People interested in a Phuket property investment are likely to be overwhelmed when it comes to owning property as a foreigner in Thailand. While the spectrum may be very broad, as long as you have a good legal team to answer your questions, the process can actually be seamless.
Harwell Legal International is Thailand’s premier international law firm located on the island of Phuket. We offer comprehensive legal services to foreign and local clients.
The professional team at Harwell Legal International will put your needs first. We ensure that you will feel secure knowing that you are dealing with a professional team of lawyers. We will also be there throughout the duration of the buying process.
Our team at Harwell Legal International has put together a description of highly popular, legal ways for foreigners to own property in Thailand.
The Appeal of Freehold Condominiums
Freehold condominiums are popular in Thailand, and the easiest way for a foreigner to own property in Thailand. The Thai law is straightforward and states that up to 49% of the unit area of any freehold condominium is possible to be owned by foreigners.
As long as the Thai-owned percentage within a given freehold condominium development is maintained, a condominium unit can be fully, and most importantly, legally in the name of a foreigner. For a foreigner, this means permanent ownership forever until the owner perhaps chooses to sell the freehold condominium unit.
An interesting detail to note is that when a foreigners purchases a condominium unit, the title includes a “fractional interest” in the building and within all of its common areas. Essentially, this means that your client will own a small piece of the car park, the gardens, the swimming pool and even the reception area! Additionally, the fractional ownership interest represents said client’s share of the vote in the condominium’s owners association.
How about Condotels or Hotel-Licensed Condominiums?
Condotels are quite interesting. They combine the overall services of a hotel with the legal structure of a condominium. Condotels offer a sound investment opportunity and are ideal as it’s possible for an investor to buy individual properties and then rent those same properties out as a hotel.
A Condotel owner is generally given a certain number of days to use their unit each year, and that number often falls between 2 weeks or 1 month. Throughout the rest of the year, the property is rented out by the hotel.
Investing in Condotels is lucrative as it tends to offer a guaranteed rental return. Often times, a Condotel is put into a rental pool which allows all owners to offer their units for rental, and when the income is received, each individual shares the profits.
A Condotel has both a condominium and a hotel license, which means units can be easily rented out on a daily or weekly basis. As companies like Airbnb continue to grow, the ability to offer short-term rental is an attractive feature for foreign investors.
The Luxurious Advantages of Branded Residences
Branded Residences are considered luxury properties. While the realm is likely to include villas, there is a large variety of developments in Phuket that have been established as luxury condominiums. This actually means that the dynamic of 51% Thai-49% Foreigner ownership must apply. Essentially, foreigners can buy units in branded residences and own them as freehold.
Branded Residences are appealing because the owner knows exactly what they are buying in terms of design, fixtures, and finishings. Everything is extremely high quality, and the interiors illuminate luxury.
High net worth investors tend to seek out branded residences as the property is resort managed, and oftentimes offers the option to use the rental pool in the case that the owner is not living on-site. Additionally, branded residences offer up the utmost in high-quality service, much like that of a 5-star hotel.
Different Ways to Purchase Property as a Foreigner in Thailand
There is a myriad of ways to legally purchase property as a foreigner in Thailand. Here, we outline some of the most popular ways to invest in the property of your dreams.
Buying a Condo Through an Offshore Company allows for succession planning, and is ideal as offshore companies continue to thrive. This makes such things as inheritance planning seamless due to the fact that the person who controls the company shares also effectively owns the condo. In the event that you wish to sell the condo, it is easy to transfer the shares to a new owner.
Landed Property refers not only to the actual land, such as the soil and rock but to land with a building sitting on top of it. Thailand forbids foreigners to own actual land, so therefore it is easier for a foreigner to enlist in the help of a law firm and set up a Thai Company Ltd. However, it’s important that the company is a legitimate business. The company must generate revenue and also have a list of Thai shareholders. The Thai shareholders must be legitimate investors and as a foreigner, it is only possible to own 49% of the shares.
Leasehold is an arrangement that allows foreigners to own the actual building while leasing the land. The lease will not be over 30 years and gives the foreigner “exclusive possession” as a home or rental property throughout the duration of the lease. All leases must be registered at the Land Office, where upon completion the lease agreement is viewed as a lien against the title deed. Developers tend to have clauses that effectively extend the leasehold until 90 years.
Another option is to Own the Building, Lease the Land which gives foreigners the opportunity to own the building but lease the land it sits on from a freeholder. While the freeholder may be an individual or a company, in most cases, it is the developer. Since the restriction on land ownership doesn’t apply to build ownership, many foreigners take out a 30-year lease on a plot of land and then build a dream property on the land.
Secured Leases allow the foreigner to commit to a lease while subsequently signing a sale and purchase agreement with the legitimate Thai company of the developer. Generally, a Thai company is developing a property that is being leased to the foreigner through an offshore company, allowing them to own the shares. This is a good long-term investment and one that allows for special rights such as voting power.
Let’s Own Property in Thailand
If you are considering purchasing an investment property in Thailand, it is best to consult with a reputable team of lawyers prior to the investment. Harwell Legal International is home to a team of highly skilled lawyers. Based on the island of Phuket, we have vast experience in helping foreigners who are looking to own property in Thailand.
To learn more about our legal services, or to schedule a consultation, please feel free to reach out via email at firstname.lastname@example.org
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