Property Guide for Foreign Business Owners
Are you a foreigner looking to own property for your business in Thailand? Understanding the difference between freehold and leasehold ownership is key. Both have pros and cons, especially for business owners navigating Thailand’s rules.
Freehold Ownership
Freehold means full ownership of property, which is great for businesses that need a long-term base. In Thailand, foreigners cannot own land directly. However, they can own freehold condominiums, as long as foreigners do not own more than 49% of the project.
For land ownership, foreigners often use Thai limited companies. The company owns the land, with the foreigner holding shares, not to exceed 49%. The majority is held by Thai shareholders. This setup carries risks. Thai law bans “nominees,” which are Thai shareholders acting on behalf of foreigners without a true financial stake. Breaking these laws can lead to fines, property loss, or criminal charges. Companies without real business operations may also attract legal scrutiny.
Leasehold Ownership
Leasehold ownership is another option and is fully legal for foreigners. It involves renting property for a set period, typically 30 years, with possible renewals. Leaseholds are easier to manage and avoid the complications of company ownership.
However, leaseholds have downsides. Renewals depend on the property owner’s agreement and are not guaranteed. This can make it harder to resell or build long-term value for your business.
Tips for Foreign Business Owners
- Get Expert Help: Work with lawyers and consultants who know Thai business and property laws.
- Choose Leaseholds for Simplicity: Leaseholds are easier and work well if you don’t need to own the property outright.
- Avoid Nominees: Stick to legal ownership structures to protect your investment.
Choosing between freehold and leasehold depends on your business needs. Freehold offers stability, but you must navigate strict laws. Leasehold is simpler but comes with limitations. Avoid illegal nominee schemes and consult experts to stay compliant.
At Siam Business Brokers, we help clients buy and sell properties and businesses in Thailand. Contact us for expert advice and guidance to make the best decisions for your venture.