Foreign Land Ownership in Thailand
In 2022 Thailand counted approximately 3.6 million migrants in Thailand, or around 5.2% of the total Thai population. Thailand has been an exciting country to live in for decades as it allows many westerners to enjoy the luxuries of life at lower costs than in their home country. But it doesn’t come without complications. Because if you want to buy property in Thailand, one is highly limited to what is legally possible to own as a foreign national. And since resident permits are not something often practiced in Thailand, foreign nationals always have to accept the risk of moving in between gray zones.
Although the vast majority of foreigners in Thailand are workers from neighboring countries such as Myanmar, Vietnam, Cambodia and Laos, Thailand also has a large population of skilled workers and retirees from the Americas, Europe and Australia. Switzerland being a small country in Europe boasts a total of over 9300 expatriates living in Thailand, whereas Great Britain counts around 41,000 people in Thailand as of 2022. But where do these expatriates live and what are they legally allowed to own?
Legally, foreigners are not allowed to own assets, including companies, with a shareholding over 49%, which limits options of residences drastically. Even condominium projects need to abide by this law and assure only 49% of all units are owned by foreign nationals, creating a big challenge for developers of luxury projects. But what about houses and all the foreigners in those beautiful beach villas? How can they own these houses?
The short answer to that question is they can’t. End of the story. There is no legal way for a foreigner to own a house, which means literally every foreigner who “owns” a house on a plot of land in Thailand, does not legally have the right to that house. Why? Because when building a house, the house has to be registered with the land title deed filed at the corresponding land office. And since foreigners are not allowed to own land, they are also not able to claim ownership of the house sitting on that land. But still, how do foreigners tackle this as of now?
Right now, most foreign nationals wishing to buy a house in Thailand would do so through a Thai registered company. But just like anything else, companies too, cannot be owned by foreigners to more than 49%. Which means a proxy such as a lawyer or a notary public is usually assigned to hold the remaining 51% of shares in their name. This in essence means, every foreign national “owning” a house in Thailand has no legal right to claim this house hers or his, leaving them exposed to huge financial risk.
Let’s imagine for a moment this risk is eliminated by allowing foreign nationals to own a limited amount of land, or a company, in Thailand. How would this impact the Thai real estate market? Deputy Minister of Interior Niphon Boonyamanee thinks it would positively stimulate the Thai real estate market and the overall economy as it reduces the financial risk of investors.
If the bill makes it through the Cabinet it would allow “elderly”, “experts” and “high-status” foreigners to own land up to 1 rai or 1600 sq.m. How “elderly”, “experts” and “high-status” would be classified in the law is currently unknown.
However, this is not the first time foreign land ownership has been considered in Thailand. In 2003 when Thailand Elite was first launched, it was communicated that foreign land ownership would be part of the benefits of owning Thailand Elite status. This claim was later rejected and no benefits of that sort were legally introduced.
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