In Thailand, the term "foreigner" in legal contexts is referred to as "alien," denoting individuals without Thai nationality or juristic persons considered foreign, for instance, those where foreign ownership exceeds 49%. The realm of real estate ownership in Thailand for foreigners is carefully regulated, allowing ownership under specific conditions despite the attractiveness of Thai real estate to foreign investors. This regulatory framework ensures a controlled environment for foreign ownership, encompassing land, condominiums, and leasing options.
Firstly, direct land ownership by foreigners is highly restricted, with exceptions outlined in the land code laws section 96-2, introduced on 19 January 2002. This section allows foreigners to purchase land up to 1,600 square meters for residential purposes, under several conditions:
Investment of no less than 40 million baht in Thailand, maintained for a minimum of five years.
Approval from the Ministry of Interior.
Investments can include purchasing Thai or Bank of Thailand bonds, or in property funds.
Foreigners may acquire land through inheritance as statutory heirs, or purchase using funds from a Thai spouse, provided the land remains personal property of the Thai national.
Foreign juristic persons, such as limited or public companies registered in Thailand, where foreign shareholding exceeds 49%, or the majority of shareholders are foreigners, can also own land under certain conditions.
Condominium ownership offers more flexibility for foreigners, as Thai law permits foreign ownership up to 49% of the total area of a condominium project. This provision has made condominiums a popular choice for foreign investors, particularly in urban and tourist areas, where demand often outstrips supply, leading to a willingness among foreigners to invest in long-term leases.
Leasing real estate presents another viable option for foreigners, with no significant restrictions on short-term leases under three years, which do not require registration. However, long-term leases exceeding three years must be registered at the local land office, with the law capping lease terms at 30 years, renewable for another 30 years upon agreement expiration.
The Thai government has implemented these regulations to balance promoting foreign investment with protecting the domestic real estate market from speculative buying. These legal provisions ensure that foreigners can participate in the Thai real estate market through condominium ownership and long-term leasing, contributing to Thailand's economic growth while safeguarding national interests. Understanding these legal frameworks is crucial for foreigners looking to invest in Thai real estate, highlighting the importance of informed decision-making in this sector.