Owning Properties in Thailand

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Owning Properties in Thailand
Owning Properties in Thailand

Acquisition of Land by Foreigners
                         According to Section 86 of the Land Code, a foreigner may acquire land in Thailand only by virtue of the provision of a treaty providing him with the right to own immovable property. Obtaining such acquisition is subject to the provision of the Land Code and the Ministerial Regulations issued under the Code, and the permission must be obtained from the Ministry of Interior. Before the termination of the treaty which was made on February 27th, 1970, there were 16 countries bided to the treaty ; USA, England, Switzerland, Germany, Denmark, Norway, the Netherlands, France, India, Belgium, Sweden, Italy, Japan, Burma, Portuguese, and Pakistan. Since then, Thailand has no longer made any treaty with any country to allow a foreigner to acquire land in Thailand by virtue of a treaty.
                         However, the Land Code has been amended with Section 96 bis providing that since January 19th, 2002, a foreigner is allowed to purchase land in Thailand for residential purpose and the land to be purchased shall be not more than one rai in area, and the following rules and conditions must be met:
                         1.  Bringing money not less than Baht forty million into the Kingdom for investment and maintaining the investment not less that five years;
                         2.  Permission must be obtained from the Minister of Ministry of Interior;
                         3.  Money brought into the Kingdom shall be invested in one of the following businesses or activities;
                                    3.1 To purchase bonds of Thai Government, bonds of Thai National Bank, bonds of State Enterprise or bonds which the Ministry of Finance secures the capital or interest,
                                    3.2 An investment in a property mutual fund, a property mutual fund or a mutual fund for resolving financial institution problems established under the law on Securities and Stock Exchange,
                                    3.3 An investment in share capital of a juristic person who is granted permission of investment under the law on promotion of investment,
                                    3.4 An investment in an activity as declared by the Board of Investment to be an activity eligible to be granted promotion of investment under the law on promotion of investment;
                         4.  The land to be acquired shall be located in Bangkok Metropolis, Pattaya City, or Tessaban (Municipality), or in the area specified as residential zone according to the law on Town and Country Planning and shall not be located in a military safety zone according to the law on Military Safety Zone;
                         5.  A foreigner, who is granted permission, shall utilize the land only for residence for his/herself and the family in a way that is not contrary to the local custom or good living of the local community;
                         6.  If a foreigner, who is granted permission to acquire such land, does not comply with the rules and conditions specified, he/she shall disposes of such land in the portion of his/her possession within the period of time specified by the Director General of the Department of Lands which shall be not less than one hundred eighty days and not more than one year. If the time limit elapses, the Director General shall have the power to dispose of such land;
                         7.  If a foreigner, who is granted permission to acquire such land, does not utilize the land for residence within two years as from the day the registration for land acquisition is made, the Director General shall have the power to dispose of such land.
                         Besides the aforementioned rules and conditions, an foreigners may acquire land by inheritance as statutory heir, in this instance, the land devolved when combined with the land already acquired shall not exceed that specified by law, for examples, land for residential purpose not exceeding 1 rai per household, land for commercial purpose not exceeding 1 rai, land for industrial purpose not exceeding 10 rais, and land for agricultural purpose not exceeding 10 rai per household.
                         A foreigner whose spouse is a Thai national either legitimate or illegitimate, that Thai national can purchase land but the foreigners spouse of that Thai national must give a joint written confirmation that the money which that Thai national will expend on purchasing the land is wholly the separate property or personal effects of that Thai national and not the Sin Somros or jointly acquired property.
Fees
                         (a)  0.01% of the valuation price, in the case of purchasing the land located in the land development project (this rate is due in December 2002)
                         (b)  In the case other than (a) the fee is 2% of the valuation price
Taxes and duties
To be paid according to the Code of Revenue


Acquisition of Condominium Unit by Foreigner
                       Previously, a foreigner could have ownership in a condominium unit or bought a condominium unit in each condominium in a proportion not higher than forty percent of the total space of all units in that condominium at the time the application for condominium registration had been lodging. Later, on April 28th, 1999, the Condominium Act was amended to facilitate a foreigner in the purchase of condominium unit. As such, a foreigner may have ownership in a condominium unit in a proportion not higher than forty nine percent of the total space of all units in that condominium at the time the application for condominium registration is being lodged. The amended Act also provides that a foreigner may have ownership in a condominium unit exceeding forty nine percent if the following rules are satisfied:

