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Frequently Asked Questions

Frequently Asked Questions

Can a foreigner buy land in Thailand in his own name for residential purposes?


Pursuant to the Land Code B.E. 2497 (1954), foreign individuals and foreign-owned companies are not allowed to own land; unless an exception to the general rule applies. Most exceptions concern the purchase of land for industrial use through promotion such a BOI.

A foreigner will only be allowed to own land freehold for residential purpose in the following case. A Foreigner who has invested over 40 million Baht in Thailand can own up to 1 rai of land for residential purpose if he fulfilled the requirements as follow: to bring at least a forty-million Baht investment into Thailand (not including the amount invested into the purchase of the land) being specified that said 40 million Baht must be used for an investment that benefits Thai economy, promotes social welfare, or is a business promoted by the BOI and the money must be invested in Thailand for a minimum of 3 years.

If those conditions are fulfilled then the foreign investor can purchase in freehold up to 1 rai of land (1,600 SQM) in a designated area such as in Bangkok and Pattaya, municipal areas of all provinces, and areas designated as residential under the City Planning Act.


How is land measured and how are prices expressed?


In Thailand, Land is measured in Rai, Ngan, and Wah.

1 Rai       = 1600 Sqm or 4 Ngan

1 Ngan  = 400 Sqm or 100 Square Wah

1 Square Wah    = 4 Sqm

The size of houses and/or condominiums is expressed in Useful Area. Useful Area includes all usable areas of a building including the terrace (it is different from living area). Land prices are expressed in Baht per Rai or Baht per Square Wah while condominium prices are in Baht per Sqm.

How are rights on land evidenced?


There are several types of titles or documents that can evidence rights (ownership or possessor rights) on land in Thailand. Only the three Land Titles mentioned below are considered safe to purchase:

“Chanote” or “Nor Sor See”    = Freehold Title Deed

“Nor Sor Sam Gor”    = Confirmed Certificate of Land Use

“Nor Sor Sam”    = Certificate of Land Use

“Chanote” or “Nor Sor See”:

Is a Freehold Title Deed that is based on a geometrical accurate survey of the land made by the Land Department which exact boundaries are marked by concrete plot markers. It contains a description and a map of the land, including the area, boundaries, and marking posts, and a history of all registered transactions concerning the land; grants to its own full right of ownership on the land.

Currently “Chanotes” are available in Bangkok, provincial city, and the most developed areas of provinces. Progressively, “Chanotes” shall be available in all of Thailand. A “Chanote” title is printed on yellow paper of rectangular form and is recognizable by the red Garuda (emblem) on the top center of the title.

The “Nor Sor Sam Gor” or Certified Certificate of use

A Nor Sor Sam Gor certifies that the person named has the right to use the land; the right of this person has been confirmed by the Authority; all requirements including the geometrical survey by the Land Department for the issuance of a Chanote Title Deed have been met; and the owner is entitled to apply for an upgrade for a Chanote; however, providing that such option is open in the concerned area.

The “Nor Sor Sam” or Certificate of Use

The differences between a “Nor Sor Sam” and a “Nor Sor Sam Gor” are as follows: the Nor Sor Sam is not delimited by a survey and there are no markers to designate land boundaries. Therefore, any person purchasing a Nor Sor Sam is advised to have a survey of the land made by an official land surveyor prior to the purchase.

The difference between the size of the land as indicated in the Nor Sor Sam and actual size can be more than 10-20%. Note also that a one-month delay is needed for publication purpose for any formalities such as the transfer or the registration of rights or charges of any sorts on a Nor Sor Sam title.

Issues common to “Chanote”, “Nor Sor Sam Gor” and “Nor Sor Sam”

They are all issued in several original duplicates; one for the Land Department and one for the owner of the Land. Mortgages, Long Term Leases, Right of Superficies, and Charges can be registered on any of them. All the subsequent changes to a title deed such as transfers, mortgages, servitudes, charges and so on are registered on the back page of the Land Title to one exception; buildings.

Buildings do not appear on Land Titles as Land Titles only serve to evidence rights on land to the exclusion of the buildings built on the Land. They are no specific titles to represent the ownership of a building. When transferring land on which a building is located, mention of the transfer of the ownership of the building will be made on the sale and purchase agreement attached to the “Chanote” or “Nor Sor Sam Gor” or “Nor Sor Sam”.


What rights may a foreigner safely acquire on Land?


Thai Laws do allow foreigners to acquire several kinds of right on land such as lease rights, right of superficies, right of usufruct, and mortgage. Furthermore, foreigners are allowed to own buildings.

