Thailand, formerly known as “Siam” and still known as “Suvarnabhumi” or the “Golden Land,” has been attracting foreigners to its shores for centuries and this immigration continues to this day.  The country ranks high in several international rankings including the following:

  • Thailand ranked the 8th most attractive host economy in the world as determined by the UNCTAD (United Nations Conference on Trade and Development) World Investment Report 2014-2016.
  • Thailand was ranked 22nd in overall expat opinion behind Singapore (#1), India (#14), Taiwan (#18) and Hong Kong (#20), and ahead of the Philippines (#24), Malaysia (#25), Indonesia (#26), Japan (#29), Vietnam (#30), South Korea (#36), and China (#41).  Thailand was also ranked 12th and 14th respectively in terms of overall experience and family life.  These rankings are according to HSBC’s 2017 Expat Experience Report.
  • Bangkok ranked 14th and Chiang Mai 2nd in 2016 by Travel & Leisure Magazine’s Annual World’s Best Cities.  Mercer HR’s 2018 Costs of Living Survey ranked Bangkok as one of the cheapest cities in the region ranking at 52nd.  The cost of living is cheaper than in Hong Kong (#1), Tokyo (#2), Singapore (#4), Seoul (#5), Shanghai (#7), Beijing (#9), Shenzhen (#12), Guangzhou (#15), Osaka (#23) and Taipei (#27), and more expensive than in Yangon (#91), Jakarta (#117), Ho Chi Minh (#124) and Hanoi (#137).

In addition to the above rankings, Thailand is also remarkably free of violent crimes, as well as ethnic, racial and religious tensions.  Overall, Thailand is a safe and attractive country in which to reside and it offers good value. With this backdrop in mind, we discuss the legal framework for foreigners to acquire real property rights in Thailand.


  1. Foreign Ownership of Land in Thailand

As a general rule, Thailand’s Land Code does not permit foreigners, including foreign-held entities (as discussed below), to own land in Thailand.  The relevant provisions may be found under Chapters 8 and 9 of the Land Code.  The very title of Chapter 8, “Limitation of Foreigner’s Rights to Hold Land,” reiterates that sovereignty over one’s territory has always been of fundamental importance in the Thai psyche as the nation has never been colonized by a Western Power even as its neighbors fell to British, French and Dutch colonialism.  Despite this prohibitive stance, however, a few rare exceptions are possible which allow foreigners to own land in Thailand.

For example, the Land Code does provide for international treaty obligations that could concede rights to foreigners to own land in Thailand. It is pertinent to note, however, that there are no international treaties currently in force that establish such an obligation on the Code though this legal framework does exist that makes foreign land ownership possible in the future.

Furthermore, the Land Code was amended in 1999 to allow foreign individuals able to invest at least THB 40 million for 5 years in beneficial business investments or Board of Investment (BOI)-promoted businesses in the Kingdom to acquire up to 1 rai (about 40% of 1 U.S. acre) land for residential purpose subject to Minister of Interior approval and other requirements.  To be clear, the minimum THB 40 million investment must be for business purposes only and not to acquire real property.

Lastly, the Land Code permits the inheritance of land by a foreigner who is a lawful heir provided that the foreigner has also received approval from the Minister of Interior. The total land owned by the foreigner in question must not exceed the amount set forth under Thai law (e.g., 1 rai for residential purposes).  Foreign heirs have not less than 180 days, but not more than 1 year with which to sell off any excess land they have inherited.

          Thus far our discussion has centered around land ownership by foreign individuals.  Chapter 9 of the Land Code, entitled “Limitation of Rights to Hold Land of Some Categories of Juristic Persons,” equally limits the land ownership right of four specific categories of juristic persons or entities as follows:

  1. a)Limited companies and public limited companies with registered shares held by foreigners exceeding forty-nine percent of the total registered capital, or those in which foreign shareholders account for more than half of the total number of shareholders. Such companies will be regarded as foreign companies even though incorporated in Thailand under Thai law for the purposes of the Land Code.
  2. b)Registered limited partnerships and registered ordinary partnerships in which the foreigners invest their capital at greater than forty-nine percent of the total capital, or those in which foreign partners account for more than half of the total number of partners.
  3. c)Associations including co-operatives in which the foreign members exceed half of the total number of members or those which operate for the benefit of foreigners.
  4. d)Foundations with objectives focusing particularly or mainly for the benefit of foreigners.

