What are the Property Ownership Laws applicable to foreign investors?

Thai law states that foreigners can own buildings only, they cannot own land. If a foreigner wishes to acquire land there are two basic, tried and tested, options available:

1. Set up a Thai limited company with Thai shareholders and buy the land using this company. The foreign director(s) may not own more than 49% of the shares. However, the foreign director(s) hold all the power, and have effectively complete control, because the company is structured so that the Thai shareholders enter into legal power of attorney with the foreign director(s). The foreign director(s) is the only officer that can commit the company in any contractual dealings. Furthermore, the directors shares are preference shares and typically hold 10 times the voting rights of the other shares, giving the directors over 90% of the voting power.
2. An alternative to having a Thai limited company is for the foreigner to purchase a 30 year lease for the land. Options to extend the lease for 2 further periods of 30 years are normally built into the contract.

Note: It is also possible to combine these two approaches by having a lease contract that also includes the option to buy the freehold when the investor wishes. This is particularly attractive because many people feel that a change in the Thai law is likely which will allow foreign investors to buy freehold without a having a Thai company.