In general, an alien may hire land in Thailand as provided by the Civil and Commercial Code and the contract of hire cannot exceed thirty years thereof. Once the contract comes to an end, it can be renewed, but it must not exceed thirty years from the date of renewal.

                             Later and according to the Government policy focusing on boosting industrial and commercial investment, the Hire of Immovable Property for Commerce and Industry Act B.E. 2542 was enacted and subsequently put into force on May 19^th, 1999. The Act aims at providing specific rules and conditions in respect of the hire of immovable property for commercial and industrial purposes whereby an alien can choose either from hiring land not exceeding one hundred rai or more than one hundred rai. Provided that the following rules for hiring land not exceeding one hundred rai must be satisfied:

                             1.  The duration of a hire of immovable property shall exceed thirty years but not exceed fifty years. In this instance, the letter and the hirer may make an agreement to renew the contract but it shall not exceed fifty years from the day the agreement is made;

                             2.  The contract of hire shall be made in writing and registered by the competent official;

                             3.  The letter shall have possession in such immovable property;

                             4.  The right of hire can be used as suretyship for performance of obligation by mortgage;

                             5.  The right and duties of hire are devolvable upon the heir and the hirer can sublet or transfer his right of hire to a third person unless otherwise provided by the contract of hire;

                             6.  Immovable property to be hire registered by the competent official under this Act shall be located in either area of the followings;

                                       6.1  the area specified by the law on Town and Country Planning as for commercial or industrial purpose,

                                       6.2  the industrial estate zone provided by the law on Industrial Estate of Thailand,

                             7.  A commerce or industry applied for a registration of hire shall obtain, prior to the registration, either of the following appearances;

                                       7.1  Being a commerce with an investment cost not less than Baht twenty million;

                                       7.2  Being an industry that is eligible to be granted a certificate of investment promotion under the law on Investment Promotion;

                                       7.3  Being a commerce or industry which benefits the economic and social of the country as declared by the Minister of Ministry of Interior and endorsed by the cabinet.

                             8.  The type of commerce or industry whereby an alien can apply for registration must be a commerce or industry upon which an alien can make business under the law on Business Operation of an Alien.

In the case of hiring the land more that one hundred rai, besides the satisfaction of the aforementioned rules, either of the following rules must also be met:

                             1.  The operation of such commerce or industry shall add value to an exportation or support employment in the country;

                             2.  Such operation shall never be operated in the Kingdom, unless otherwise inadequate;

                             3.  Such operation shall incorporate state of the art production process or technology development;

                             4.  Being in high benefit to the country’s economic and social as declared by the minister of Ministry of Interior and endorsed by the cabinet;

                             5.  In the case where an alien is a hirer, sub-hirer or a transferee of the right of hire, an investment in an operation of such commerce or industry shall not be less than Baht one hundred million excluding the cost of hire. Also, the total amount of money invested shall be foreign exchange brought into the Kingdom or withdrawn from the foreign currency deposit account or withdrawn from the non-resident Baht account.

Source: http://www.dol.go.th/guide/alien_commerce_eng.htm

BUYING LAND AND HOMES IN THAILAND

Most foreigners are not able to buy land in their own name in Thailand; however foreigners are permitted to legally own the homes and/or structures on their "owned" or leased land. Basically, there are three solutions which foreigners undertake to "own" land, homes and businesses in Thailand:

Long Term Lease

A foreigner may lease land and leases can be registered in the local government land office (deeds office) giving secure title. The maximum lease period allowed is 30 years but the there are some provisions for an additional 30 year term providing the legal framework is correct.
For the most part developers offer pre-paid 30 year (plus options to renew for 30 years plus another 30 years) leases. The "pre-paid" rent is normally the same as a freehold or condominium purchase price but the lessee has some risk with regards to the renewal of the lease and assuring the lease is a straightforward purchase contract regulated by law.
According to www.property-report.com:

• Developers sometimes choose leases not to deliberately erode these rights (of the buyer) but because of a tax benefit of declaring rental income as opposed to lump sum payments. However, if a lease is unfair it could appear to a buyer or a buyer's lawyer that the lease is being used as an instrument for the developer/seller to take complete control of the basis on which a 'lessee', even a 30+30+30 year lessee, occupies.
  Sometimes when a developer has actually taken a lease of a building for an owner and sub-leases long 30+30+30 year leases, the risk for the renewal and termination is passed onto the sub-lessee so that if the developer's lease is terminated and it is the fault of the developer landlord by a breach of its head lease - all of the sub-lessees leases are terminated and their monies forfeit without recourse. There are commercial leases in premium projects containing such provisions.

  Some examples where a lease can undermine rights that a freehold or condominium purchaser would expect to automatically possess:

• Leases do not have to stipulate any prescribed period for structural or non-structural defects liability. In most leases this would be tempered by the fact that the landlord is obliged to repair damage other than normal wear and tear. In a long-lease situation the landlord's repair obligation is omitted but there may also be no defects protection at all.

