparison to ‘guests’
    • Any restrictions or impediments on re-sale of the property
    • Insurance of the resort, and your unit

    Estate Agents, Brokers and Intermediaries

    • Lawyers like estate agents, because they may refer business to that law firm. However, law firms must remain independent of brokers, as one of the principles of legal advice is independence. Brokers are motivated by commission, but are bound by rules in Thailand relating to providing a service and representation. Therefore, choose a professional, reliable, and friendly agent, who is prepared to allocate time to you before you register with that agent. If you are in doubt about information supplied to you by an agent, you can contact a developer or third party to verify that information, and the agent will not be able to allege that your circumventing their agency, so long as you do not breach the terms of any registration with that agent.
    • Pay close attention to re-sales, and try to establish if there are any third parties other than the lead agent who stand to benefit from you completing the transaction. If you are aware of such facts then you will be able to mentally value the attractiveness of your contemplated transaction more accurately.


    • Foreign wills, subject to certain rules, are recognized and enforceable in Thailand. However, in practice, court applications, notarization and formal administrative procedures can cause time delays in administering your estate. Therefore, a specific Thai will to deal with your assets is advisable. Furthermore, if there is an offshore element attached, such as an offshore company you have set up to acquire your property interests, then you should also make a will in the appropriate jurisdiction. You should notify the lawyer dealing with your will in your home jurisdiction that you have created other wills, so that that lawyer can ensure there is no conflict between the documents. Wills should be made in English and in Thai for good practice.

    General Tips

    • Don’t Take Short Cuts
    • Surround yourself with professionals
    • Double check information
    • Get to know the parties and companies you are dealing with
    • If you are working from a distance, work hard on effective communications with your advisers and other parties
    • Think not only about the asset you are investing in, but also the management of it
    • If you don’t enjoy the process of acquisition, think about why you are acquiring
    • Separate emotional like from cold clinical analysis of the property, suitability and price
    • Monitor the real estate market leading up to and throughout the purchase
    • Manage your foreign exchange calculations
    • Plan late delivery of off the plan property, and choose quality over speed
    • Using your Legal Advisers Effectively
    • Establish scope of engagement of your lawyer through an engagement letter
    • Establish and agree the price for works
    • If you negotiate legal fees then you may also be reducing the scope of works
    • Communicate your motivations for purchase as early as possible
    • Pay your deposit on time, and pay your bills on time in order to demand timely service
    • Tell the truth to your advisers
    • Establish who the main point of contact on your transaction is, and who is the partner ‘managing’ the transaction and those working on it
    • Request translations of documents if documents are produced in Thai language
    • Make sure you plan your availability to sign original documents and take into account that you may need to post documents to facilitate processing of the transaction
    • Make sure you understand what you are signing ‘Powers of Attorney’ for
    • Try to be friendly with your lawyers, so they can enjoy working for you

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