    1. Such condominium shall be situated in Bangkok Metropolis, municipality area or other local administrative area i.e. the Pattaya City;
    2. The total area of the land on which a condominium is situated, when combined with the land provided for common use or benefit of all co-owners, shall not exceed five rai;
    3. Such condominium shall accommodate not less than forty condominium units;
    4. Such condominium shall be registered not less than one year prior to the date an foreigner applies for ownership in the condominium unit;
    5. Such condominium shall not be situated in the area of military safety zone under the law on Military Safety Zone;
    6. An foreigner shall utilize a condominium unit in a way that is not contrary to the local custom or good living of the local community;

                       However, in a five year term as from April 28th,1999, the rules concerning the acquisition of ownership by an foreigner in a condominium unit in a higher proportion than forty nine percent shall take effect. After that it shall be repealed, and the foreigner obtaining an ownership in this regard and the foreigner receiving an ownership in a condominium unit transferred by the former are allowed to continue holding the ownership in that condominium unit even in a higher proportion than forty nine percent.


APPLICATION FOR ACQUISITION OF LAND OR CONDOMINIUM UNITS BY FOREIGNERS AND PERSONS CONNECTED WITH FOREIGNERS

1. Application by Foreigners for Acquisition of Land
Nowadays, a foreigner may apply for acquisition of land in Thailand in three cases as follows:

1.1 Receiving inheritance as a statutory heir under section 93 of the Land Code, in this instance, the total area including the land which has already been acquired (or has not yet been acquired) shall not exceed that specified in section 87 of the Land Code, i.e. not more than 1 rai   for a residential purpose;

1.2  Bringing the money into the Kingdom for investment to the amount as prescribed in the Ministerial Regulation, which shall be not less than Baht forty million.  In this instance, the land to be acquired must be for a residential purpose and must be of not more than 1 rai  in area, providedalso that permission must be obtained from the Minister.  Under section 96 bis of the Land Code, the application for such acquisition of land shall be in accordance with rules, procedures and conditions prescribed in the Ministerial Regulation.

1.3 Applying for acquisition of land under other laws such as the Promotion of Investment Act, B.E. 2520 (1977), the Industrial Estate Authority of Thailand Act, B.E. 2522 (1979), the Petroleum Act, B.E. 2514 (1971).  Detailed Information regarding the Promotion of Investment Act and the Industrial Estate Authority of Thailand Act can be obtained from the Board of Investment (BOI) at tel. + 66-2537-8111 and from the Industrial Estate Authority of Thailand at tel. +66-2253-0561 respectively.
            
2. Application by Foreigners for Ownership in a Condominium Unit
A foreigner or a juristic person deemed by law as a foreigner may have ownership in a condominium unit in Thailand when 2 following conditions are satisfied.  In the absence of either condition, the foreigner is not permitted to have ownership in a condominium unit.

