Doing Business in Thailand

Thailand foreign land ownership policy is often criticized by foreign buyers and to make their point the critics often refer to other countries in Asia that allows foreign land ownership. The message being Thailand should change its policy and allows foreigners to own land because otherwise Thailand will be at risk to see buyers going to purchase in Asian countries that have more opens policies in this regard. I think that those critics are unfair to Thailand and I will explain why in this post

As you will see below Thailand attitude in relation to foreign land ownership is not different than the policies adopted by its neighbors and in some regards is even better.

In the table that follows I decided to use either the term “Possible” instead of “Yes” when answering to the question whether foreign landownership was allowed in a determined country for reasons I will discuss after the table.

Survey of 13 Asian Countries

Result Summary

Overall the situation in Asian countries is as follows:

(1) Out of 13 countries surveyed, 5 countries do not allow private freehold land ownership at all because this legal concept is unknown to them. Those countries are China, Laos, Hong Kong, Myanmar and Vietnam.

(2) Out of the 7 countries where the principle of freehold ownership is known 3 countries do not allow at all foreign freehold land ownership. Those countries are Cambodia, Indonesia and Philippines.

(3) Foreign freehold land ownership is possible only in five Asian countries that are Korea, Malaysia, Taiwan, Singapore and Thailand.

Qualifying the Results: YES – NO – POSSIBLE

To rank Asian countries policies in relation to foreign landownership was actually a difficult exercise.

In the first draft of the above table to the question “Is foreign landownership allowed in this country” I answered Yes for Korea, Malaysia, Taiwan and Singapore and No for Thailand.

But then when starting to draft the remarks column I realized that:

(1) none of the four countries to which I was giving a Yes mark were actually offering an option of unconditional and unrestricted foreign land ownership, and

(2) while foreign land ownership is in principle prohibited in Thailand, Thailand laws contains a lot of exception to this principle therefore to attribute a No mark for Thailand was not only incorrect but unfair.

My first draft was unfair because Yes is an unconditional affirmative. Answering Yes foreign landownership is possible in Malaysia, Korea, Taiwan and Singapore was not accurate because none of those countries offer unconditional foreign landownership.

In the same way, answering No foreign landownership is not possible in Thailand was not accurate as well because no means not at all and there are many cases where foreign buyers may be allowed to own land freehold in Thailand.

This is why I concluded that the most accurate term to rank Asian countries that allows foreign land ownership was therefore “possible” because possible means that something is likely to happen given the right set of circumstances and it is exactly the purpose of the policies of Asian countries in relation to foreign land ownership, to make it possible providing that a certain set of requirement and conditions is fulfilled.

Explaining the Results

I gave the first place to Malaysia because it seems that Malaysia is open to foreign ownership without condition of reciprocity. For example, a Chinese citizen could buy land in Malaysia even if a Malaysian citizen could not do so in China. But the same Chinese could not do so in Korea or Taiwan because China do not offer reciprocity to Korean and Taiwanese.

Singapore only made it 4 which must surprised a few readers. Yes Singapore allows foreign ownership but if you read the fine prints (i.e the remarks) then you will notice that Singapore requests prior government approval for foreign buyers that want to purchase “restricted properties”. Now if you look at the definition of “restricted properties” it covers all residential properties but condominium.

To sum it up the question of foreign land ownership in Asia and of how to rank Asia country is a little bit like the conundrum of the glass of wine. There are only conjectural answers to the question whether the glass is half full or half empty.

In conclusion Thailand policie is by comparizon to its neighbors not as bad as critics said. Should the foreign community in Thailand make a push to request from the Government that it allows unrestricted foreign residential land ownership? I do not believe so. Firstly because this idea is not popular at all among Thai people and secondly in the current political context it is not the right time for such a move. The issue would become a politicised and the debate would not happen. The right move at this very minute is to push for an extension of the leasehold period as I was explaining in my previous post.

Note: This post is an excerpt of Rene Philippe Dubout: “How to Safely Buy Real Estate In Thailand” second edition to be published in November 2009 (the first edition was published under the name “How to Safely Purchase Real Estate Offshore: The Case of Thailand”).

About the Author:

The author Rene-Philippe DUBOUT is a lawyer since 1990 when he was admitted to Geneva bar (Switzerland). He practiced as a litigator there for 10 years until he moved to Thailand in 1999. In 2002 he founded with a group of Thai lawyers Rene Philippe & Partners Ltd a local law firm that specialized in Cross Borders Investments and Real Estate. He has been lecturing in several Thai Universities and a speaker to numerous conferences and seminars. He is the author of a must read book:”How to Purchase Real Estate Offshore Safely: The Case of Thailand”.

http//:www.renephilippe.com

© Copyrights 2009 – Rene Philippe Dubout – This article may be reprinted if information about the author, the websites, and the URLs remain intact

Originally posted 2009-10-03 04:33:32.

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3. Buying Property: Two issues to consider before buying a land
4. Buying a Condominium: Foreign Freehold Ownership
5. Thailand Property: Land Rights Classification: Minor Claims
6. Buying Land: The Thai spouse right to own land freehold
7. Thailand Property: Land Rights Classification: Major Claims
8. Thailand Property: Difference between condos and apartments