Purchasing a property in Thailand
A non-Thai can own a building but not more than 49% of the land that the building occupies.
There are 3 ways for a non-Thai to purchase a property in Thailand, they are:
1. Condominium purchase – A building that has a Condominium license can sell no more than 49% of its units to non-Thais, the remainder would have to be retained by either Thai persons or Thai entities. Having said that the remaining 51% can be leased to non-Thais or sold to non-Thais via Thai Ltd Companies (please see below)
2. Freehold purchase: By far the most common purchase method of land or villas in Koh Samui is a freehold purchase via a Thai Ltd Company. This works as follows:
You would set up a Thai Ltd Company, in that company you would be the sole director (unless you wanted to put another person in) and would make all executive decisions within that company. You would have a shareholding of no more than 49% (depending on yours lawyer). You would also have 1 or 2 Thai shareholders who would between them own no less than 51% of the shares. (The lawyer would normally supply the Thai shareholders unless otherwise instructed).
The company would be structured in such a way that you are fully protected throughout the ownership of the company and for when you re-sell the company/villa in the future.
If you wanted you could own the building directly in your own name and just have the land held in the company then lease the land back to your name for 30 years for a nominal fee.
3. Leasehold purchase – In Thailand a residential property can only be registered for a maximum of 30 years at a time. Some sellers offer 2 x 30 year extensions which would effectively give you 90 years. This however does pose potential problems in the case that the lessor refuses to extend the 2 x 30 year periods as agreed. How good is a 30 year promise/contract? There are some scenarios whereby an extendable leasehold can give more security (for example, a secure leasehold where the owners control the lease extensions) but it is best to look at these case by case and with the advice of your chosen lawyer.
Of course the above is only for guidance and should not be regarded as a substitute for professional legal advice.