2.1 Being a foreigner or juristic person deemed by law to be a foreigner under section 19 of the Condominium Act in any of the following prescribed categories viz: 
        (1)  Being an foreigner permitted to have a residence in the Kingdom under the law on immigration, in this instance, the evidence required to be produced shall be a passport indicating the nationality of the foreigner, and the certificate of residence (either TM. 11, TM. 15 or TM. 17 Form, as the case may be) issued by the Immigration Division, National Bureau of the Royal Thai Police Force.  In the case of an foreigner who possesses an foreigner identification card issued by the Police Station in whose jurisdiction the foreigner is domiciled, such card can be used as evidence for the purpose of applying for acquisition of ownership in a condominium unit in this case without production of a passport; 
        (2)  Being an foreigner granted permission to enter into the Kingdom under the law on promotion of investment, in this instance, the evidence required to be produced shall be a passport indicating the nationality of the foreigner, and a letter of the Office of the Board of Investment certifying that the person is an foreigner granted permission to stay in Thailand under the law on promotion of investment; 
        (3)  Being a juristic person deemed by law to be an foreigner under section  97 and 98 of the Land Code and has been registered as a juristic person under the laws of Thailand, in this instance, the evidence required to be produced shall be the evidence indicating the registration as a juristic person under the laws of Thailand, i.e. a certificate issued by the corporate Registrar of Department of Commercial Registration, Ministry of Commerce must be produced in the case of a limited company, a public limited company, a limited partnership or a registered ordinary partnership; 
        (4)  Being a juristic person that is an foreigner under the Foreigner Business Operation Act B.E. 2542 (1999) and that is granted a certificate of promotion of investment under the law on promotion of investment, in this instance, the evidence required to be produced shall be a letter of the Office of the Board of Investment certifying that the person is granted promotion of investment under the law on promotion of investment; 
        (5)  Being an foreigner or a juristic person deemed by law to be an foreigner, who brings a foreign currency into the Kingdom or withdraws the money from a non-resident Baht account or from a foreign currency account, the following evidence must be produced; 
                        (5.1)  The evidence for proof of the bringing of a foreign currency into the Kingdom for sale in order to obtain money in Baht currency to pay for a condominium unit is implemented in 2 manners : 
                                    (5.1.1)  in the case of an foreigner selling foreign currency in an amount exceeding US$ 10,000 or its market-rate equivalent, if an foreigner himself brings the money for sale, the Form F.T.3 (B) provided by an authorized bank to an foreigner shall be produced for reporting on sale of foreign currency.  If an foreigner sells foreign currency through transferring of that foreign currency to a transferee who has residence in Thailand to do the sale, the Form F.T. (A) provided by an authorized bank to the person residing in Thailand shall be produced for reporting on sale of foreign currency.  In both forms, it shall be written “remit from abroad” as regard the remitter;  
                                    (5.1.2)  in the case of an foreigner selling foreign currency in an amount not exceeding US$ 10,000 or its market-rate equivalent, or the sale of foreign currency to an authorized agent or person, a financial instrument of sale of foreign currency to be produced is a credit advice issued by an authorized bank or agent or person to the foreigner bringing foreign currency for sale; 
                        (5.2)  In the case of evidence for proof of the withdrawal of  money from a non-resident Baht account, either from an foreigner’s account or a foreign financial institute’s account, a letter provided by a commercial bank certifying that the withdrawal from such account is for the purpose of purchasing a condominium unit shall be produced; 
                        (5.3)  In the case of evidence for proof of the withdrawal of  money from a foreign currency account: 
                                    (5.3.1)  in the case of the withdrawal of money from a foreign currency account for sale to a commercial bank in order to obtain money in Baht currency in an amount exceeding US$ 10,000 or its market-rate equivalent, a copy of Form F.T.(B) provided by a commercial bank to the seller of foreign currency shall be produced along with the application for sale of that foreign currency; 
                                    (5.3.2)  in the case of the withdrawal of money from a foreign currency account for sale to a commercial bank in order to obtain money in Baht currency in an amount not exceeding US$ 10,000 or its market-rate equivalent, a financial instrument issued by a commercial bank to its customer or a commercial bank’s letter certifying of its purchase of that foreign currency shall be produced; 
                          In addition, the evidence as specified in 5.1, 5.2 or 5.3 or the combination thereof shall represent the amount of money that is not less than the price of the condominium unit intended to purchase. 

2.2  The ownership in condominium units by the foreigner and juristic person in 2.1 shall not be in a higher proportion than forty nine percent of the total space of all units in that condominium at the time of the application for condominium registration under section 6 with the exceptions that:     
                        a. A condominium in which the condominium units are to be owned by the foreigner and/or the juristic person specified in 2.1 in a higher proportion than forty nine percent must be located in the area of Bangkok Metropolis, municipality or the City of Pattaya and the land on which the condominium is situated shall not, when combined with the land provided for common use or benefit of all co-owners, be more than five rai in area.  Also, the condominium units in such condominium shall not be less than forty units and the condominium shall already be registered not less than one year prior to the date of application for the foreigner to own the condominium units in the proportion higher than forty nine percent, and such condominium shall not be situated in the area of military safety zone under the law on military safety zone.
                       b. It is provided in section 9 of  the Condominium Act (No. 3), B.E.2542 that at the expiration of five years as from the date of the entry into force of the Condominium Act (No. 3), B.E. 2542 (28th April 1999) the provisions as set forth in a. shall be repealed and the foreigner or juristic person having obtained the condominium units under a. or the foreigner or juristic person specified in 2.1 to whom the condominium units are transferred from the aforesaid foreigner or juristic person may continue to have ownership in such condominium units although in the higher proportion than forty nine percent of the total space of all units in that condominium.
           
3.  Application for ownership in land by a Thai national who has an foreigner spouse or ex- spouse or by a Thai national who is a minor child of an foreigner 

