Acquisition of Land by Alien

According to Section 86 of the Land Code, an alien 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 an alien 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, an alien 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. an alien, 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 an alien, 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 an alien, 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 alien 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.
An alien whose spouse is a Thai national either legitimate or illegitimate, that Thai national can purchase land but the alien 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

Legal Affairs Division
Department of Land

Acquisition of Condominium Unit by Alien

Previously, an alien 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 an alien in the purchase of condominium unit. As such, an alien 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 an alien 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 Ciity;
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 alien 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 alien 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 alien in a condominium unit in a higher proportion than forty nine percent shall take effect. After that it shall be repealed, and the alien obtaining an ownership in this regard and the alien 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.

Hire of Immovable Property for Commerce and Industry by Alien

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 19th, 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.

The Acquisition of Land for Residential Purpose by Aliens

An alien bringing money not less than Baht forty million as specified in the Ministerial Regulation into the Kingdom for investment may apply for acquisition of land for residential purpose not more than one rai in area, provided also 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 as follows:

1. In the case of an alien, who brings money for investment and wishes to apply for permission to acquire land for residential purpose, shall lodge an application (Alien 4 Form) to the competent official under section 71 of the Land Code together with the following documents:

1.1 An alien identification card issued by the Police Station in whose
jurisdiction the alien is domiciled or a certificate of residence issued by the Immigration Division, National Bureau of the Royal Thai Police Force or a passport indicating the nationality of the alien;

1.2 Evidences of an investment in the business or activity that falls under Ministerial Regulation prescribing rules, procedures and conditions concerning the acquisition of Land for residential purpose by aliens B.E. 2545:

1.2.1 Letter of investment confirmation from bond seller and bonds of
Thai Government, bonds of Bangkok of Thailand, bonds of State Enterprise or bonds which the Ministry of Finance secures the capital or interest;

1.2.2 Letter from the Asset Management Company confirming that an alien has invested in property mutual fund, property mutual fund or mutual fund for resolving financial institution problems established under the law on Securities and Stock Exchange, and an evidence of investment in such fund;

1.2.3 Evidences concerning investment in share capital of a juristic person who is granted promotion of investment under the law on promotion of investment, certificate of registration as a juristic person, name list of the juristic person’s share holders, and a certificate indicating that such juristic person is granted promotion of investment from the Board of Investment;

1.2.4 Evidences of engagement in an activity that entitles for being granted promotion of investment under the law on promotion of investment according to the announcement made by the Board of Investment, certificate of registration as a juristic person, name list of the juristic person’s share holders, and the Board of Investment’s letter indicating that an activity being operated entitles for being granted promotion of investment.
The evidences mentioned in para. 1.2.1 to 1.2.4 either the evidence in one para. or one combines with the other(s) can be used but the total amount shall be not less than Baht forty million.

1.3 Evidences of bringing a foreign currency into the Kingdom or the withdrawal of themoney from a foreign currency account or from a non-resident Baht account for investment.
Either one or more of the above mentioned evidences can be used but the total amount shall be not less than Baht forty million.

1.4 In the case of the land to be acquired is not located in Bangkok Metropolis, Pattaya City or Tessaban (Municipality); the letter of confirmation from the Provincial Office of Town and Country Planning is required certifying that the land to be acquired is located within a residential zone under the law on Town Planning.

1.5 Letter of Ministry of Defense or of the agency concerned confirming that such land is not located in a military safety zone under the law on Military Safety Zone.

1.6 The sketchy map showing the location of land seeking for permission.

1.7 In the case where an applicant has already had right on land by
the time the application is being lodged, an applicant shall produce such land right document;

2. A person who is granted permission shall maintain the investment period not
less than five years. He/she is required to produce the evidence of possession in the investment in 1.2 as the case may be as current, which shall be not less than Baht forty million, to the competent official according to section 71 once a year, on five consecutive years and each year shall be no later than the date making the acquisition registration of the aforementioned land.

3. A person who is granted permission shall utilized such land for a residential
purpose of his/herself and the family in a way that is not contrary to the local custom or good living of the local community.

4. A person who is granted permission shall inform such land utilization for a
residential purpose to the competent official of land office according to section 71 within sixty days as from the date of utilization.

5. A person who is granted permission shall facilitate the competent official supervising the use of such land to ensure that the utilization is in accordance with rules and conditions prescribed in the law once he/she receives a written notifications from the competent official under section 71.

6. If a person granted permission withdraws an investment in the business or activity before
the due date of investment in 2, he/she shall inform in writing to the competent official according to section 71 within sixty days as from the date of making the withdrawal.

7. A person granted permission shall utilize such land for residential purpose within two
years as from the date of the land acquisition registration.

8. If a person granted permission does not comply with the rules and conditions in 2-6, the Director General shall have the power to order such person to dispose of the land in a portion of his possession within the period of 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. Also, if the person does not comply with the condition in 7, the Director General shall have the power to dispose of such land.

9. Any foreign language document shall be translated into Thai language. The
translation shall be certified according to the Ministerial Regulations (B.E. 2540) issued under the Purview of Administrative Procedure Act B.E. 2539. (Phraratchabunyat Vithipratibut Ratchakarn Thangpokkhrong B.E. 2539)

10. In the case of a person bringing money into the Kingdom to the amount of Baht forty million for investment and has bought the land less than 1 rai, if later and within the period of investment, that person wishes to buy additional land, in this instance, the documents attached to the current investment can be used along with the application for acquisition of the additional land.