Alternative Legal Mechanism to circumvent Legal  Restrictions of the Thai Land Code
By Porthep Werachaon

Some advisors mostly with non-legal background may advise you to easily circumvent the restrictions imposed by the Land Code by: –

1)      Setting up a Thai limited company with a Thai majority of 51%

2)      Appointing a Thai nominee and having a 30-year lease agreement or mortgage or right of habitation registered with the Land Office

3)      Having a Thai legitimate wife whereby the foreign husband can have the ownership of land with the registered right of habitation for life with maximum of 30 years


Please be advised that the above practice is against the restriction of   the Land Code that foreigner cannot have the ownership through a Thai nominee. The fabricated juristic act between the related parties may be challenged and nullified for violation of the Land Code unless you prove that the transaction are justifiable with a good faith.

Setting Up a Thai Company

In case of setting up a company, you have to justify the transaction of money remittance into the Kingdom and the payment process of capitalization. It is contradiction, if you hold only 49% of shares, but you transfer money to pay for the whole shares.

The Anti Money Laundering Act will be applicable for the unjustifiable transaction or the transaction with value from 2 millions bath must be reported to the Anti Money Laundering Board to control the regularity.

Thai laws do not accept a dormant or passive company without any business activities.

You have to ensure that all the monthly and annual tax compliances are fulfilled and also the financial statements or balance sheet at the end of the year.

After three years of dormant status, the IRS may inspect the business activities.

Some foreigners are advised to use Thai nominee shareholders, it is not easy to absolutely control even you hold blank share transfer deeds of your nominees. These documents may be challenged for the legal validity in many respects.

One day they may jointly vote against you and get you out from the Board of Directors and dissolve the Company.

The legal mechanism of setting up a company to own the land is advisable only for the active company who will really run the business otherwise it will be burdensome for you to comply with all authoritative requirements.

Having a Thai Nominee

This legal mechanism is absolutely against the law with the punishment of both fine and imprisonment. The fabricated agreement can be challenged and nullified for violation of the Land Code.

Some foreigners are advised to have a mortgage or 30-year lease or right of habitation registered with the Land Office. There are many issues you should carefully verify to prevent the legal exposure.

Having a nominee whom you do not really know is very dangerous. The nominees should be at least your concubine who lives with you for certain period or has children with you.

Having Thai Wife

Thai wife in this case means “legitimate wife” or “spouse” with whom you registered the marriage which can be either in Thailand or aboard.

Since 1999, Thai women married foreigners have been entitled to ownership of land. However, a wife and her foreign husband have to declare with the land registrar that the money to buy the land is her own money not from her husband. As a legal consequence, the land bought accordingly will not be a marital property whereby the husband cannot share 50% as the common property. In case of separation or divorce, the foreign husband will not have the part of land.

However, foreign husband can have the ownership of house and building. If the house is built up on the empty piece of land, the husband should register the habitation right with the Land Office and request for the construction permit under his name. The foreign husband can request the district office to issue him a Yellow Book of House Registration Certificate (Thor.Ror.13), which is exclusively for foreigners. In this case, the foreign husband is not required to have permanent residency in Thailand. He can have only Family or Retirement Visa or even Non Immigrant “O” or “B”.

To safeguard the foreign husband, the Thai wife can have a will and testament to bequeath her husband. This legal mechanism is advisable only for the real wife and husband.

If you have good faith and justifiable transaction, you will be definitely protected by law.

The package of happiness is not similar to the instance noodle you may have anytime.

“Ignorance of what you should know is not the excuse by law”