3.1  In the case where a Thai national who has an foreigner legitimate spouse applies for permission to purchase land or accept a transfer of land in a similar case during marriage or cohabitation as husband and wife with an foreigner, as the case may be, if after the inquiry the applicant and the foreigner spouse have given a joint written confirmation that the money which that Thai national will expend on the purchase of the land is wholly the separate property of that Thai national and not the community property or the jointly acquired property, the competent official will proceed with the registration of rights and juristic act.
In the case where a Thai national whose spouse is an foreigner intends to purchase land or condominium unit but fail to give a joint written confirmation to the competent official as the foreigner spouse is being abroad, in this instance, an foreigner spouse shall make the statement declaring in written at the Royal Thai Embassy, Royal Thai Consulate or Notary Public that the money which that Thai national will expend on the purchase of the land or condominium unit is wholly the separate property of that Thai national and not the community property or property which an foreigner spouse has co-ownership in it.  The competent official shall declare that the foreigner is an actual spouse of the Thai national and then submit to the competent land official who will proceed with the registration of rights and juristic act.
                          In the case where a Thai national whose spouse is an foreigner, after marriage, has already purchased or possessed the land and informed or submitted a false document declaring the married status of a Thai national as single or had not been married to an foreigner to the official prior to the date the letter of Ministry of Interior, most urgent no. MOI 0710/wor 792 dated 23 March 1999 was issued, or has already purchased or possessed the condominium unit after marriage and informed or submitted a false document declaring the married status of a Thai national as single or had not been married to an foreigner prior to the date the letter of the Department of Lands no.  MOI 0710/wor 34167 dated 6 October 2000 was issued, such foreigner spouse, whether legitimate or illegitimate, and a Thai national shall together give a joint written confirmation, which later to be filed in the case-list (or dealing package), to the competent official that the money which that Thai national will expend on the purchase of the land or the condominium unit is wholly the separate property of that Thai national and not the community property or jointly acquired property.  If an foreigner spouse is being abroad and not be able to come to give a joint written confirmation to the competent official, in this instance, the application shall be considered in accordance with the case that a spouse of a Thai national who intends to purchase land or a condominium unit is being aboard, then an applicant shall consign the statement, after completion, to the competent land official for filing in the case-list.

3.2 In the case where a Thai national who has a foreigner spouse, whether legitimate or illegitimate, applies for permission to accept a gift of land during marriage or cohabitation as husband and wife.  If the inquiry reveals that the acceptance of the gift is made with the intention that the land will become the separate property or personal property of the donee without resulting in the foreigner having co-ownership in the land, the competent official will proceed with the registration of rights and juristic act. 

3.3 In the case where a Thai national with an foreigner ex-spouse who is divorced or has ceased to cohabit or a Thai national who is a minor child of an foreigner applies for entering into a juristic act for the purpose of acquiring land, if an inquiry reveals no circumvention of law, the competent official will proceed with the registration of rights and juristic act. 
         
4.  Application for ownership in a condominium unit by a Thai national whose spouse or ex-spouse is an foreigner or by a Thai national who is a minor child of an foreigner 
               
4.1  In the case where a Thai national who has an foreigner spouse, whether legitimate or illegitimate, applies for permission to purchase or accept a transfer of ownership in a condominium unit with the intention that the property will become the separate property or personal property of the former, (for this purpose, it is deemed that a condominium unit is owned by a Thai national) or in the case where a Thai national with an foreigner ex-spouse who is divorced or has ceased to cohabit or where a Thai national who is a minor child of an  foreigner applies for the acquisition of ownership in a condominium unit, the application shall be considered in accordance with 3.1 to 3.3 mutatis mutandis. 
               
4.2 In the case where a Thai national who has an foreigner spouse, whether legitimate or illegitimate, expends money which forms the community property or the jointly acquired property, as the case may be, for the purpose of purchasing a condominium unit, whether the purchase is made in the name of that Thai national alone or jointly in the name of the foreigner spouse as well, consideration shall principally be made of the foreigner. In this instance, the foreigner must be a foreigner within the meaning of section 19 (1), (2) or (5), as the case may be.  The Thai national spouse is therefore entitled to purchase a condominium unit in accordance with the entitlement of the foreigner spouse and it shall be deemed that such condominium unit is wholly owned by that foreigner because the ownership in a condominium unit is indivisible and governed by section 19 bis. 
              
4.3  In the case where a Thai national who has an foreigner spouse, whether legitimate or illegitimate, applies for permission to accept a gift of a condominium unit, such gift being made with the intention that the property will become the community property or such gift resulting in the foreigner having co-ownership therein, the foreigner spouse of that Thai national must be an foreigner within the meaning of section 19 (1) or (2) and it shall be deemed that the condominium unit is wholly owned by the foreigner and governed by section 19 bis. In contrast, a Thai national who has an foreigner spouse under section 19 (5) is not allowed to accept a transfer of a gift which is made with the intention that the property will become the community property because the case under section 19 (5) is one involving the application by an foreigner for permission to acquire ownership in a condominium unit in a manner of sale, in respect of which payment therefor must be made. 




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