All of these juristic entities, collectively foreign-held entities, are also generally prohibited from owning land in Thailand though once again exceptions do exist.

Foreign-held entities may own land provided they receive approval from the BOI or purchase land in an approved industrial estate (i.e., approved by the Industrial Estate Authority of Thailand or IEAT).  Such land may only be used for business purposes and not as a way to build a residence.

Under the Eastern Economic Corridor Act, which Thailand’s National Legislative Assembly passed into law on 8 February 2018, foreign individuals and foreign-held entities may own land for business purposes outright within Special Economic Promotion Zones (SEPZ) located in the Eastern Economic Corridor (EEC), which is defined as the three contiguous Eastern provinces of Chonburi, Rayong and Chachoengsao.

By way of abundant caution, the Land Code imposes a duty of care on Land Department officials recording land rights and gives them discretionary powers if they have reason to believe that a land acquisition, whether by a Thai national or a majority Thai-owned company, is actually being made on behalf of a foreigner to seek instructions from the Interior Minister.  The Code imposes penal liability on anyone (generally aimed at Thais) who acts as an agent or nominee for a foreigner or foreign juristic person thereby allowing them to circumvent the foreign land ownership restriction by stipulating a fine of twenty thousand Baht and a prison sentence of two years, or both.

  1. Foreign Leaseholds & Ownership of Buildings in Thailand

Despite the broad prohibition on foreign ownership of land in Thailand, foreigners may enter into contracts for the hire of property pursuant to Thailand’s Civil and Commercial Code (“CCC”) since there is no express prohibition thereto.

All leases must a reduced to written form and must necessarily be signed by both parties to be enforceable. Lease terms in excess of three years must be registered with the relevant Land Office in which the land is located, and the CCC mandates leases cannot exceed thirty years. However, the Leasing of Immovable Property for Commercial and Industrial Purposes Act, B.E. 2542 (1999), allows for direct leases (i.e., not subleases) of property used for commercial and industrial purposes for over thirty years, but shall not exceed fifty years when the concern in question meets all qualifying criteria such as investment requirements and obtains Ministerial approval.

Lease renewals are also possible for one additional period.  So, a foreigner with a 30-year lease on property may enjoy a contractual right for an additional 30-year period for a total of up to 60 years.  In general, longer or additional extensions (i.e., a second extension of time after the first extension of time has expired) are currently not enforceable under Thai law so there is no such thing as a 90- or 99-year lease per the Land Code in Thailand.  The Eastern Economic Corridor Act, however, offers an exception allowing for 50-year leases plus a one-time renewal of not more than 49 years again within the EEC.

For what it is worth, foreign individuals and foreign-held entities may own outright without any limitations any buildings on leased land.  The CCC specifically recognizes the right of superficies and does not make the distinction between a Thai national and a foreigner.  A superficies is a right to use the land and to own the structures built upon the land without obtaining ownership rights over the land itself. A right of superficies may be established either for a period of time up to 30-years, or for the life of the owner of the land or for the life of the superficiary (i.e., the person owning the superficies). In lay terms, while foreigners generally may not own land, they may enjoy ownership rights to any house or structure build on land and this offers some level of equity in a foreigner’s real property investment.  A right of superficies registered for a specified term constitutes an interest in the land that may be transferred to or inherited by other foreigners.

III.  Foreign Condominium Ownership

As an alternative to owning land and enjoying leaseholds, a foreign individual or majority-held company can own a condominium outright provided that the total foreign ownership in such condominium project is not more than 49% of the total units.  The rationale is because the condominium project collectively owns the land on which the condominium building and common areas rests.  More than 49% ownership means that foreigners will be the majority owners of the underlying land and common areas.

