Thinking of owning a slice of paradise in Thailand? Whether you’re drawn to the vibrant charm of Hua Hin or the serene beauty of other destinations, understanding your ownership options is crucial. Let’s break down the legalities for foreigners.
Freehold condominium ownership
• Own your haven outright (freehold): As long as the building is at least 51% Thai-owned, you can purchase a condo unit directly. This is the simplest and most secure option.
• Be aware that the foreign ownership quota is capped at 49% per development. If it’s full, you’ll need to explore alternative options.
Owning land
Land ownership in Thailand is reserved for Thai nationals. If you have a trusted Thai spouse or family member, registering the land in their name is a straightforward option. However, legal considerations apply, especially for married couples.
You can establish a Thai company with yourself as the majority shareholder. This company then owns the land, essentially granting you indirect freehold ownership. While offering more control, it involves annual paperwork and tax obligations.
Note that Thai law prohibits foreigners from using Thai people as nominee shareholders to form a majority Thai-owned company. The Thai government is increasingly chasing this kind of setup, so be wary.
Leasehold
No Thai connection or company? Leasehold becomes the primary option. This involves renting the land from a Thai citizen or entity for an extended period (typically 30 years, renewable for 2 additional 30-year terms). Lease agreements are legally binding, offering security and peace of mind.
Carefully review the lease agreement with your lawyer to ensure favorable terms like lease renewal and buyer flexibility.
Taxes and transfer fees
• Thai company ownership: selling your property within the company structure can be tax-efficient, but the buyer must agree to take over the company. Otherwise, standard transfer fees and taxes apply.
• Individual ownership: taxes depend on your ownership duration. Longer ownership translates to lower taxes.
• Thai company ownership: regardless of ownership length, a Special Business Tax applies, potentially impacting the seller’s tax burden.
What’s right for you depends on you. Consider your budget, risk tolerance, and long-term plans to choose the ownership structure that best aligns with your needs. Consult a reputable lawyer is vital for navigating the intricacies of each ownership option.