IN general, foreigners (non-Thais) have no legal rights to own land in Thailand, except for a few rare exceptions.

This means that the possibility of land ownership by a foreigner wanting to live, or do business in Thailand is, in most cases, none.

Consequently, this gives rise to the need to ‘work around the rules’ or to look for alternative ways to own land in Thailand.

There are a number of various structured ways being used:

Firstly, a foreigner can lease a plot of land from a Thai person or a Thai company for up to 30 years under new laws, and the Lease of Land contract signed by the lessor and lessee is registered at the Land Office.

The Lease of Land contract says that ‘upon the completion of the 30 years lease term, the lessor agrees to renew the lease period for another two x 30 year periods.’

This allows a foreigner to possess, but not own, the land and to use it for 30 years, plus maybe another 30 years, and another 30 years.

But if the land is sold to a new owner, the new owner is not obligated to renew the lease period for another 30 years lease period.

The lease period renewal is a promise made only by the original lessor.

The second way is if a Thai person, possibly a Thai girlfriend, wife or trustworthy friend, owns the plot of land, the foreigner can own the house or building on it.

Thai law does not restrict a foreigner owning a house or a building.

Thirdly, a foreigner can buy shares in a company limited which already owns a plot of land, but to have ownership title of the land, the company limited must have a majority of its shares or capital held by Thais or Thai companies.

Finally, if a foreigner incorporates a company limited with the majority of its shares or capital owned by Thais or Thai companies, this company can own the land.

To have ownership control over the company limited, the Thai shareholders must be either nominee shareholders of the foreigner, which is illegal, or their shareholders’ voting rights must be reduced.

But be wary, this may also become illegal if a current proposal to change to the law goes ahead.

A wise investor will see that, unless he or she wants to risk a relationship with a Thai person going very sour and losing the land and house or getting involved with a company limited structure with hidden illegality or potential illegality, the worry free way will be to lease the desired plot of land for only 30 years from a Thai person or Thai company who has ownership title of the land.

Calm your mind and relax your heart, lease a nice plot of land from a Thai land owner for 30 years, register this long term lease at the Land Office and pay the rent up to 30 years only.

At the end of 30 years, negotiate a new lease with whoever then owns the land.

The alternative is to buy and own outright a beautiful condominium overlooking the sea, beach and the sunset.

*David Tan. David is a Lecturer of Business Law at Asian University and author of the book A Primer of Thai Business Law, which is available online at www.chulabook.com
In Bangkok, the book is available at all Kinokuniya and Asiabooks bookstores.

For further information, email David at blas.inter@yahoo.com