Property Buying Guide
Akando Real Estate specialises in properties in Thailand and the region as far north as Chiang Rai to as far south as Phuket. We have assisted clients with both purchasing investment properties and rental management and also many developers with acquiring land and larger real estate assets for both Thai and foreign nationals. The laws in Thailand generally prevent foreign nationals from owning land; however there are many legal ways to own a property whether it is a condominium or the physical property structure. While we can offer some general guidance on ownership we would also recommend clients contact us to discuss the various options, as there are many different ways to secure your asset so it is legally held, easy to manage and resalable in the future. Below, we have put together some general rules about property ownership for you initial information:
Akando has a huge portfolio of condominiums and apartments for Sale and Rental available in Bangkok and the region. Condominiums offer foreign buyers complete security of purchase due to the Condominiums Act which allow foreigners to own as many as 49% of the condominiums on a Freehold title with the percentage being calculated relative to the total saleable floor area of the development, the only condition being they must register the remitted foreign currency into Thailand and declaring that such funds are for the purchase of the unit. Currently the remaining 51% of the development can only be sold to Thai owners who can then grant leasehold title to foreign owners should they so wish. Leasehold Condominium’s when sold are generally transferred and assigned clearly as leasehold purchases. At Akando we keep comprehensive records for each condominium on our books along with available Freehold and leasehold allocations. If you should require any assistance on how to register your capital in the purchase of a property please do not hesitate to contact us. View Condominiums Act here
Leases the most popular form of property sales to foreign entities:
They are currently limited to a maximum initial period of 30 years with holdings being registered at the land office in the personal name or foreign company name of the purchaser. Many developers structure this by setting up offshore companies to hold the leasehold structure in order to make resale opportunities simple and easy to transact while also adding a further level of security to the holding. Within the original lease there is normally a renewal clause to allow for the lease to be extended by an additional 30 years on the expiry of the original term. However there also needs to be an agreed premium for the extension or it may be deem illegal and not legally enforceable without such premium. We recommend that all purchasers should seek good advice in order to check all the lease documents and ensure the lease renewal and termination clauses are appropriate and watertight. It is also recommended to check the corporate structure of the land holding vehicle in which the lease is based to ensure complete and satisfactory due diligence has been carried out to protect you asset. Akando has many years experience in this area and is always happy to assist on any questions or issues you might have.
Foreigners can have full ownership of buildings/ structures or improvements built on land that they have leased. The most common way foreigners secure private villas and other property assets is by leasing the land element and owning outright the structure built upon it. Foreigners are not allowed to own land directly or through a Thai nominee or Thai company structure with nominee shareholders and although this has also been very common practice in the past the Thai government has highlighted this particular practice to be given special attention by the authorities with such nominees found guilty of this to be prosecuted and their assets confiscated.
Thai companies are almost identical to foreign companies requiring at least 3 shareholders. Of these 3 shareholders the majority of the holdings and voting rights must be Thai owned to enable such a company to own land in Thailand. Also the Thai shareholders cannot under any circumstances be seen as “nominees”. To ensure this the authorities will expect the Thai company to be trading and to pay company tax and show proof of the Thai shareholders monetary investment in the company and where such monies originated. The control of the company is normally exercised via the quorum threshold rather than "ordinary" or "preference" shares. Therefore it is possible, but potentially risky to hold a property asset via a Thai company. Please contact us if you would like more information about this but we do strongly recommend the leasing or outright Freehold Condominium purchase over this choice due to cost effectiveness and transparency when it comes to resale or dispute.
Title due diligence:
Thai land titles do not offer any warranty on such land titles & documents. Therefore it is essential for a purchaser to ensure they carry out proper due diligence on any purchase in Thailand regardless of whether you are purchasing leasehold, freehold or by Thai corporate structured title. Be it an apartment, Villa or individual project or land stock as the law does not guarantee or warrant land titles. There are many types of land title and complicated environmental zoning so we would recommend foreign national’s only buy land on developments issued with Chanote (freehold) or Nor Saw Sam Gor (upgraded certificate of use) land title. With a thorough due diligence by a competent law firm, foreigners should have no title issues with their property as land title documents once verified with the land department are rarely disputed. Land areas are indicated on the land title documents in numbers of “Rai” rather than acres or square meters. An ‘acre’ equals 2.4 Rai; and a Rai equals 1600 sq meters or 400 ‘Talang Wa’ (a unit of a rai).You can convert here.
Living in Thailand:
Short term visits to Thailand of less than six weeks will be given a 6 week tourist visa on entry from most foreign countries. You can also obtain 6 months multiple entry tourist visas by applying for a visa at a Thai embassy outside Thailand in advance of your stay; however as long as you do not overstay on your 6 week visa you can simply leave and reenter as many times as you like in any given year. Persons over 50 years of age are entitled to apply for a Retirement Visa, which is generally renewed on an annual basis. Business and Dependant Visas are also available and can be applied for in your home country.
Working in Thailand:
To work in Thailand you will need a work permit and a specific Type II non-immigrant visa which must be applied for prior to entry into the country. You will also need supporting documentation from your company sponsor to obtain your visa and subsequent work permit.
If you are looking to invest in Thailand or establish a business we would recommend you contact us for a reference company to assist you with acquiring all the necessary documentation.
Useful links & Contacts:
RSMthailand: International accountancy & law firm that we highly recommend for foreign investors in Thailand, they have a network of offices worldwide and offer clients a full one stop shop for all accounting legal, administrative and recruitment services.
Tilleke & Gibbins: One of the longest established law firms in Thailand with regional offices throughout Thailand. We have used their services many times and can highly recommend their due diligence and legal services.