Under the Land Code, 1954, “aliens” may not own title to freehold land in Thailand. The definition of “alien” in the Land Code includes a person not of Thai nationality, and “a juristic person” (meaning a limited company) with more than 49 per cent of its share capital being foreign owned or more than half of its shareholders being “aliens”.
Therefore most of the foreigners set up a Thai limited company and transfer the freehold ownership in the land into the company. Thereafter any registered dealing in respect of the land will be done in the name of the company, including any construction of structure (house, villa etc.) thereon.
When re-selling the property owned by the said Thai company, one has the option of selling the shares of the company, since the chances of re-selling the property to another foreigner is high. This method allows the cost of setting up and maintaining the Thai company, up to the time of re-sale, to be incorporated into the selling price. No registration of transfer of ownership is required at the Land Department since technically the property is still owned by the same Thai company. As a result, transfer fees and taxes are avoided at the Land Department.
For more information about sale and purchase of property through shares in a Thai limited company, please contact us.