• Leases often have termination provisions which allow 30 day or similar termination for lessee's breach during the entire term of the lease (30+30+30). After a 'lessee' has paid all of the rent for 30+30+30 years there seems to be no reasonable basis for such termination provisions. A condominium or freehold purchase cannot have its title 'seized' by a developer after the monies have been paid and title has been transferred. If the same person signs a lease they could, at any time for a technical breach, lose their home/rental income and all monies invested.
  It would seem that for pre-paid leases termination should only be possible in respect of non-payment of rent (i.e. during the construction phase in an off-plan purchase).

• Short term leases would contain strong sanctions available to the landlord in the event of non-payment of rent, utilities or other charges including termination and the cutting off of private utilities (maybe a water well) and the denying of access to the property (possible in a leasehold situation). Long terms leases often involve owners who are absent for long periods of time who leave matters such as utility payments to a property management company. It would be a shock for an absentee lessee to find the lease has been terminated or to be denied access to the property for such a breach but technically this is possible under many long term leases in existence.

A foreigner may set up a Thai company that is then able to purchase land. This is a common way to purchase, but there are some subtle legal issues involved that are best dealt with by professionals. The most common way results in the foreigner owning 49% shares in the new company with his Thai 'partners' owning 51%.

Unfortunately, company creation costs add to the investment, and professionals must be paid to prepare and submit ongoing tax returns and other bureaucratic requirements. On the other hand, such a company may be an ideal vehicle for getting a work permit for persons who wish to relocate to Thailand and work here.

INVESTING IN KO LANTA

Ko Lanta has increased in popularity over the past 10 years, and the type of visitors has changed during this period from back packers, to families and professionals. Backpacker resorts on beachside land which were small and primitive are upgrading or being replaced with resorts offering better facilities and charging higher prices.

Together with large increases in the number of visitors (estimated at 300,000+ annually) has created a strong demand for land which has seen land prices increase very quickly and availability drop. As Ko Lanta has become one of the 'hottest' destinations in Asia, investors from all over Thailand are streaming in looking for land to build resorts.

Another trend is reflected in the increasing size of pieces of land now for sale. A few years ago when demand was low, it was possible to buy a few Rai on the beach. Owners soon discovered that the leftover land was difficult to sell. Now the land from the beach to the roadway, and sometimes behind it is being consolidated and offered for sale as one unit at the same high beachfront price. Clients are sometimes shocked that land has increased by 10 - 30% in price over just a few months, but it is common here for land prices to be reviewed often.

INVESTING IN LAND

Land in Ko Lanta is an excellent investment. Prices are climbing quickly and almost any land will increase in value at a rate not to be found in western economies.

There are techniques that can make investment in Thailand extremely tax efficient. We are able to refer clients to expert tax advisors for specific advice relating to your nationality and tax position.

LAND PRICES

In six years we have watched prime beachfront land increase in price from 800,000 Baht to 4.5 to 10 million Baht per Rai. By next year we could see this climb to prices similar to the prime properties on Phuket and Ko Samui.

Beachfront land further from the ferry piers or on poor or rocky beaches can range down to 1.8 or 4 million Baht per Rai. Very large pieces of land that include beachfront and land some distance from the beach may be sold for even lower prices.

Small pieces of land are generally more expensive than larger pieces. Roadside land has increased sharply in value over the past two years. Mountain side land with sea view varies in price depending on the steepness, quality of the view, distance from the beach, availability of road access and distance from the nearest electricity supply.

CONSTRUCTION COSTS

Due to the ferry costs and weight restrictions, building materials typically cost 30 - 40% more on KohLanta than on the mainland. If you are building on the southern half of the island or on a steep slope with no paved roads, these prices may increase by a further 30% or even more.

Currently the average cost of constructing a villa or condominium in KoLanta is 20,000 to 60,000 baht a square meter excluding land. Inflation is at 5.7% now it's bound to continue rising.

TITLE DEEDS & DUE DILIGENCE

There are many types of title deeds in Thailand. There are only two types of title deeds that are acceptable for foreigners: The Channot document or the Nosso Sarm (3) document. It is extremely important that you employ professionals to check title deeds for validity, liens, registered rental contracts and other possible problems.

It is also essential to have the land surveyed and to have the boundaries marked out by a land surveyor. The size and dimensions of land stated on title deeds often varies significantly with the reality. This may be due to road construction, government actions, inaccuracies and border disputes. This is especially important as all contracts and documentation is in Thai.

RESIDENCE AND WORK PERMITS

It is not necessary to obtain residence or work permits if you do not intend to work in Thailand. Many foreigners live here for many years on tourist visas, and there are limited restrictions on this practice. If you intend working and earning money in Thailand for work done here then it is best to take professional advice regarding the application for a work permit.

It is also possible to apply for various types of non-tourist visas and residence permits Thailand has recently introduced new regulations to make it easier for non-working people of means to reside in Thailand for long periods.