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CAN YOU OWN PROPERTY IN PHUKET THROUGH A THAI COMPANY LIMITED?

Legal Ways for Foreigners to Own Property in Thailand: A Comprehensive Guide

Foreigners who are interested in purchasing a property in Thailand, especially in Phuket, must understand the legalities of owning a property in the country. Despite the fact that Thai law prohibits foreigners from owning land or permanent possession of a landed property, many agents and villa developments across the island still market their products as freehold property available for foreigners to buy. Using a Thai Company Limited as a loophole to purchase a villa does not necessarily make it legal, as the Thai authorities have made it very clear that using a Thai Co. Ltd. solely as a “holding company” to own property is illegal.

Why Using a Thai Company Limited is Not a Perfect Solution

While using a Thai Company Limited to buy and register land at the Land Office may appear legitimate, the fact that the authorities will not register land in the name of any company with foreign shareholders/directors should raise alarm bells. Setting up a Thai Co. Ltd. with 100% Thai shareholders and directors to buy and register land and then later adding the foreigner as director of the company is a form of deception. This approach is neither legal nor a practical option for foreigners to own villas and houses, as the company must have legitimate Thai shareholders who have invested their own money in the company.

The Spirit of the Law Prevails

While the letter of the law on land ownership in Thailand allows foreigners to own land through provisions of a treaty, the last such treaty was terminated in 1970. Therefore, the spirit of the law is that foreigners should not own land in Thailand. No matter how foreigners try to circumnavigate the law to purchase landed property with a holding company, they will still be found to be breaking the law because the spirit of the law will always prevail.

Final Thoughts

Foreigners who are interested in purchasing a property in Thailand must do their own due diligence and educate themselves on the legalities before going ahead with any purchase. They must understand that owning a business in Thailand is legal, and a foreigner can set up a Thai Co. Ltd. with legitimate Thai shareholders who have invested in the company using their own monies. If the company has other legitimate business activity, and revenue, and the foreigner is added as director later, it could be a viable option. However, using a non-trading company with nominee shareholders is not a viable option for foreigners to own villas and houses.