Executive Summary

Investing in real estate in Thailand presents unique opportunities, yet it is characterized by a complex legal framework, particularly for foreign nationals. A fundamental principle of Thai law prohibits direct land ownership by foreigners. However, various legal avenues exist to acquire property rights or control, with condominium freehold ownership and long-term leaseholds being the most common and secure. This report provides an in-depth analysis of these permissible structures, outlining the intricate acquisition processes, associated taxes and fees, and, critically, the significant cautions and risks that foreign investors must navigate. It outlines the indispensable role of expert legal counsel in ensuring compliance, mitigating potential pitfalls, and safeguarding investments in this dynamic market.

Introduction: Navigating Thailand’s Real Estate Landscape

Thailand remains a highly attractive destination for foreign real estate investors, drawing interest with its tropical climate, sustainable food source, modern amenities, and a robust tourism sector. Despite its allure, the country’s real estate laws impose complex restrictions and limitations on non-citizens. These regulations are rooted in the fundamental legal principle that direct land ownership is generally prohibited for foreign individuals. This long-standing policy aims to protect national interests and promote local participation in the real estate sector.

This report serves as a comprehensive guide for foreign investors, meticulously detailing the legal framework governing real estate acquisition in Thailand. It explores the permissible investment structures, outlines the step-by-step acquisition processes, itemizes the applicable taxes and fees, and, most importantly, highlights critical cautions and inherent risks. The objective is to equip potential investors with the knowledge necessary to make informed decisions, ensuring a secure and compliant investment within the Thai legal landscape.

I. Permissible Real Estate Ownership Structures for Foreigners

Thailand’s legal framework, primarily governed by the Land Code Act B.E. 2497 (1954), restricts direct land ownership by foreign individuals. This policy reflects a national interest in preserving land ownership for its citizens and ensuring control over immovable property remains within Thai nationals. Despite this overarching prohibition, several legal avenues allow foreigners to acquire significant rights to or control over real estate.

A. Condominium Ownership (Freehold)

Condominium ownership stands out as the most straightforward and popular option for foreign investors in Thailand. The Condominium Act B.E. 2522 (1979), with subsequent amendments in 2008 and 2011, explicitly grants foreigners the right to fully own condominium units.

A critical condition for foreign freehold ownership is the 49% Foreign Ownership Quota, which stipulates that foreign ownership cannot exceed 49% of the total saleable area of all units within a condominium project. It is the duty of the Juristic Person to monitor and observe this quota, the legal entity responsible for managing the condominium building. An interesting dynamic arises in the resale market: if a unit initially designated under the foreign quota is subsequently sold to a Thai national, its status converts to Thai quota, thereby freeing up foreign quota availability for future foreign buyers within the project. This mechanism means the 49% foreign ownership limit is not a static barrier but a dynamic constraint. Some developers may charge a premium for units available under the foreign quota, reflecting the high demand for this secure ownership type. Foreign freehold owners of condominiums enjoy full ownership and transfer rights, identical to those held by Thai owners. Their responsibilities include paying annual condominium common fees, adhering to condominium bylaws, and contributing to the upkeep of common areas through the owner juristic entity.

For foreign individuals purchasing a condominium, Thai law mandates specific Fund Transfer Requirements: funds equivalent to the purchase price must be remitted into Thailand in foreign currency. Proof of this remittance, typically a Foreign Exchange Transaction (FET) Form, is a prerequisite and must be presented to the Land Office at the time of ownership transfer registration. This regulation is designed to ensure B. Long-Term Leasehold Agreements

Given the general prohibition on direct land ownership for foreigners, long-term lease agreements serve as a common and legally recognized alternative to secure property usage rights in Thailand. The Thai Civil and Commercial Code (CCC), specifically Section 540, allows land and buildings to be leased for a maximum term of 30 years.

For a lease term exceeding three years, the Registration Requirements stipulate that the agreement must be in writing and registered with the Land Department, as outlined in Section 538 of the CCC. This registration at the relevant land office is crucial because, without it, the lease is legally enforceable for a maximum of three years. Registration ensures the lease is recognized against third parties, thereby providing a degree of security to the lessee.

