Rights of Foreign Ownership
Since I started working with real estate publications I am often asked by foreign nationals to explain how they can safely buy or own land and property in Thailand.
Here I will explain briefly how the system works but again I am not a lawyer and my advice should be thought over and considered but please seek a legal professional in this field who will clarify the implications and responsibilities of the Thai Legal system for land ownership.
Leasehold
A foreigner can own land through a registered lease or by having a company which he controls purchase the land. There is no way a foreigner can own land outright.
Both methods are safe if they are properly set up by legal professionals and this is the most important consideration that I emphasize to you.
Leaseholds are safe and quite uncomplicated in which the land or land with house is leased for a certain amount of years normally a 30 year leasehold with appropriate extensions and this is all registered with the local land office. This method is preferred by some due to its simplicity and especially as there is no requirement for a company set up.
Freehold Control
But again others would prefer to actually set up a Thai company whereby the Thai company owns the land. The owner would only have 49% of the company shares but the land code of Thailand along with the foreign business act does not prohibit foreign control. Here the correct and proper legal structure must be followed to retain effective control over a Thai majority owned company whilst at the same time avoiding anti-agency and anti-nominee provisions. Here the most important part of the company structure set up is to create a preferential share system that although the foreign national only has 49% of the company shares his shares are preferential shares giving him complete and safe legal control over the company. Ownership and running a Thai company does though have certain responsibilities and tax implications so let these and the complete structure be explained to you in a language you understand by a legal professional.
Owning a piece of land in Thailand can be a beautiful and certainly rewarding experience (both financially and lifestyle wise) but whatever you do consult advice from a professional and then you as myself will have a lovely home with secure and safe assets.
Visas & Work Permits
I have recently been asked to clarify the way the Thai system works with visas and work permits if you are opening a company here and would like to have a work permit.
Firstly I must point out that each Thai province does follow slightly different guidelines and my information does in no way substitute you actually having a legal consultation with a reputable lawyers company if you actually intend to work.
There are those that believe the little they would do in realty would make a work permit hardly worth the trouble. This is a big mistake and one that could cost you more problems than you would believe. The Thai Immigration take cases of foreigners working without a work permit very seriously and the penalties are harsh. If you are here on a tourist visa you can not in any way participate in a job.
So let’s have a look at what’s actually required to apply for a work permit. Firstly you need to have a business class visa which in most cases will have to be applied for at a Thai Consulate outside of Thailand. For the application you will need copies of the company papers of the company that will actually employ you. Letters of sponsorship are required from the company explaining your job position and length of service etc. Even if you are the Companies MD these documents must be filled in before you get to the consulate and must be 100% complete. In nearly all the cases I have worked together with the Thai Consulate usually requires something extra such as company tax receipts or just one piece of paper you don’t have so it is my advice again to use the services of a reputable company that has system and procedure of getting this paperwork together. Then if something is missing it is only a quick fax and your journey was not for nothing.
Once back in Thailand again it is a large pile of paperwork that needs to be correct before the application is sent to the Suratthani Labour Department. This includes photographs of you and the workplace, medical health certificates, company papers and even a map of the company location. The list goes on and I can only say again the fee a legal company would charge for this service is well worth it for your time and stress levels.
Every country has their procedures for legal applications and Thailand is certainly no different. Just because the Thais seem very much laid back on Samui does in no way reflect on the order that will need to be followed for any formal legal requests.
Land Title Deeds in Thailand
There are two main types of land ownership in Thailand which we should explain.
Rights of Possession.
Firstly we have the right of possession for example land that has been used by a family for generations to the benefit of the land and they have possession rights of the land under the civil and commercial code. Such titles are Sor Kor 1, Tor Bor 5 , 6 or Sor Por Gor 4. These titles basically are only family possession rights and generally only used for farming. These titles can not be bought or sold and no building rights or legal acts would be allowed on the land. I do know of cases where families being in procession of certain pieces of land for generations have been able to upgrade it to regular land title deeds but this is not generally the case and any serious investor would not normally give any credibility to these titles of possession.
Rights of Ownership.
Usually we are looking for land title deeds giving right of ownership not procession. Here we have basically three title deeds. Channote, Nor Sor 3 and Nor Sor 3 Gor. The most sought after titles are the Channote and the Nor Sor 3 Gor as both these titles have legal documents of rights of ownership can be sub-divided into smaller plots and building permission and any such legal acts can be carried out immediately on the land. The only difference with the Nor Sor 3 is that although legal documents are issued for the land it has not been accurately surveyed which can lead to problems in verifying actual land area. And if any legal acts are to take place on this land it must be published for at least 30 days.
But as we have been saying all the way through if it is not clear 100% seek the advice of a legal professional in this field. As there are also many other things that are important to consider such as servitude, access and rights of way.
Land Measurement
Land in Thailand is measured in Rai, Ngan, and Talang Wah.
- 1 Ngan = 100 Wah or 400 sqm
- 4 Ngan = 1 Rai or 1600 sqm In comparison to Western Standards.