Therefore, the best option for the foreigner that wishes to purchase a residence in Thailand is either to execute: a long term lease agreement; or a right of superficies because both leasehold and right of superficies may be used to create a separate right of ownership of the land and of the structure built upon the land. In other words, a foreign buyer purchasing a residence under a leasehold or a right of superficies can be granted the right to own the house or building built upon the land plot on which he/she has been granted an exclusive right of use and possession of the land on which said the building is built.

May a foreign citizen own a building?


Thai laws do not restrict foreigners to own the building owned upon the land. As a consequence, foreigners that lease or register a right of superficies on raw land may apply for a construction permit under their own name (if they have an address in Thailand) and may legally any building, houses or structure built on land. Once the construction of the building or the house is completed they might also apply and obtain a House Registration Certificate (TABIEN BAN) under their own names. “Yellow Book” (Thor.Ror.13). Note that in Thailand there are no specific titles to represent the ownership of a building and that contrary to popular belief the “Tabien Baan” is not a proof of ownership of a building.

What is the best option for a foreigner who wants to purchase a house in Thailand?


Currently, the best option for a foreign citizen that which to purchase a house in Thailand is to profit from the fact that Thai Laws allow foreigners to register long-term rights of possession, use or occupancy on a land (lease agreement or right of superficies) and to personally own their house.

Purchase under a leasehold or right of superficies is completely legal and without hassle, and it is secure because if the need arise the foreign buyer will have no problem to request the protection of Thai Courts if the need arises;

It is more and more available because most of the developers targeting foreign buyers offer this kind of option but look for professional advice to check the arrangements taken by the developer in relation to the renewal of the agreement.

For the time being, foreign buyers should not consider the option of freehold ownership through the incorporation of a Thai limited company. Not only is this technically illegal; but the limited company is not a convenient tool for the ownership of land and house for residential purpose. Indeed, Thailand does not have legal vehicles specially tailored for the ownership of real estate assets. Now according to the Revenue Department whoever set up a company do it for the purpose of making profits and as a consequence, the Revenue Department expects that at some point in time any companies must make profits.

In other words, at some point in time a landowner company even if its only activity is to own a house and land for the residential purpose will have to pay corporate taxes in addition to property taxes. Furthermore, a limited company needs to be maintained to generate lawyer, accountant, and auditor expenses. Therefore, a foreigner that only wants to buy a property for the residential purpose should choose the leasehold or right of superficies option.

How does a foreigner form a Thai company?


The process to form a private limited company include: the registration of the company name the registration of a Memorandum of Association (Articles of Incorporation) and the registration of business objectives the registration of Articles of Association (By-laws) the registration of an Affidavit. Then within 60 days of its incorporation, the company must apply for a corporate tax id and once the company has a turnover of more than 1,800,000 THB per year for the VAT.

Can a foreigner own a 100 % freehold condominium in Thailand?


One of the easiest ways for a foreign citizen to own a real estate asset in Thailand is to take advantage of the fact that Thai laws allow foreigners to own condominium freehold. A condominium is defined as “a building that can have its separate portions sold to individuals or groups for personal property ownership”

The area of a condominium building is divided into two distinct areas, the private area that is to say flat units that are represented by condominium units titles deeds which can be privately own and the common area that is to say the facilities, utilities, and the land on which the condominium is built. The Common Area shall become the property of the Juristic Condominium person.

Each owner of a condominium unit shall receive a percentage of ownership in the juristic person according to the size of his/her condominium unit. This is because the juristic person also owns the land on which the condominium building has erected the ratio of foreign ownership is limited to 49% of the total private area in a condominium building at any one time. Therefore, prior to selecting a condominium, a foreign buyer shall first check with the Juristic Person what the current foreign ownership ratio is in a said condominium. Generally, in Bangkok, this rule does not pose any problems. In beach resorts, there are often more foreign buyers than there are units available for foreign buyers.

To be eligible to purchase a condominium, a foreign buyer must be able to enter Thailand legally and present proof to the Land Department that the funds used for the purchase of the condominium have been remitted from overseas in foreign currency. Without such proof, the Land Department will not permit the transfer of ownership to the foreign buyer.

The foreign currency must be brought and be exchanged in Thailand. Purchase of Thai Baht on the International market would not qualify in this regard. The money must either come from a bank account in the name of the foreign buyer; or be transferred to a bank account on the name of the foreign buyer. The name of the buyer must appear at one end of the transaction or the other. The minimum of foreign currency to be brought by a foreigner to be eligible to condominium freehold ownership must be at least equivalent to the purchasing price of the condominium. For a proof purpose, it is better to make the transfer of a minimum of US$ 10,000 per transfer.