Regarding Renewal Clauses and the 30+30+30 Myth, it is common for lease agreements to include clauses for an additional 30-year renewal term.2 However, a significant misconception, widely promoted in some tourist areas, is the legality of “30+30+30-year” lease terms, implying automatic renewals totaling 90 years.17 This concept is legally baseless. The Thai Civil and Commercial Code (Section 540) clearly limits lease terms to a maximum of 30 years. Supreme Court judgments spanning over 15 years consistently affirm that any additional automatic renewals beyond the first are not legally enforceable. The lease term renewals must be re-agreed upon at the time they are due to take effect and cannot be contractually guaranteed in advance. Land Department’s regulations concerning leases by foreigners explicitly restrict the inclusion of automatic renewals in registered leases, often refusing to register agreements that attempt to circumvent ownership restrictions through multiple guaranteed renewals. This means that the lessee’s ability to renew remains dependent on the lessor’s willingness to honor the renewal at the end of each 30-year term, and a new registration is technically required. . Therefore, careful drafting of lease agreements, including clear renewal clauses and robust dispute resolution mechanisms, is paramount.2

Regarding Inheritance and Transferability, under Thai law, lease agreements typically terminate upon the death of the lessee unless explicitly stated otherwise in the agreement.8 This presents challenges for investors seeking to pass on their property interests to heirs. It is essential to include a clause that permits the transfer or inheritance of lease rights. However, the enforceability of such provisions may still be subject to judicial interpretation, underscoring the critical need for legal consultation during the drafting process. 

B. Company Ownership (Indirect Land Ownership)

While foreigners are generally prohibited from directly owning land, a Thai company can legally own land. A company is considered Thai if at least 51% of its shares are held by Thai nationals. Foreigners are permitted to own up to 49% of the shares in such a company.

However, this structure carries significant Risks of Nominee Shareholding. Using Thai nationals as nominees solely to circumvent foreign ownership restrictions is illegal under Thai law. Engaging in such arrangements can lead to severe penalties, including fines of up to THB 20,000, imprisonment for up to two years, force to dispose the land, business shutdown, and significant reputational damage.

Thai authorities have intensified scrutiny on companies suspected of being set up merely as proxies for foreign land ownership. Recent trends in 2025 indicate significant crackdowns on nominee structures, particularly in high-risk sectors like real estate, with joint investigations conducted by the Department of Business Development (DBD), the Anti-Money Laundering Office (AMLO), and the Ministry of Commerce. Authorities look for key red flags such as a lack of genuine capital contribution by Thai shareholders, passive roles for Thai shareholders, an absence of real decision-making power by Thai nationals, disproportionate foreign influence, opaque Ultimate Beneficial Owners (UBOs), and agreements guaranteeing fixed returns to foreign investors regardless of business performance. The peril of circumvention and heightened enforcement means that the risks associated with illegal nominee structures far outweigh any perceived benefits. 

II. Real Estate Acquisition Process for Foreigners

Purchasing real estate in Thailand involves defined legal procedures that require careful navigation to ensure a secure and compliant transaction.

A. Due Diligence: The Cornerstone of Secure Investment

Thorough due diligence is non-negotiable and forms the cornerstone of any real estate investment in Thailand. Skipping this crucial step can lead to significant financial losses and legal complications.

Key steps in the due diligence process include:

• Title Deed Verification: This involves verifying the authenticity and legal status of the property’s title deed at the relevant District Land Department. It is critical to ensure that the ownership of the title is under the Land Title Deed, which is the most secure and desirable form of land ownership document in Thailand, as sophisticated forgeries exist. Officials at the Land Office can confirm the document’s authenticity and provide a comprehensive history of the land title, including previous transfers and any registered encumbrances such as mortgages, liens, or existing leases. It is essential to confirm that the seller’s identity precisely matches the owner listed on the deed. Furthermore, verifying that the boundaries shown on the title deed accurately match the actual physical property is crucial to avoid potential land encroachment issues or discrepancies affecting the land’s location. Investors should also be aware of other types of land deeds, such as Nor Sor Sam Gor (Confirmed Certificate of Use), Nor Sor Sam (Claim of Possession), and Sor Kor 1 (Notification of Possession), and understand their varying legal implications, which often include limitations on ownership rights and higher risks of boundary disputes.
• Town Zone Verification: Investor should check the eligible activities in the target land to see whether the prospect activity is permissible to perform on the land. There are town zone in provincial level and municipal level which do not always carry out identical permissible activities. Therefore, verification of all town zones is very important.
• Property and Developer Verification: For off-plan properties, it is imperative to thoroughly vet the developer’s reputation by researching their history, reviewing past projects, and checking online reviews and feedback from residents. Confirming that all necessary construction and environmental permits have been acquired under the Building Control Acts and other relevant environmental laws is vital before any work commences. Additionally, checking for any pending litigation against the developer or the property itself is an important step to identify potential legal liabilities. For condominiums, reviewing the financial health of the Juristic Person, including their financial statements, common area fees, and minutes of meetings, can reveal potential issues or planned special assessments.

The Role of Legal Counsel in this phase cannot be overstated. Engaging experienced property lawyers is essential for navigating the complex verification process, identifying potential issues, and ensuring robust contractual protections. They can interpret Thai legal documents, which often require professional translation, and provide invaluable guidance to safeguard the investment.

