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Leasing a Land for Commercial and Industrial in Case of Foreigner

In Thailand, foreigners have the option to lease land according to regulations outlined in a previous article, allowing for lease agreements of no more than 30 years. Upon the expiration of these agreements, they may be renewed for a period not exceeding another 30 years. Recognizing the importance of fostering investment in commercial and industrial ventures, the Thai government has introduced specific conditions that deviate from the standard leasing agreements for real estate used for commercial and industrial purposes. Foreigners can lease land up to 100 rai or even more, subject to certain rules.

For lands not exceeding 100 rai, the lease period can be set for more than 30 years but must not surpass 50 years. Both the lessee and the lessor have the option to renew the lease for a period not exceeding 50 years from the date of renewal. However, the lease agreement must be documented and registered with the relevant authorities to be valid, and the lessor must be the sole owner of the property. The lease agreement may include rights and obligations such as the ability to mortgage the lease as security, transfer by descent, sublease, or transfer leasing rights to another party.

Moreover, the law mandates that real estate designated for lease must be located in areas zoned for commercial or industrial use according to urban planning laws or Industrial Estate standards. To qualify for registration, the leased property for commercial purposes must involve an investment of at least 20 million baht. Industries eligible for leasing must qualify for investment support under the relevant investment promotion laws, with the commercial or industrial activity being beneficial to the country's economy and society as declared by the Minister. Furthermore, the type of commercial or industrial activities allowed for foreigners must be legally permissible for foreign business operations.

In cases where the leased land exceeds 100 rai, additional conditions apply. The business conducted on the premises must either contribute to the country's export value, support employment, introduce processes or technologies not currently available or insufficient in the country, or significantly benefit the economy and society as determined by the Ministry with the Cabinet's approval. If the lessee, sublessee, or recipient of the lease rights is a foreigner engaged in commercial or industrial activities, the investment must be no less than 100 million baht, excluding lease fees. This investment must involve the inflow of foreign currency into Thailand, either through direct transfer, withdrawal from foreign currency accounts, or from accounts of persons residing abroad, totaling the amount of the investment.

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