Ownership of Thai Real Estate Through Corporate Structures

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Thai real estate corporate ownership continues to be a sought-after investment avenue for foreigners, despite strict legal restrictions. Many investors explore corporate structures to navigate these limitations. However, evolving legal frameworks in 2025 impose stricter compliance measures, ensuring transparency and curbing nominee shareholder abuses.

Navigating Thai Real Estate Corporate Ownership Regulations

Understanding the complexities of Thai real estate corporate ownership is essential for foreign investors. Thailand’s government enforces stringent laws on foreign land ownership, requiring careful legal structuring for compliance and investment security.

Legal Framework

Under Thai law, direct foreign ownership of land is prohibited. The Land Code Act B.E. 2497 stipulates that entities with over 49% foreign capital or voting rights qualify as foreign. However, foreigners can own up to 49% of condominium units in any given development. To gain land access, some investors establish Thai companies with majority Thai ownership, but this practice is increasingly scrutinized.

Corporate Structures

Foreign investors typically form Thai companies with Thai-majority shareholders to own land indirectly. Key considerations include:

Shareholding Rules: Foreigners may own up to 49% of shares, while Thai nationals must control the majority.
Active Business Operations: Companies must conduct legitimate business activities and comply with accounting and shareholder regulations.
Tax Liabilities: If the company-owned property is used as a residence, applicable taxes, including housing and land tax, must be paid.

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Recent Legal Developments in Thai Real Estate Corporate Ownership

New regulatory amendments in 2025 enhance oversight of corporate land ownership:

Nominee Shareholder Investigations: Authorities conduct rigorous checks on Thai shareholders to confirm their financial independence and prevent proxy arrangements.
Foreign Business Act Amendments: Proposed changes may redefine foreign-controlled businesses based on management influence rather than just shareholding structure.
Extended Lease Terms: A new proposal seeks to increase maximum lease periods from 30 to 99 years, providing a viable alternative to direct ownership.

Risks and Compliance Measures for Thai Real Estate Corporate Ownership

Investors should be aware of legal and financial risks associated with corporate ownership:

Legal Penalties: Using nominee shareholders or circumventing foreign ownership laws may lead to land confiscation under Section 96 of the Land Code Act.
Tax Obligations: Companies holding real estate must comply with corporate tax regulations, even if they do not generate income.
Regulatory Uncertainty: Future amendments could impact existing ownership structures, necessitating ongoing legal compliance.

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Opportunities for Foreign Investors

Despite regulatory challenges, Thailand remains an attractive market for property investment. Key opportunities include:

Expanded Foreign Condo Ownership: Proposed amendments may increase the foreign ownership cap from 49% to 75% in condominiums, particularly in high-demand locations like Bangkok and Phuket.
Long-Term Leases: Extended lease periods provide a secure and legally compliant alternative to ownership through corporate structures.

Conclusion

Foreign investors seeking Thai real estate corporate ownership must navigate evolving legal landscapes. While corporate structures remain an option, stricter regulations demand careful compliance. Emerging alternatives, such as extended leases and expanded condominium ownership rights, present viable investment opportunities. Staying informed and working with legal experts is essential for safeguarding property investments in Thailand.