B. Contractual Agreements

The acquisition process typically involves several key contractual stages:

• Reservation Agreement: This is the initial step where a buyer pays a reservation fee to secure the unit and have it taken off the market while due diligence is performed.13 The deposit, typically ranging from 1% to 5% of the property’s selling price, is usually non-refundable.
• Sale and Purchase Agreement (SPA): Following satisfactory due diligence, the SPA is signed, commonly within 30 days of the reservation agreement. This comprehensive document details the property’s characteristics, the agreed price, payment schedule, responsibilities for transfer fee and taxes, and any warranties, etc. The criticality of contractual clarity and due diligence timing is paramount here. Since reservation agreements are often non-refundable, conducting thorough due diligence
  before signing any such agreement is crucial to avoid financial loss. A lawyer’s meticulous review of the SPA is essential to identify and mitigate risks from hidden clauses, unexpected fees, or unfair conditions.
• Fund Transfer Regulations: Thai law mandates specific procedures for foreigners transferring funds for property purchases. All funds used by foreigners to purchase real estate must be transferred from a foreign bank account to a Thai bank account in foreign currency. Proof of this remittance, typically an FET form from a Thai bank (in Thai language), is required for ownership registration. 

C. Registration and Title Transfer

The final stage of the acquisition process involves the official transfer of ownership at relevant provincial Land Office:

• Process at Land Office: Both the buyer and the seller, or their authorized representatives holding a Power of Attorney, must visit the Land Office to perform a transfer registration. All required documents, among other things, including the title deed, identification documents, and the FET form (for condominiums), shall be submitted to the land officer.14 Then, the Land Officer reviews all documents for accuracy and authenticity before proceeding.
• Issuance of the Updated Title Deed: Upon successful verification and payment of all applicable taxes and fees, the updated title deed containing buyers name as the owner shall be issued. 
• Post-Transfer Procedures: After the title transfer, it is advisable to update the house registration book (Tabien Baan) and change the billing names for utilities such as electricity and water.

III. Taxes and Fees Associated with Real Estate in Thailand

While Thailand generally offers favorable tax rates globally, specific property taxes and fees apply to real estate transactions and ownership, which foreign investors must understand.

A. Transaction Taxes and Fees (Upon Sale/Transfer)

These fees are typically incurred at the point of sale or transfer of property:

• Transfer Fee: This mandatory charge is levied by the Land Department at a rate of 2% of the property’s appraised value or the actual selling price, whichever is higher (the government provides a discount to promote investment occasionally). It is typically shared equally between the buyer and the seller, unless otherwise stipulated in the sale and purchase agreement. 
• Specific Business Tax (SBT): Applicable at a rate of 3.3% of the sale price or the appraised value (the government provides a discount to promote investment occasionally), whichever is higher. Certain exemptions apply, such as properties owned for more than five years or those transferred through inheritance. Developers are typically responsible for the full payment of SBT.
• Stamp Duty: This fee is set at 0.5% of the registered sale price. Importantly, stamp duty is exempt if the Specific Business Tax (SBT) is charged on the transaction.
• Withholding Tax (WHT):

• For Companies: The WHT is fixed at 1% of the registered sale value or the appraised value, whichever is higher. Developers are generally responsible for the full WHT.
• For Individuals: The WHT is calculated using a progressive scale based on the appraised value of the property and the duration of ownership. 

• Lease Registration Fee: For real estate leases, a fee of 1% of the total rental payments throughout the lease term is charged by the land office at the time of registration. An additional stamp duty of 0.1% of the total rental payments is also applicable.
• Miscellaneous Expenses: Other minor expenses may include installation fees for electricity meters and administrative charges at the Land Office.

Understanding the total cost of acquisition and sale is crucial. These transaction costs can be substantial, amounting to as much as 6% of the contract’s value for foreign investors. The allocation of these fees between the buyer and seller is often negotiable and must be clearly defined in the Sale and Purchase Agreement. This detailed understanding is vital for accurate financial planning and assessing the overall profitability of the investment.

IV. Cautions and Risks for Foreign Investors

Thailand’s property market, while attractive, is complex and poses inherent challenges for foreign investors due to its unique regulations, local practices, and potential language barriers. Scammers and some fraud lawyers (especially in tourism areas) frequently target foreign investors, exploiting their unfamiliarity with Thai property laws. A thorough understanding of these laws and the market landscape is critical to mitigating risks and safeguarding investments.

