Measures to prevent the use of Thai nominees by foreigners to own land in Thailand

In general, foreigners are not permitted to acquire land in Thailand unless they comply with the rules and conditions of exception specified in The Land Code of Thailand. Only Thai individuals and juristic persons are allowed to purchase and own land in the country.

The same restriction applies to foreign companies in Thailand. A company is considered a “Foreign Company” if the number of shares held by foreigners is 50% or more of the total number of shares. However, many foreigners try to go around the law by having Thai nominee shareholders hold 51% of the company’s shares on their behalf in order to say that their company is indeed a “Thai Company” which will then enable them to purchase land under the name of this Thai company.

As a way to eliminate this illegal practice, the competent officials have imposed more measures to prevent the foreigners from breaking the Land Law. These certain measures are as follows:-

  1. If the competent land officer believes that Thai shareholders holding 51% shares are just nominees to hold the shares on behalf of foreigners, they will investigate and require for more information and necessary documents such as the income statement and the occupation/employment documents of those Thai shareholders.
  2. Moreover, the competent land officer has the right to ask for evidence showing the source of the money which is used to purchase the shares of the company and require related legal documents (if any).
  3. In case the Thai company has purchased the land at the price higher than its registered capital without the mortgage registration, the company shall have to provide the evidence showing the source of the money used to purchase the land.

Doing business in Thailand is much easier if investors abide by Thai laws. Only Thai nationalities can own land in Thailand but there are also certain investment privileges for foreigners to help them acquire land for business purposes. Contact ThaiLawyers to know about the options on how you can set up your business in Thailand.