Does the law in Thailand allow a foreigner to have 100% interest for a land lease in Thailand?

The answer is YES. A foreigner is allowed to have 100% interest for a land lease in Thailand and he/she is able to secure long-term land leases under Thailand land lease law. Is registration at the Land Department mandatory?

It is mandatory for leases that are three years or more to be registered at the Land Department. Land leases that are less than three years do not require registration. How long is the maximum lease term allowed in Thailand?

The maximum lease term allowed in Thailand is 30 years. Thereafter, there are renewal options for additional 30 years. A new registration at the Land Department is mandatory for every lease renewal with the landowner's agreement. Such renewal leases are taxable. A foreign company may be allowed to lease land for industrial or commercial use for up to 50 years under certain circumstances.

Why do foreigners choose the land leasing option to own property in Thailand?

Land leasing is the most straightforward approach to acquire property in Thailand. Many foreigners feel more secure knowing that a legally registered land lease stays valid even if the underlying property or the land is sold. Using a long-term lease, rather than a limited company to purchase land means that a foreigners interest is protected in his or her own right. There is no need for the various administrative requirements of registering and maintaining a limited company. Further, the foreigners interest is 100% in the lease, rather than 49% or less, as with a company.

What are some of the disadvantages of land leases?

Many foreigners safeguard their interests using a well-crafted land lease and option agreement to extend the lease with the landowner. Unfortunately, such an agreement is not a guarantee against the breach of contract by a difficult landowner who may refuse to sign any registration for a lease renewal. Also, if the land is sold to a third party or if the landlord dies and the land passes on to his or her heirs, the agreement may be difficult to enforce. There are other disadvantages such as a lower resale value than with freehold ownership and the possibility of lease violation lawsuits by the landowner.

There are pros and cons in every approach used to buy land or purchase property in Thailand. Whether you choose company formation or seek a lease arrangement to buy land or purchase property, it is important to seek qualified legal advice from reliable lawyers who have experience with Thailand land law as it relates to non-Thais.