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  • Ocean Views;
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The Condominium Act entitles certain groups of foreigners both individuals and companies to acquire a condominium or apartment units in Thailand, provided that the foreign ownership in a condominium project does not exceed, in the aggregate 49% of 100 % - the total area of all condominium units in the condominium building.

Developers will usually offer a choice of two ownership options being “freehold” or “leasehold”.

If the units being sold have not had their quota of foreign ownership met then you should likely be able to acquire a “freehold” interest in the condominium / apartment development. The “freehold” interest only give you rights to the building per se and not the land.

If the units being sold to foreigners have had their quota of freehold fully subscribed – then the developer is able to offer a lease interest in the condominium / apartment development. The longest duration a lease can be registered in Thailand is 30 years and it can be written into the contract that the lease is a lifetime lease meaning that you would have 2 options to renew at a max term of 30 years each.

The land upon which the condominium / apartments site is located would be owned by each individual with a majority Thai Shareholding and governed by a juristic entity or body corporate set up by an owners body.


Foreigners who bring foreign currency into Thailand to pay for the purchase of condominium units or withdraw money from a bank account of a non-resident, or withdraw money from a foreign currency account. Any one of the following documents is required:

  • Having one or more foreign Exchange certificate know as the “Thor Tor 3”, evidencing the sale or deposit of foreign currency in an authorized local bank. This form must bear the bank's authorized signature and seal in the authorized bank column. The Thor Tor 3 must specify that the purpose of the remittance of foreign currency be for purchase of a condominium unit or units and must in total equal or exceed the price of the condominium.
  • Foreigners who are permitted to have residence in Thailand under the Immigration Act. The documents required are either a passport, residence permit and house registration, or else an alien book.
  • Foreigners who are permitted to enter Thailand under the Investment Promotion Act. The documents required are a passport plus a letter from the Board of Investment of Thailand certifying permission to live in Thailand under the Investment Promotion Act.
  • Foreigners who bring foreign currency into Thailand to pay for the purchase of condominium units or withdraw money from a bank account of a non-resident, or withdraw money from a foreign currency account.


To own a condominium as freehold within the Thai quota, the investor will normally be told that they must set up a Limited Thai company. Be warned though, that a Limited Thai company may not necessarily qualify as “Thai” under the Condominium Act.

Should more than 49% of the registered capital of the Limited Thai Company be held by foreigners (or foreigners constitute more than half of its shareholders) the company will be subject to the same ownership restrictions as a foreign investor. The Foreign Business Act should also be considered when structuring the shareholding. The FBA has very specific rules about deeming Thai companies with foreign shareholders as foreigners.

The Thai shareholders that will have to co-invest in the company owning the condominium unit cannot hold their shares as a nominee of the foreign shareholder. What constitutes a “nominee” under the law has never been entirely clear and it is currently a topic that is receiving considerable attention. The Land Department and Department of Business Development have also this year introduced “evidence of funds” rules for Thais that hold shares in companies with foreign shareholdings or directorships.

Foreign investors purchasing condominiums under the Thai quota via a Thai company should seek professional advice on the appropriate shareholding structure of the Thai company and the security of their title.


So how does the foreign ownership limit affect tax planning for the condominium purchase?

One of the major factors affecting the amount of tax a foreigner property owner must pay in Thailand will be whether the property owner is an individual or a company.

If buying under the foreign quota, generally speaking, a purchaser can normally choose between purchasing the unit in his own name or that of an offshore company – either as the beneficial owner or as the trustee of an offshore trust or fund. 

Under the law, a foreign individual will be taxable in Thailand on all rental income derived from renting out a condominium unit in Thailand. The foreigner's nationality or residence status is not relevant nor does it matter whether the rent is received in or outside of Thailand.

If a foreign company registers instead as the owner, its liability to Thai income tax will depend on whether or not it is carrying on business in Thailand. Depending on how the property is managed, it is conceivable that a foreign company can receive rentals offshore free of Thai tax.

Under the Thai quota, with the Thai company route normally the only option to obtain freehold title, there will definitely be a number of taxes to consider and plan for.


A reasonable level of administration comes with operating a Thai company. There are tax returns to be filed on a monthly basis and corporate tax returns must be filed twice a year. A qualified bookkeeper must be engaged to prepare the accounts and every year the company's financial statements must be audited by a registered auditor and filed with the relevant authorities.

Even if you buy the condominium unit in a Thai company to use as your own residence or holiday home, the tax authorities will expect you to pay the company a reasonable rent in return.

Under the tax law, if the rentals received by a company are below market value without reasonable grounds, the tax authorities have the power to assess the company on the amount which the property could reasonably expected to be let in ordinary circumstances. Therefore the rents charged should reflect market value to avoid a possible tax assessment on deemed income.

Being under the Thai quota does open up the possibility of selling on the Thai company rather than the property. Depending on the circumstances, this may translate into substantial tax savings on exit, by avoiding the transfer taxes, registration fee and corporate income tax on a capital gain that would arise if the unit was transferred instead. If the company is to be sold, the foreign shareholder should also consider the tax implications in his home country.


Some developers have tried to address the problems associated with selling freehold condominiums to a predominately foreign audience. With the ownership rule based on the proportion of floor space held directly by foreigners, one obvious way is to try and put the larger units, such as penthouses, under the Thai quota, so more units can then be sold under the foreign quota.

Another way to deal with the foreign ownership limit, is to offer a long-term leasehold interest instead for the units that can't be sold directly to foreigners – deliberately moving away from the freehold sales pitch!

This will normally be structured so that a Thai company meeting the requirements of the Condominium Act ends up holding all of the units under the Thai quota. Foreign investors will then enter into long term leases for their unit with the Thai company. A shareholding interest in the Thai company may also be offered to the lessees. This is similar to the lease structure used for land deals that are omnipresent in todays proeprty tranactions. For all intents and purposes this is what we'd refer to as a "hybrid" lease.

By taking a leasehold interest, the foreigner can “acquire” a unit under the Thai quota without being forced to set up and run his own Thai company in co-operation with Thai shareholders. Where he does use the unit as his personal residence or holiday home, he will not have to worry about paying income tax on rents he would otherwise be forced to pay if the unit was owned in a Thai company.

On exit, the stamp duty and registration fee payable on the transfer of a long-term leasehold interest are relatively low, and with a little planning, it would be possible to make a gain from the transfer of the lease exempt from Thai tax.

Therefore apart from the money saved by avoiding the Thai company structure, a lease can in fact make for a more attractive exit strategy than a freehold investment. 

N.B. - BDO Ritchfield has compiled a collection of its articles over the last two years. Please contact Paul Ashburn by email at for your free copy.

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