Thai Law Insights

Alternative to Foreign Interest-Buying Condos in Thailand

Aphiradee Kitichaichananon

Prior to the amendment of relevant laws, foreigners and foreigner companies were generally not allowed to own any interest in land in Thailand, as well as condominium units.

In 1991, to promote an investment in Thailand, the Condominium Act was amended to allow foreign individuals and foreigner companies to own condominiums freehold in their name in Thailand under certain circumstances provided by law.

Purchase of Condominiums by Foreigners

Foreign Ownership of condominiums is regulated by the Condominium Act B.E. 2522 (1979), which generally provided that the acquisition of ownership in condominiums by foreigners was prohibited.

The Act was amended in 1991 to allow foreigners to purchase and own condominiums on a freehold basis in Thailand, subject to certain qualifications. At first, foreigners were allowed to own only 40% of the saleable unit spaces. Next, to increase the purchase of condominiums by foreigners and to promote investment in condominiums in Thailand, the Act was amended in 1999 so that foreigners may own condominiums in a proportion not exceeding 49% of the aggregate unit space in a condominium. In addition, for the five-year period as from 28 April 1999 to 27 April 2004, foreigners could acquire ownership of a condominium more than 49% in some condominium buildings located in Bangkok and other municipalities and districts provided by Ministerial Regulations.

This provision was for a limited time. After 27 April 2004, foreigners may own only up to 49% of the total area of the units in the condominium building unless they acquired the condominium during the five-year period or they acquired unit from a former foreigner who bought the condominium during the five-year period.

Foreigners Qualified to Acquire the Ownership of Condominiums

• foreigners having a residence permit in Thailand under the immigration law;
• foreigners granted permission to enter into Thailand in accordance with investment promotion law;
• foreign entities deemed by law to be foreigners under Land Code and registered as legal entities under Thai law;
• foreign entities in accordance with the Alien Business Operation Act B.E. 2542 (A.D. 1999), granted promotion of investment certificate under investment promotion law; and
• foreigners or foreign entities deemed by law to be foreigners, brought foreign currency into Thailand or withdrawn money from a non-resident Baht account or from a foreign currency account.

Even though the Condominium Act allows qualified foreigners to acquire the ownership of condominiums in freehold, there are several limitations provided by law and a number of requirements that foreigners need to take into account. For example, if they have a residence permit in Thailand under the immigration law, they have to submit evidence of their residence in Thailand to officers of competent Land Office or, in some cases, they have to submit proof of the source of funds, etc. Therefore, it is important to seek legal advice prior to entering into any purchase and sale agreement for a condominium in Thailand.