Purchasing property in Thailand as a foreigner

Introduction

Thailand has always protected its own country and land, for example by not allowing foreigners to purchase real estate property with majority. It is not very different from lots of other countries around the world but as foreigner we just often don’t realize it because we don’t have to worry about it when we are purchasing property in our home country.
Fact is, for all the procedures listed below foreigners cannot own more than 49% of any kind of real estate they want to purchase. However, there are legal ways to purchasing real estate property in Thailand, loopholes made by the government partly to have money flowing into the country and to make Thailand competitive on the world market. There are differences in the recommended procedures as outlined below on how to purchase property in Thailand. Please note that this document does not constitute legal advice, no matter what property you are interested in buying you should always consult an Attorney at Law, whom you find reliable and have them study the contract first.

Step by step for buying property

Case 1 – Buying a condominium unit under foreign quota

Legally, Condominiums are the easiest to purchase as a foreigner. The Thai law related to this kind of property has been made very clear and simple since you will not be buying the land itself but only a unit or more in the building. (The land belonging to the building can only be sold with the agreement by 100% of the owners.) This means that you can purchase the condo directly from the owner and have your own name on the title deed (Exception: If you want to purchase the whole condominium complex, look under "All other property" below).
The law says that in general foreigners cannot own more than 49% of the total number of condos in a condominium complex; this percentage is called the foreign quota.

Step by step:

Having found the property you want to purchase, the procedure is straight forward. Have your attorney study the contract to see if there is anything out of the ordinary. If you want to make any changes to the condominium unit or deal, make sure it is written in the contract before signing it. An oral agreement is of no value.

Deposit:

Is paid on the same day as the contract is signed. When buying a condominium in a new project the deposit is often around 50,000 – 100,000 THB as a holding deposit. If it is a resale, the deposit is often up to 10% of the purchasing price.

Payments:

If it is a new project, the payment is normally done in parts starting from the day of signing the purchase contract to the day the condo is finished. If it is a resale, the full amount is often paid at one time, normally on the day of transferring the ownership by changing the owner name on the title deed at the Land Office.

Buying any other property

Any other property encompasses Land, House, or a condo in Thai name (because the foreign quota is already at 49% of the total units)
Legally foreigners only have the right to purchase property in form of a condominium (you can not own house & land) and the units under foreign ownership in the project must not exceed 49% of the total units in the project. For example, if ABC Beach Condo consists of 100 units foreigners can not own more than 49 of these units (and Thais can hence own at least 51 units). However, if the foreigner proportion of the units is fully booked to 49% like, there is still a procedure and legal way to purchase the condominium unit by using a Thai company name, in which the foreigner can only own 49% of the shares and the other 51% need to be owned by Thai persons. The most important aspect of this is that you as foreigners can be the Director(s) of the company and can have the sole power in the company no matter how many Thai people own the other shares. In Thai law, it is only the Directors who can sign deals for the company.

Below are step-by-step procedures used for transferring property to be owned in a Thai company name, which is owned by one or more foreigners.

Case 2 – The owner of the property is a Thai company

Purchasing the real estate property (e.g. a townhouse or a condominium unit under Thai quota) owned in a Thai company name with the company included in the purchase is the easiest way to become the owner of the real estate property. The property is listed as an “Asset” in the company’s balance sheet and the company name is written on the title deed of the property. When you buy the company all the Assets will be included (e.g. a condo unit). The procedure is then quick and easy;

1. The lawyer performs a due diligence on the company with a check list to ensure that the company is free from any debt including that the annual tax is paid, account update and if there is any problem with the company.
2. If everything is alright the lawyer changes the company ‘s director name to your name(s) and transfers the shares. Now you own the company and have sole power over the company and own it. Changing the director’s and shareholders’ names typically takes 3 – 4 days only. There is no need to go to the Land Office and you don’t have to pay any taxes or government fees for transferring the property (e.g. condominium unit), as there is no transfer of the asset itself. You only pay some small fees for the Attorney’s work and to the Department of Business Development for changing the names of shareholders and director(s). Buying real estate by taking over a company means that ownership and control can be transferred to you quickly.

Case 3 – The owner of the real estate is a Thai person

1. In this case you must register a Thai company with at least 3 Thai people owning the company’s shares 100%. The director should be a Thai person you can really trust – maybe your Attorney. For example you set up “Platinum Tiger Tree Company Limited” with 3 people and also 1 Director, who has got 100% power over the company. Setting up the company takes approximately 2 weeks. The first step in setting up a Thai company is to submit 3 different company names (preferably innovative and unique names) of your own choice that you give to the lawyer, who will reserve your company names on the Department’s website. The approval of the company name will take 2-3 days and the first name on your list that is approved will become the name of your company. The cost for setting up a company with 2 million baht registered capital is 30,000 baht.
2. When the company has been completely registered and the original documents received by the lawyer, the company documents will be translated into English and signed for verification and a rubber stamp with the company’s seal will be made for you.
3. You sign an agreement with the Thai Director and shareholders to guarantee that they will  transfer the power and ownership of the company to you.
4. Then the lawyer will together with the buyer and the seller transfer the ownership of the purchased property (e.g. acondominium unit) at the official local Land Office to your Thai company.
5. After the transfer of the ownership to your company has been done, the Thai director will still remain in the company for 2-3 days while the authorities are checking the company as the new owner to ensure that a foreigner does not own real estate property.
6. The name of the director shall now be changed to your name(s) to be the new Director(s) and the company shares up to 49% will be transferred to your name(s), after which you will have 100% power over the company and you are now eligible to legally own real estate property in Thailand.
7. The company’s annual reporting of balance sheet, profit and loss, taxes etc. costs about 15,000 baht per year.