owning
house and land in hua hin
Although
technically you are able to own a house or structure in your
own name, Thai law currently prohibits you from owning the land
the building is erected on.
There are ways in which you can structure
the purchase so that you are the de-facto owner of the land however.
The following ways can be used in order to fully comply with
Thai law:
Limited
Liability Company
This
is the most popular route to getting your dream home, as the Articles
of Association can be structured to afford the foreign investor
greater protection.
Thai law stipulates that the majority of shareholders
in a company must be Thai. Any company where over 40% of the shareholding
is foreign and the business of the company is land purchase would
be investigated by the Central Land Office. This is to ensure that
there has been no attempt to get around the ban on foreign ownership.
Therefore you are in practice limited to 39% share ownership.
With
a restructured Articles of Association, the foreign shareholder
can be the only director of the company and the only officer who
can undertake contractual dealings on the company’s behalf.
This, in effect, gives the foreign investor control over the company.
Nominee
with Lease and Option to Buy
You
can appoint a Thai national as a nominee. The nominee will purchase
the land and then agree to lease the land to you over a maximum
30 year term. The lease can then be renewed a further two times,
but again over a maximum period of 30 years per renewal.
If a
lease is granted for a period in excess of three years (which
in practice will always be the case) the lease must be registered,
in order to become enforceable. This will require the payment
of a registration fee and stamp duty, based on a percentage of
the rental fee over the entire period of the lease. The registered
lease will always remain in force, even in the event of the property
being sold.
The drawbacks to a lease include that, without the
lessor’s consent, the lessee cannot sublease, sell or transfer
his or her interest. And although each party can contractually
agree to renewals of the lease, this right cannot be registered
and is not effective against a purchaser of the property.
Usufruct
Interest (Sidhi-kep-kin)
Thai
law also recognises the system of usufruct.
A usufruct is similar
but not identical to a lease in so far as it permits the usufructor
to exploit the natural resources of a lot. Commonly, a usufruct
also includes the right to sublease the property or to transfer
the rights to a third party without the necessity to secure the
permission of the owner.
(Disclaimer: The information provided
in this site is for informational purposes only. No warranty is
expressed or implied. Before taking any legal action, persons are
advised to seek the advice of an attorney qualified in the area
of law concerned.)
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