We have mentioned in previous articles the “extremely limited and exceptional circumstances” by which a foreigner could legally buy land or landed property in Thailand.
These are the exceptions:
Section 96 of The Land Code Act – Making a Prescribed Investment
Under Section 96 of the Land Code Act, a foreigner may apply to own up to 1,600 m2 (1 Rai) of land if they make a Prescribed Investment of not less than THB 40 million in bonds of either the Thai Government, the Bank of Thailand, a State Enterprise or bonds of which the Ministry of Finance secures the capital or interest.
It is also possibly to make the same application for land ownership if the THB 40 million is invested in the share capital of a juristic person who is granted investment promotion under the relevant investment promotion law.
The ownership grant is subject to the Prescribed Investment remaining in place for a continuous period of not less than five years as from the date of registration of ownership of the Land.
Section 96 offers a real and absolute path to ownership for anyone who can afford it. There are exquisite villas in Phuket which sell for as much as THB 400 million, and some of these are bought (or even leased) by foreigners.
Any foreigner considering a property in this price range may be best served by investing THB 40 million into Thai Government Bonds, then spending the balance on a villa.
The Board of Investment (BOI) – The Investment Promotion Act
A similar path to ownership is through The Board of Investment (BOI). The BOI was established in 1997 to assist with, and provide incentives for, investment in Thailand. These are primarily tax privileges, and certain exemptions on foreign ownership of companies.
Although these incentives are also available to Thai nationals, foreigners who wish to invest and promote a business in Thailand are granted certain privileges, which may include permission to own land.
The relevant law supporting this program is the Investment Promotion Act, which may “grant promotion” to companies which are substantially beneficial to Thailand and its economy. In addition to the amount of capital invested, criteria for qualification require a company to be economically and technologically sound, and not undertake any business which is harmful to the environment.
These are business incentives, so if the “promoted person” (which is the business, not the foreigner) dissolves the promoted activity or transfers it to another person, the incentives no longer apply.
If the promoted person has acquired land, the land must be disposed of. If the company does not sell the land within 1 year, the Director General of the Land Department shall have the power to dispose of it under the Land Code.
While the company will be the “promoted person,” and therefore the owner of the land, the foreigner may control the Thai company under the BOI scheme. This foreign ownership of the company is not possible with a standard Thai Company Limited. And because the foreigner controls the company, they also control the assets of the company.
For a foreigner who wishes to own land in Thailand, both the Prescribed Investment and the BOI’s Investment Promotion Act are ideal ways to achieve this.
As long as the foreigner has the resources to take advantage of these programs, they are legitimate routes to freehold land ownership.
We suggest that any application for either of the above be done through a competent Thai lawyer.
This is an excerpt from the Thai Residential Phuket Property Guide 2019/20. To download your free copy, please click here:
Please see our other related Phuket real estate articles: