E&S Homes offer beautiful, first class properties in Hua Hin, Thailand

Leasing is legally the simplest, most straightforward way to own land rights in Thailand, a solution used by foreigners and Thais alike. Land lease contracts can cover periods of 30 years, or 3 times 30 years, or can confer rights equivalent to freehold ownership to the buyer.

The actual contract to lease the land for the first 30 years, and the buyer's rights therein to build and own, is the part of the whole agreement which is covered by Thai land law and which can be registered with the Land Department. If the intention of the buyer is to lease for 30 years only, a retirement plan or perhaps a commercial plan, this part of the agreement covers all ownership aspects.

Thai land lease lease contracts, therefore, are all based on the registerable 30 year period for which a standard contract is often used, and thereafter make the appropriate agreements between buyer and seller in the purchase contract. The registered 30-year lease contracts are in the Thai language but they are, of course, accompanied by notarised English translations. With all this paperwork in order, the future of a lease can be considered legally fully secure.

Buying property with a limited liability company is one of the most popular methods for foreign investors. This is because the Articles of Association can be written to allow greater protection for foreign minority shareholders. Thailand law generally requires that Thai nationals own a majority interest in a company if they wish to purchase land legally.

Thai law requires that 51% of the shares be held by Thai juristic persons, however, any company with more than 40% foreign interest that purchases land will be investigated by the Central Land Office in Bangkok (under section 74 of the Land Code) to ensure that the company has not been organized in an attempt to circumvent the prohibition against foreign ownership of land.

This results in the foreign ownership of the company being limited to 39% (only if buying land), but with the recommended changes of the Articles of Association, the foreigner can be the only director of the company, and the only person of the company who can commit or bind the company in any contractual dealings (buy or sell land and house), effectively giving the minority shareholders control over the company.