Under the Land Code of Thailand (1954), non-Thai nationals are prohibited from owning land outright. However, structured alternatives exist to enable foreign participation while adhering to statutory requirements. Here, we explore permissible land-use and ownership avenues, while emphasizing compliance with Thai law to mitigate risks.
Long-Term Leasing: A Regulated Approach
Leasing remains the most accessible and secure method for foreigners to utilise land in Thailand. Governed by Section 540 of the Civil and Commercial Code (CCC), leases for immovable property are capped at 30 years. Notably, the Supreme Court Judgment No. 4655/2566 clarified that leases structured as ‘30+30+30 years’ must reflect genuine renewal intent rather than premeditated circumvention of statutory limits.
In the cited case, a 90-year lease agreement, prepaid in full and executed concurrently with renewal clauses, was invalidated for violating Section 540 CCC. The court emphasized that substance supersedes form; automatic renewals or lump-sum payments for extended periods may render agreements unenforceable.
The Department of Lands clarified its stance through Circular Letter No. MorThor. 0515.1/Vor8867, permitting registration of sequential 30-year leases. However, registration does not shield parties from judicial scrutiny if the arrangement is deemed a disguised long-term lease. Investors must ensure renewal clauses are contingent on future mutual agreement, not pre-arranged commitments.
In short, the Department of Lands will allow registration of sequential 30-year leases between two parties. Still, the lease agreements must state clearly that there is no certainty that the two subsequent 30-year leases will be recognised. The parties can only register and confirm the second lease period after the first 30-year lease has been completed. Generally, this requires complex drafting of the lease and any associated agreements, and at this stage, there is no solid court guidance on the accepted form of the agreement.
Condominium Ownership: Freehold Rights Under Quota
Foreigners may acquire freehold condominium units under the Condominium Act B.E. 2522 (1979), provided foreign ownership does not exceed 49% of a project’s total floor area. To qualify, purchasers must remit funds internationally and obtain a Foreign Exchange Transaction Form (TorTor3) from a Thai bank, verifying the foreign-sourced capital. Noncompliance with these requirements may nullify ownership claims.
While condominium ownership offers straightforward freehold rights, investors must verify the project’s foreign quota status before purchase. Developers exceeding the 49% cap may resort to leasing unsold units, potentially affecting marketability and returns.
Thai Corporate Structures: Compliance Over Convenience
Establishing a Thai limited company allows indirect land ownership, provided the entity is majority Thai-owned (minimum 51% Thai shareholders). Under the Foreign Business Act B.E. 2542 (1999), companies must operate legitimate businesses.
Nominee arrangements ‒ wherein Thai shareholders act as proxies for foreign beneficiaries ‒ are illegal under the Land Code, Thai Civil and Commercial Code, and the Anti-Money Laundering Act. Recent enforcement actions, such as the Koh Samui land investigations (2023) and the Phuket Nominee Scandal (2025), underscore severe penalties for violations, including fines up to B1 million, imprisonment and asset forfeiture. Foreign investors must ensure transparent shareholding structures and genuine capital contributions by Thai partners.
Alternative Acquisition Methods
Spousal Ownership: A Thai spouse may purchase land independently, though foreign partners hold no legal claim unless structured via a usufruct (see below) or a lease.
BoI Approved Investments: Foreigners investing at least B40 million in government-promoted sectors may acquire up to one rai (0.16 hectares) of land, subject to approval by the Minister of Interior under Section 96 bis of the Land Code.
Usufructs: While less common today, usufruct agreements (governed by Sections 1417–1428 CCC) grant usage rights without ownership, though enforceability hinges on the landowner’s cooperation.
Risks of Noncompliant Strategies
Nominee schemes and sham corporate structures expose investors to legal jeopardy, including forced divestiture within 180 days, criminal charges, and reputational damage. The Land Code explicitly prohibits such arrangements, and authorities increasingly employ audits and blockchain-based land title verification to detect fraud.
Conclusion and Recommendations
Foreign nationals should prioritise legally sound strategies:
- Opt for condominium ownership within the 49% quota, ensuring compliance with foreign currency regulations.
- Structure leases as sequential 30-year terms without prearranged renewals.
- Establish Thai companies only for bona fide commercial activities, avoiding nominee shareholders.
To navigate this complex landscape, prospective investors are advised to consult licensed Thai legal counsel and reference official resources, including the Department of Lands and the Board of Investment. Using a non-qualified, non-impartial advisor as a source of information is fraught with issues and the potential loss of your investment.
Paul Crosio is a Partner at Formichella & Sritawat Attorneys At Law (www.fosrlaw.com), a Chambers, Asia Business Law and Legal 500 highly rated law firm. Paul specialises in real estate law, foreign direct investment, bankruptcy, and company rehabilitation.
The information in this article is only for general knowledge and learning purposes. This article shouldn’t be treated as legal advice. Consulting a qualified legal professional is always recommended. For any questions, contact Formichella & Sritawat at info@fosrlaw.com