Overall, property laws and homeownership in Thailand has its peculiar specifics but is not so different from purchasing real estate in countries like the U.S., Australia or Germany. The only exception is that foreigners are not allowed to own land. According to the Land Code Act, Thailand’s foreign land ownership restrictions apply to land only, and not a building on it or a condominium registered under the Condominium Act.
This notwithstanding, if you would still like to buy DDProperty land for sale in Thailand, you should consider engaging the services of a lawyer. Many expatriates have tried to own land via their Thai girlfriend or spouse without adequate form of legal protection in case of a dispute or divorce. Luckily, there are alternatives that will ensure that you do not lose your investment. These include:
- Setting up your own Thai limited company
- Through leasehold agreements
- Marrying a Thai
Buying Land through Your Thailand Company
If you are determined to own land in Thailand, make sure that you have a lawyer go through any documents you receive from the seller. Since foreigners cannot own land, they can do so through a Thai registered company. However, there are different types of Thai business entities:
Thailand Amity Treaty that allows Americans to conduct business in Thailand, but does not offer structures for owning land
A Thai limited company which has to meet several stringent requirements before it can own land
Thai Limited Company Requirements
Thai limited companies are required to have mixed foreign and Thai ownership with foreign ownership being less than 49 percent. A foreign national has the right to control the company if given legal power of attorney by Thai shareholders by assigning greater voting rights.
To form a private limited company, the following steps have to be completed:
- Reservation of the corporate name with the register of Partnerships and Companies, Business Development Department, Ministry of Commerce. The company name should not match any other registered company and reservation is reserved for 30 days, and you will not be required to pay a fee.
- Filing the Memorandum of Association with the Business Development Office and it contains the company’s reserved name, objectives, location, capital and per share value in either THB or USD.
- Minutes of a Statutory Meeting with list of subscribers, address and number of share. This report indicates the adoption of articles of association, establishment of preference shares and rights, among other details.
- Shares payment by subscribers depending on the agreed upon amount in the statutory meeting.
- Company registration which should be done within three months of the statutory meeting through filing an authorized-directors’ application for approval by the registrar within five working days.
- Tax registration with the Revenue Department. Companies making more than USD 17,000 or THB 600,000 a year should also register for VAT.
Types of Land Title Deeds
As you venture into owning land in Thailand, it is critical that you understand the distinction between different types of title deeds before you engage in purchase transactions. The title deeds come in different names as:
- Chanott ti din: These are the best since the land is accurately surveyed giving you incontestable possession of the land. However, only 10 percent of land in Thailand is under this title.
- Nor sor sam: These are the majority title deeds, but are less accurately surveyed. They clearly define physical boundaries.
How to Purchase Land
Once you have your limited company registered, hire a real estate attorney in Thailand. Considering that the industry is still unregulated, an attorney will provide you with additional security in addition to a real estate agent. You need to have the following documents:
- The company certificate of incorporation
- Memorandum of association
- Notaries certificate
- Minutes
- Shareholder list
- Power of attorney
- Copies of authorized directors IDs
- Foreign co-owner letter
Once you find land for sale on Property Guru you like, carry out due diligence before you sign any papers or make deposits. Ask your attorney to carry out a search and verify land condition before purchase transaction negotiations start. Once a seller accepts your offer, his or her lawyer will draw up a purchase agreement that includes this like party paying legal fees, taxes and transfer fees.
Upon signing the agreement, a 10 percent deposit is required. The payments you make are non-refundable unless the seller backs out, in which case he has to pay back double the amount received for damages. Closing the transactions takes about 60 days and less. This period includes the settlement of balance and exchanging contracts. Once complete, the title deed is submitted to the Land Department for government duties registration and payment. And you are the proud owner of land in Thailand.