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It’s easy for you to own land in Thailand.

All you have to do is invest 40 million Baht (about $1 million) in a project considered “useful for Thailand” (not real estate, mind you). That minor detail out of the way, you then have to select the land you want from a list of approved areas (you didn’t think you could buy anywhere you want, did you?) 

Finally, you can only continue to own property if your original investment is still in Thailand (if your $1 million investment leaves the country, you have a limited amount of time to sell the land). Piece of cake, right?

If, like me, you don’t have a spare million dollars lying around (or the temperament for the above rigmarole), there is a better way to own real estate in Thailand. 

Although foreigners can’t own land freehold (with the $1 million exception) there exist several structures through which foreigners can legally purchase real estate:

Buy a condominium: The easiest way to own real estate in Thailand is to purchase a condominium (in an approved condominium complex). The only restriction is that the percentage of units sold to foreigners cannot exceed 49% of the total number of units in the condominium block, and that the funds used to buy the condominium have been remitted from abroad. 

Lease with an option to buy: A foreigner can have the right of possession of land by registering a lease agreement for 30 years.  The lease is renewable and is a legally binding document registered at the land office. You should incorporate into the agreement an option allowing you to purchase the land outright, should the law change and permit foreigners to own land in Thailand.

Usufruct interest: This type of agreement grants you temporary ownership rights on the property. In practice, a usufruct is limited to a 30-year maximum period, but can be successively renewed. The usufruct can be sold or transferred, but it expires upon the death of the holder, so cannot be inherited.

Limited liability company: This last option has recently come under scrutiny by Thai officials. As with land, foreigners can’t own more than 49% of a Thai corporation. A method that has been used by foreigners to get around this is to have nominee share holders who sign over their shares and then the shares are held by the foreigner’s attorney in trust. This effectively gives full control of the corporation and the land to the foreign owner. Recently the Thai government announced that it was going to start investigating the source of the money “used” by these Thai shareholders who presumably put up 51% of the property value when the corporation was set up.- Article Continued Below -
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However, the way most attorneys have in the past documented the flow of funds is to show the 51% provided by the Thai shareholder as coming from the foreign partner in the form of a loan.  This loan is collateralized by the shares of the company adding another layer of comfort for the foreigner.

My contacts in Thailand say it will be virtually impossible for the Thai government to determine these loans invalid thus this method of ownership by foreigners doesn’t seem in immediate danger by the scrutiny it is receiving.

Using this corporation method to own property isn’t risk-free.  Your attorney must be trustworthy as he will typically provide the nominee shareholder and hold the shares in trust.

The set-up cost for such a structure is approximately $1,500; the annual maintenance costs (including accounting fees and a corporate secretary) are approximately $1,200. There may be some property taxes payable, depending on the nature and price of the property purchase but these should be low. If possible, try to keep the accounts of the holding company balanced in such a way that the company does not incur corporate tax.

In Thailand, you’ll pay very little property tax, you’ll pay no capital gains tax (although there is an income tax on property, whether it’s paid by the buyer or seller is part of the negotiation). 

You’ll arrive at good airports and drive on decent roads. Plus, in Thailand, you can buy a big apartment on an island with ocean view for less than $200,000.
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This country is much improved since my last visit, two years ago. The local economy is doing better, infrastructure is improving, and communications, in some areas, are excellent. Expats, businessmen, and real estate professionals I spoke with are agreed: Thailand is open for business. An attorney I met who works with real estate developments told me “it’s easy to make money in real estate anywhere in this country.” I’m not as bullish as that, but you will find opportunity in Thailand no matter what type of real estate interests you: hotel development, raw land, a condo to live in, condo developments to invest in, city apartments, beachfront retreats, apartments for rental return or for a holiday home... But the area I’m most interested in right now is Hua Hin, a growing local beach resort town on the west coast of the Gulf of Thailand, about three hours from Bangkok. There is a lot of building going on here. Some foreigners are investing in real estate, but it is mostly the destination for rich Thais coming from Bangkok.

In addition to two long beaches, the city has five golf courses with two more less than an hour away and several others planned or under way.

Yet real estate prices in Hua Hin ($1,200 per square meter) are no more expensive than sleazy tourist hangout Pattaya—described by IL’s roving editor Steenie Harvey as “a sea of bars and brothels.”

Where would you rather put your money?
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