  1. Foreign Security Interests on Real Property in Thailand

While a foreign person or juristic entity may not normally own land in Thailand, it may enjoy security interests on land as a mortgagee-creditor.  Section 80 of the Land Code read together with Section 16 of the Financial Institutions Act, B.E. 2551 (2008) allows a foreign person or juristic entity to accept a mortgage without prior approval of the Fiscal Policy Office, Ministry of Finance, on the express condition that the Land Department is satisfied that the mortgage does not fall under the definition of credit foncier and associated business activities according to the Financial Institution Business Act, BE 2551 (2008). Similarly, Section 702 of the CCC and the Land Code does not distinguish between domestic or foreign mortgagees – both having equal rights.  Should ownership of real property in Thailand vest with a foreign person or juristic entity, disposal of the property must occur within five years from the date of vesting, which period the Bank of Thailand may extend at its own discretion.

  1. Taxes on Real Property in Thailand
  2. Taxes on the Transfer of Property in Thailand      

The transfer of real property in Thailand attracts the following levies:

  1. Official or Transfer Fee of 2% of the appraised value of the property (as per the Land Department appraisal)
  2. Stamp Duty of 0.5% of the appraised value or purchase price of the property, whichever is higher.  This duty is payable if the property is owned for 5 (five) years or more by the seller.  Otherwise, Specific Business Tax (SBT) is payable.
  3. Specific Business Tax at 3.3% of the appraised value or purchase price, whichever is higher.  SBT is payable if the seller has owned the property for less than 5 (five) years.  If owned for 5 (five) years or more, then the Land Department will assess a stamp duty instead.
  4. Withholding Tax of the registered sale value of the property or appraised value, whichever is higher if the seller is a company. In case of an individual seller, withholding tax is calculated at a progressive rate based on the appraised value of the property linked with the duration of possession and the personal income tax.

Under Land Department regulations, the onus to pay the official or transfer fee is split between the seller and the buyer.  The onus to pay on the stamp duty rests with the buyer.  The onus to pay the specific business tax and the withholding tax is on the seller.  In practice, however, the parties to a sales agreement may agree to split these levies in a different manner with the buyer assuming some or even all of the responsibility for paying the specific business tax and the withholding tax.

  1. Annual Property Tax      

The maximum property tax rate is 12.5% of the actual or annual rental value of land or buildings that are used for any purpose other than as the primary residence occupied by the owner. Similarly, if buildings on a particular plot of land are owned by a person other than the owner of the land, the owner of the buildings is liable to pay property tax.

The proposed land and housing tax, which has not yet been ratified or passed as law, prescribes new maximum tax rates for real property as follows: 0.5% for personal residential use, 2% for commercial use, and 5% if the property is unoccupied or unused.

Taxpayers are required to file tax returns at the local municipal or district office where the land and buildings are situated by February of each year. Taxes must be paid within 30 days after notification of tax assessments. Failure to file tax returns results in a fine of THB 200. A penalty of 2.5% of the tax liability is imposed if the tax is paid late but within one month after the due date; the amount increasing to 5% if paid within the second month after the due date; 7.5% if paid within the third month after the due date; and 10% if paid within the fourth month after the due date.  After four months, the revenue authorities are empowered to seize and dispose of the property so as to collect the arrears.


Altogether, Thailand is an extremely attractive country in which to invest and to reside and has been so for hundreds of years.  At the same time, however, there is a network of laws and legal issues that need to be considered even before entering the country.  This paper has introduced readers to a simplified legal overview regarding foreign-owned or held real property rights in Thailand, but it is not intended to be exhaustive nor a substitute for specific legal advice tailored to each client’s situation.  Local guidance is essential and Ployprathip International Law Office, as a full-service law firm, stands ready to assist foreign investors wishing to acquire real property rights in Thailand.