Are you looking to buy an apartment, villa, or land for construction in Thailand? The process of property ownership in Thailand differs from registration in other countries.

Non-residents have the right to acquire property in full ownership – Freehold or lease and register Leasehold. The Leasehold period ranges from three to thirty years and, according to the contract, can be extended for two more periods of the same duration (Articles 538 and 540 of the Thai Civil and Commercial Code). Rights to Freehold and Leasehold properties require registration at the Provincial Land Office and are stable forms of ownership legally.

Currently, there is active construction of Condominium projects in Thailand – multi-unit complexes owned by multiple individuals. This is regulated by the Condominium Act of 2008. Buyers have the right to use all the complex’s infrastructure (swimming pool, restaurant, gym, children’s play areas, sauna, parking). Living in such complexes is comfortable and safe. The condominium management company assists owners in renting out their properties and generating additional income.

Owners of Freehold properties, according to the foreign quota of 49% of areas sold to non-residents, have the right to full ownership, disposal, and voting at condominium meetings. The remaining 51% can be “sold” to non-residents in Leasehold or to a Thai company’s ownership, in which the non-resident can be a co-owner of a maximum of 49% and a director.

Before purchasing a property, it is crucial to have the title documents verified by independent lawyers. Request copies of the Title Deed, Land Office contract, Blue book, passport/ID, or DBD certificate of the owning company from the seller.

To register Freehold ownership, it’s necessary for the funds to be transferred to Thailand from abroad with a clear purpose specified in the contract and invoice. The receiving bank accepts the payment and records it in Thai Baht.

For safety and convenience in Thailand, it is customary to make payments for real estate with secure, named bank checks. A Thai lawyer from a legal firm will conduct a legal examination of the documents for encumbrances, contact the seller’s lawyer, prepare certificates, contracts, powers of attorney, invoices for payment, bank checks, and act as a representative of the Buyer or Seller, guaranteeing the registration of the transaction at the Land Office.

After the state registration of the transaction, the lawyer will settle the payment with the Seller and hand over the registered documents to the Buyer in accordance with the terms of the contract.

The process of property transfer for a villa differs from that of an apartment due to the additional registration of land ownership rights. In practice, there are several options:

The first option is to register the villa under Freehold ownership (full ownership) in the name of a non-resident (individual or company) and the land under Leasehold (long-term lease) with the right of extension. This scheme is suitable for non-residents who do not wish to establish Thai companies. The downside is the lack of control over the lessor, who must be in good health if an individual, or if a Thai legal entity, the lessor must maintain the company’s activities and file an annual report. Risks of losing the lease rights may occur in the event of the death of the individual lessee or the liquidation of the lessor company.

The second option involves purchasing the villa under Freehold ownership in the name of a non-resident and acquiring the land in the ownership of a Thai person (a trustee or a Thai company). Subsequently, a Usufruct or Superficies contract (rights of use) can be arranged from the landowner to the non-resident, according to Article 1417 of the Thai Civil and Commercial Code.

What is Usufruct (Usufructuary Right)? It is the right to use another person’s immovable property, with the right of management, residence, and enjoyment of the “fruits” by the Usufructuary (user), with the condition of preserving the economic essence of the property. The term of the Usufruct contract can be lifelong unless otherwise specified in the contract and terminates upon the death of the Usufructuary (Article 1418 of the Thai Civil and Commercial Code). The Usufructuary has the right to transfer their right to third parties (Article 1421 of the Thai Civil and Commercial Code).

Superficies are the right to construct and use another person’s land. Compared to Usufruct, Superficies can be encumbered with a mortgage, inherited, and transferred to third parties (Article 1411 of the Thai Civil and Commercial Code). The contract term can be regulated or lifelong. The duration of the contract may be regulated or limited by the life of the owner or the Superficiary (user), as per Article 1412 of the Thai Civil and Commercial Code. The contract can specify the Superficiary’s right to demolish buildings and structures, restore the land to its original form, or sell the constructed buildings to the owner at market price (Article 1416 of the Thai Civil and Commercial Code) after the contract expires.

A more popular option is the third one. It involves acquiring a villa and land into the ownership of a Thai company as Freehold. A non-resident has the right to own a 49% stake in such a company and be a director with signing authority, according to Articles 97 and 98 of the Thai Land Code. In the event of selling the villa, one can transfer the right to 100% of the shares and the directorship or sell it as real estate. Purchasing a villa under a Thai company does not require the declaration of funds from abroad for registration.

Thai lawyers of Lokart International can offer you a comprehensive legal service and suitable forms of ownership, taking into account individual preferences and requirements.