Around the globe, real estate investment is seen as the most stable and profitable. This is especially true over a long period of time. Thailand is no exception. It has been called a little piece of paradise on Earth by all who have visited. We can also say, however, that Thailand’s economy ranks among the most stable of all Asian nations. It is a dream of many to own a piece in this paradise and live there, but it’s not easy to achieve. The first problem is that foreigners cannot directly buy and own land in Thailand. Is there a way, other than a long-term lease, to own a plot of property and build the house of your dreams on it? Yes. See how you can do it and what to watch out for to avoid making mistakes. Read more now on Phuket property
There are many different estate “titles”, such as Sor Kor 1 and Tor Bor Tor 6. However, most of them are simply a form of squatter’s claim that has been filed at the district office. A small fee is paid. Always pay attention to the land title deeds. Negotiations can be conducted if the seller of a land plot has a Chanote title. Land plots with Chanote title have precise boundaries that are registered at Land Office. They also feature unique markers in the ground, and plotted according to a national surveying grid. Only Chanote gives you complete ownership of your land.
Many land plots are designated by “Nor Sor 3”, or more recently “Nor Sor 3 Go”. You can own land that has boundaries that are almost determined, but not full ownership. Land Department may not have marked the plot boundaries yet. They are determined by the neighboring plot boundaries and could not be entirely accurate. It could cause future problems. Nor Sor 3Gor gives the right to sell or use the land, but its owner must give a 30-day public notice before selling. The deal can be completed if there are no objections.
As we all know, according to Thai Law, a foreigner cannot be the owner. What can we do? You can buy property in Thailand by registering your own Thai company. Limited Liability Company is the most common form of registration for foreign-owned companies. In Thailand, it isn’t difficult to establish a company that has foreign investment. It costs between 1,800 and 3,000 US dollars, with annual operating costs of approximately 1.000 to 1,500. As a foreigner, you cannot own more than 49% shares of the company. The remaining 51% must be owned by Thai citizens. According to law, there must be a minimum of three shareholders. At least one shareholder must be a Thai citizen.
You may feel uneasy about such a setup, but you actually have control over the assets and activities of your company. It is done by giving your 49% shares a privileged status, which gives you one vote per share. Your Thai partners who hold ordinary shares get one vote per 10 shares. You are therefore not restricted in any way to the control of all assets and financial operations of the company. This includes land plots registered under your company name.
You can lease this plot in order to strengthen your position. Your plot can also be mortgaged to you on behalf of your company. In this situation, a plot is mortgaged by a foreigner to serve as payment security for a loan given to a Thai legal or private person. The registration fee for this transaction is 1% of what was stated in the mortgage bond agreement. This payment is due at the time you register this mortgage. The two methods above will give you greater legal protection for your investment.
In general, during the land sale process two documents are produced. First, a land plot purchase agreement is created directly during the transaction and signed by buyer, seller, and witnesses. The contract contains the price, the payment terms, and the schedule of payments, along with all other necessary terms and conditions. This contract is typically made by an experienced real estate agent or a lawyer. The official title deed is issued by the Land Department Office after all payments are settled and the transaction has been registered.