A foreign investor purchasing a condominium through the use of a 100% foreign own company should be aware of one drawback. While under the Condominium Law, a foreign company can legally own one or several condominium units but under the Foreign Business Act renting said condominium units is considered a service business under the Foreign Business Act. Therefore, prior to starting renting out the condominium units, the foreign company should apply for a Foreign Business License. Now, the catch is that the Business Department seems not to be willing to grant foreign business licenses for the leasing of property because this activity does not bring a technological transfer. The paradox is that a foreign company could legally purchase several condominium units in freehold but then could face the risk of breaching the act when renting out the said properties.

May a Thai wife of a foreign national own a land?


As an effect of the enactment of the Constitution of 1999, a Ministerial regulation has been enacted that allows Thai women married to foreigners to have the right to purchase land, but the Thai spouse must prove that the money used in the purchase of freehold land is legally and solely hers. For this purpose, the foreign spouse must sign a declaration stating that the funds used for the purchase of property belonged to the Thai spouse prior to the marriage and that he has no claim to it.

In fine this means that if the money used for the purchase of the land was the Thai Spouse money before the wedding then the land purchased with this money is not common property of the spouses but exclusive property of the Thai spouse and the foreign spouse shall have no right on the land in case of divorce or death of the Thai Spouse. However, the foreign spouse could have other rights such as registered leasehold on the land.

May a Thai minor child of a foreign national own land?


A Thai minor born from a foreign parent can acquire land providing that the land acquisition is not done for the purpose to circumvent or evade the law. If a person wishes to give a piece of land to a Thai foreign-born minor as a gift then the authority shall inquire into his/her intention to give the gift to the minor and into his/her legal relations with the minor. If the property to be given as a gift is acquired by purchasing, it must be determined out of whose money the acquisition is made.

To transfer land to a minor child has several drawbacks. The main drawback is that the power of the child parents to use the land will be severely restricted. Pursuant to Section 1574 of the TCCC, a person exercising parental power: “Cannot enter into any of the following juristic acts with regard to the immovable property of the minor, except with the permission of the Court.”

Acts that cannot be done without the Court permission are: selling, exchanging, selling with the right of redemption, letting out property on hire purchase, mortgaging, releasing mortgage to the mortgagor or transferring the right of the mortgage on the immovable property or on mortgageable movable property. Extinguishing the whole or a part of real rights of the minor on immovable property. Creating servitude, right of inhabitation, right of superficies, usufruct or any charges on immovable property; disposing of the whole or a part of the claim the purpose of which is to create real rights on immovable property or on mortgageable property, or the claim of which the purpose is to have a real right on such property of the minor relieved; and letting immovable property for more than 3 years.

Can a Thai major child of a foreign national own land?


Yes, he/she can own or acquire land and no special inquiry applies in the case of a Thai/foreign-born major.

What is a Foreign Exchange Transaction Form?


The form issued by a bank certifying the existence of a foreign exchange transaction

Can a foreigner secure a Mortgage Loan?


Normally non-resident foreigners are not allowed to apply for a loan with Thai Banks.

What do property costs average on a purchase?


Normal rates are as follows:

Special Business Tax 3.3% (applicable in case of resale during the first 5 years of ownership)

Transfer Fees = 2% of the assessed value on property transfer and 1% of the rental value on 30 years for lease registration

Who pays costs the purchase costs on a transaction?


The parties are free to negotiate who paid the costs at the time of the purchase.

Is there a property tax?


Yes, the property tax is currently 12.5% of a property yearly assessed rental value. Tax is not due if the individual owner lives himself in the property.

If a foreigner wants to purchase a business, how does he get started?


You need to do due diligence to check the accuracy of the legal and accounting information.

How many shareholders are required under Thai Law?


You need a minimum of seven shareholders to set up a company in Thailand. The number of seven shareholders must be maintained for the duration of the company.

A company that exercises a business activity which is not prohibited to foreigners or which is not restricted do not need to have Thai shareholder. Most manufacturing activities can be 100% foreign owned. A company which receives a foreign business license to exercise a business activity listed under List 3 of the Foreign Business Act, who received a BOI promotion can be 100% foreign-owned as well. A company that received a foreign business license to exercise a business under List 2 of the Foreign Business Act needs between 25 to 40% of Thai Shareholders.

