Owning Land in Krabi
Thai Law is very strict when it comes to foreign ownership of land in Thailand, and as a matter of fact, ownership of land by foreigners is very tightly controlled and generally prohibited. However, there are some exceptions and remedies.
In recent years, and despite the consistent strength of the Thai Baht, Thailand has become one of the most desirable countries in which to buy a holiday home and/or invest for rental purposes. Thailand is a democratic country and has remained stable in the last few decades despite some political upheavals. Generally speaking, Thailand can be considered a safe country in which to live or invest, and many foreigners have chosen to make Thailand their home away from home.
According to section 86 of the land act, foreigners are allowed to own land only where authorized to do so by the Thai Board of Investment (B.O.I.)
However, a condition of ownership is that the land be used only for the purposes of carrying out its business objectives. The land purchase must also be approved for its intended use by the Board of Investment to ensure compliance with Thai Laws.
It is also possible to own land In Krabi provided that the foreigner brings with him to Thailand an investment sum of at least 40 million THB.
There are some conditions imposed when doing this:
Condition 1: The owner of the land will only be permitted to use the land for residential purposes, and will be restricted to ownership of a maximum area of 1 Rai (1,600 sq.m.)
Condition 1: The owner must demonstrate that his investment capital has been maintained for a period of not less than 5 years.
If the investment is withdrawn or pre-terminated, then notice must be given in writing to the relevant authority within 60 days.
The property may be sold at any time, but it is important to know that property owned by a foreigner is not transferable through inheritance as it may be in other parts of the world. Under any circumstances when owning any kind of land or property in Thailand, provisions should be set in place for the unfortunate event of death, and advice should be sought from a specialist lawyer with regard to this.
Another exception to the limitations imposed on foreigners buying land or houses in Thailand is through the use of a Thai Limited Company. This method of owning property is widely used among foreigners wishing to acquire property in Thailand.
The basics of this method are that a foreigner will set up a Thai Company which will hold ownership title to the land or property, and the owner will then effectively rent the property from his own company. The only drawback to using this method is that the company must always remain trading as a company, and in doing so a work permit will be required, along with salaries and taxes for the owner and a minimum of 4 Thai employees, and their national insurance payments.
This method does result in some expenses for the company, but in doing so, all legal requirements are met and ownership is assured.
In owning a Thai company, it is important to understand that technically, a foreigner may only own shares to a maximum of 39% and the total foreign ownership of a given company cannot exceed 49%. However, this does not prevent the foreign owner from maintaining total control of a company.
Nor Sor 3: This is the lowest land title which allows for legally building a property, but is not ideal as the land is measured approximately. There are no markers to indicate the boundaries of the land.
Nor Sor 3 Gor: This land has been measured using aerial survey to set the points and land area. The land can be sub-divided into separate plots.
Chanot (land title deed): This land has been accurately measured using GPS to set the area and boundaries of the land. The boundaries of the land are indicated by numbered posts.
Land Measurement Table:
1 Rai = 40x40m = 1,600 m2 = 17,224 sq.ft. = 0.395 acre
1 Ngarn = 20x20m = 400 m2 = 4,306 sq.ft. = 100 Wah
1 Hong = 5x20m = 100 m2 = 1,076 sq.ft.
1 Tarang Wah = 2x2m = 4 m2 = 43 sq.ft.
1 sq. wah = 4 sq. m.
1 acre = 2.471 rai or 43,560 sq. ft.
1 hectare = 6.25 rai or 10,000 sq. m.