Short Title 1

Foreign Ownership of Real Property in Thailand.

There has been increasing interest that the Thailand government may ease the restrictions on foreign ownership of land in Thailand. Pending such rule change, this news considers the current restrictions and the scope for foreign participation in the Thai real estate market presently permitted by Thai law.

Under the Thai Land Code, "foreign" ownership is considered ownership by any foreign individual or company. The following Thai entities are also deemed to be "foreign":

(a) a Thai company (whether public or private) in which either (i) at least one half of the total registered capital of the entity is held by foreign individuals or companies or (ii) at least one half of the total number of shareholders are foreign individuals or companies.

(b) a Thai limited or registered partnership where a foreign individual or company is the managing partner or manager.Direct Ownership

The history is that, foreign investors could own land in Thailand if their country had signed a bilateral treaty with Thailand permitting such real estate investment. Presently, all such bilateral treaties have expired and only foreign investors who had already acquired their land prior to the expiry of the relevant treaty may continue to own such land with risk to the local partner only.

Short Title 2

Many foreign investors are allowed to own a unit in a condominium, provided that the total foreign ownership of the building in question does not exceed 40% of the total units in the condominium. The foreign investors which are entitled to condominium ownership under this rule are:

(1) foreign investors permitted to reside permanently in Thailand under the Immigration Act;

(2) foreign investors permitted to enter Thailand under the Investment Promotion Act;

(3) the Thai entities set out above (see introduction) which are deemed to be "foreign" investors;

(4) foreign entities that are granted a certificate of promotion under the Investment Promotion Act;

(5) other foreign investors, both natural and juristic persons, who have brought foreign currency into Thailand to purchase condominium units.Industrial land