A Thai company which exercises an activity restricted or prohibited under the Foreign Business Act and do not have a BOI or a Foreign Business License needs 1 Thai shareholder holding 51% of the paid up capital. A company that own land needs to have 51% of Thai Shareholders holding together 51% of the shares.

What is the maximum number of shares a foreigner can own in a Thai Limited Company?


When incorporating a Thai Company a foreigner can hold up to 49% of the shares. If a foreigner holds only 39% of the shares or less and is not an authorized director at the time of the company incorporation there is no disclosure requirement of the fortune of the Thai Shareholders. If at the time of incorporation the foreigner holds more than 39% or is an authorized director then the Thai Shareholders have to disclose their financial information such as bank statements, source and income and so on. The requirement is applicable at the time of incorporation.

How can the right of a minority shareholder be guaranteed?


There are mechanisms that can permit a minority shareholder to have a right of control over the company or the company assets. For more information, please contact a lawyer.

What is the income tax rate in Thailand?


They are several rates applicable. The normal tax rate for Juristic Companies or Partnerships (Branch, Agent, Joint Venture, PE), is 30 % of the net profit at the Company Level and 10% of withholding tax at the shareholder level.

Now they are several other rates that apply to the resident (locally) incorporated companies and registered partnerships.

Resident SME that is to say companies that have a paid-up capital and not more than THB 5 million as at the fiscal year-end (regardless of their revenue or assets) will pay corporate income tax at a progressive rate from 15% to 30%. The rate of 15% applies on the first million baht of profits. The rate of 25% applies to the net profit in excess of 1 million up to 3 million baht. Profits in excess of 3,000,000 baht are taxed at the normal rate of 30%. Overall, these measures bring a 250,000 THB tax saving on the first 3,000,000 THB profits.


Are payments by a Thai juristic person to a foreign juristic person subject to any Thai income tax?


Pursuant to the Thai Revenue Code, there is a 10% withholding tax on dividends paid by a Company or any other juristic person to any individual or a corporate payee overseas; a 15% withholding tax on interest, professional and other service fees, profit on sale of shares (in Thailand), rent and royalties paid by any payer to any company, juristic partnership or other juristic person registered under foreign law and not carrying on business in Thailand and a 5% withholding tax on payment made overseas for hire of work.

The rates of withholding taxes mentioned below are the rate prescribed by the Thai Revenue Code and shall apply only if there is no Double Taxation Agreement. If there is Tax Treaty then reference should be made to the said Treaty for possible tax reduction and/or exemption. Thailand has concluded Double Tax Treaties with 52 countries. Most treaties are based on OCDE models.

Is there a specific capital gains tax in Thailand?


Capital gains are taxed at the Corporate Income Tax or Personal Income Tax level. Other taxes include also the Special Business Taxes, which is applicable to specific businesses (Banking & similar business, Securities & credit agency, Life insurance, Pawnbroking, Trading in immovable property) which are not subject to VAT. Rates are between 2.75% and 3.3%. Property Taxes, which is applicable on the property such as houses, buildings, any structures and connected land which is used for constructing houses, house and land; and which rate is 12.5% of the annual rental amount or equivalent. This tax is currently being reviewed.

They are also signboard tax and duty stamps.

Is there a sales tax in Thailand?


VAT Rate of 7%: VAT on Sale of goods or services rendered in Thailand and on Import of goods are currently at 7%. Note that the actual VAT rate is 10%. This is one of the remaining measures that were adopted by the Government following the 1997 crisis. The 7% rate is renewed year by year by the Government

VAT Rate of 0%: the VAT rate is at 0% for the following transactions: Export of goods; provision of services performed in Thailand and used in a foreign country; provision of international transport services by aircraft or sea-going vessel; sale of goods and provision of services to the authorities or state enterprise under a foreign loan or assistance project; sale of goods and provision of services to the United Nations Organization; sale of goods and provision of services between one bonded warehouse and another.

VAT Exemption: are exempted from the VAT the sale of goods which is not an expert, or provision of services under Section 81 (1) which includes sale of agricultural produce, animal and animal, feeds, fertilizer, chemical products for eradicating weeds, sale of newspaper, inland transport service, rental of immovable property. Are also exempted from the VAT the import of goods under Section 81 (2) such as a sale of agricultural produce, animal and animal feeds, fertilizer, chemical products for eradicating weeds, a sale of the newspaper, etc. Finally, are exempted from the VAT Small business where the tax base does not exceed 1,800,000 Baht.

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