A. Legal Risks and Scams

Foreign investors must be acutely aware of various legal risks and common scams:

• Illegal Foreign Ownership Scams: Scammers may deceptively promise foreign buyers for the direct land ownership, despite the stringent legal restrictions.21 Investors must avoid any deals that suggest direct ownership of land by foreigners without strict adherence to the law.
• Nominee Shareholder Scams: The use of Thai nationals as nominees to circumvent foreign ownership laws for land acquisition is strictly illegal. As detailed previously, this carries severe penalties, including substantial fines, imprisonment, and asset seizure. However, structuring a proper juristic person with Thai partner is legally to do so but it should be carefully crafted by the experienced lawyer to make sure there is no legal risk.
• Title Deed Fraud: This involves scammers falsifying or forging title deeds, often targeting properties owned by foreigners who may not frequently visit Thailand.10 It is imperative to work with a reliable lawyer who can verify the title deed’s legitimacy directly at the local Land Office.
• Phantom Real Estate Projects: In this scam, developers promote attractive real estate projects that are either non-existent or will never be completed, collecting deposits before disappearing. To avoid this, investors should only work with established and reputable developers with a proven track record, visit the development site to confirm construction progress, and request and verify proof of land ownership from the developer directly with the Land Office.
• Rental Scams: These often target foreigners seeking short-term accommodations, involving fake listings, demands for deposits for properties not owned by the scammer, or failure to deliver promised returns. Some freelance agents may also rent properties long-term under false pretenses and sublet them short-term, or secretly rent out properties while owners are abroad. Always use reputable platforms or agencies for rental agreements, opt for payments through official channels, and verify the property with a walk-through or virtual tour before making any payment.

The prevalence of these scams stems from the complex legal framework and foreign investors’ potential unfamiliarity with local nuances. Deals that appear “too good to be true” are significant red flags. 

V. Practical Recommendations for Foreign Investors

Navigating the complexities of real estate investment in Thailand requires a strategic and cautious approach. The following practical recommendations are crucial for foreign investors:

A. Engage Qualified Legal Counsel

Retaining qualified legal counsel specializing in Thai real estate law is not merely recommended but is an absolute necessity. Legal professionals are indispensable for:

• Due Diligence: Conducting thorough title searches, verifying seller identity, identifying encumbrances, and assessing developer reputation and project’s permits.
• Contract Review: Meticulously reviewing all contractual agreements, including reservation agreements and Sale and Purchase Agreements, to ensure clarity, fairness, and compliance with Thai law, thereby avoiding hidden clauses or unexpected fees.
• Title Transfer: Guiding the buyer through the intricate process of registering the sale and transferring the title at the Land Office, ensuring all fees are correctly paid and documents are properly submitted and evidenced.
• Fund Transfer Documentation: Assisting with the preparation and submission of essential documents such as the Foreign Exchange Transaction (FET) form, which is vital for legal ownership registration.
• Representation: Acting on behalf of the buyer through a Power of Attorney if the buyer is unable to be physically present for certain stages of the transaction.
• Dispute Resolution: Providing counsel and representation in the event of any property disputes or legal complications.

Their expertise is critical for understanding the nuanced legal landscape, avoiding costly errors, and ensuring full compliance with Thai regulations.

B. Thorough Due Diligence

Due diligence must be performed meticulously and before any financial commitment, including the payment of a reservation fee, as such fees are often non-refundable. Key aspects include:

• Verifying Title Deeds: Confirming the authenticity and legal status of the property’s title deedat the Land Department. This includes checking for any registered mortgages, liens, or leases, and ensuring the seller’s identity matches the deed.
• Assessing Developer and Project: For new or off-plan properties, a comprehensive assessment of the developer’s reputation, track record, and financial stability is crucial. This involves reviewing past projects, checking for necessary construction permits and environmental impact assessment performance, and verifying land zoning and use restrictions.

C. Understand Ownership Structures and Risks

A clear understanding of the permissible ownership structures and their associated risks is fundamental:

• Condominium Freehold: This is generally the safest and most straightforward option for direct ownership, subject to the 49% foreign ownership quota. Investors should be aware of the dynamic nature of this quota..
• Leaseholds: While 30-year lease agreements offer long-term use, investors must clearly understand that automatic renewals beyond the first 30-year term are not legally enforceable, despite common misconceptions. Renewal is contingent on the lessor’s willingness and requires new registration.
• Company Ownership: This structure allows indirect land ownership with Thai partner. If the structure of the company is carefully considered and implemented, the company is permitted to own the land. 

Conclusion

Real estate investment in Thailand offers compelling opportunities, yet it is undeniably complex for foreign investors due to the country’s unique legal framework. Success in this market hinges on a profound understanding of the permissible ownership structures, meticulous adherence to legal processes, and a proactive approach to risk mitigation. While direct land ownership is largely prohibited, secure avenues like condominium freehold and long-term leaseholds provide viable pathways, provided their specific limitations and requirements are fully appreciated.