| Even though foreigners are legally banned from owning land in Thailand in there name, there are proven and effective ways in which you are able to hold land while complying with Thai laws.
Thai Limited Company
The most popular structure of land purchase, popular with foreign investors is through a limited liability company. In Thailand, a limited company is considered a Thai Juristic Entity, and can own land and property. The foreigner can own a limit of 39% of the company shares at the time of land transfer, once the company holds the land the foreign share hold can be increased to 49%. You can also legally organize to be the only director of the company who can commit or bind the company in any contractual dealings. This successfully allows the buyer to have complete and secure control of the company and its assets.
Lease Option
One more form of land holding for foreigners is through a Leasehold Agreement. These are commonly written up as 30 year leases with two further prepaid 30 year renewals for a total of 90 years. The lease will include clauses that automatically allow freehold ownership if Thai law ever changes to allow foreign ownership, and the right to sell, sublet, or transfer the lease agreement. This makes Leasehold purchase in actual fact ownership.
Tax & Fees
You should also be aware that on all transfer of property in Thailand there is a stamp duty, of 0.5%, a transfer fee of 0.01% and a business tax of 0.11% levied against an owner who has been in registered possession of the property less than 5 years, and income tax. There is no capital gains tax in Thailand, unlike many other countries, and Income Tax (usually between 1.0 - 3.0%) on property is the comparable replacement. There are no set rules on who pays the income tax, and it is just a part of the negotiating process, as with all the other costs of the transfer of ownership.
Condominium Purchase
Purchasing a condominium is perhaps the most convenient option offered to foreign nationals. There are limitations on the purchase of a condominium because the percentage of individual units in a complex sold to foreign people must be forty nine percent (49%) or less in any condominium complex. The funds used to purchase the condominium have to be transferred from out of the country and must be documented by a financial instate in Thailand. This is done with a Foreign Currency Transaction Form. In order to receive a Foreign Currency Transaction Form you will need to open bank account in the name that the condominium will be registered. Then follow the procedure of transferring funds to your account in Thailand. This allows the bank to document the transfer of funds. At the time of transfer the new owner of the condominium is issued with a certificate of unit ownership (Chanood). The certificate also documents exactly what rights each owner has to the common areas of the condominium. At the time of transfer the purchaser can feel at ease due to the fact that no transfer can be completed until all outstanding debts or bills that the previous owner has acquired are cleared 100%.
IMPORTANT NOTE: The laws covering company formations and investment in property by foreigners have changed, so please contact us for more information on how to keep your investment safe.
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