“PROXY OR NOMINEE”PROPERTY PURCHASE

“PROXY OR NOMINEE”
PROPERTY PURCHASE
POLICIES CLARIFIED
BY GOVERNMENT
Thai laws are explicit about foreign property
ownership.
A foreign individual, foreign entity or a Thai
company with more than 49% of its shares held
by foreigners cannot own land in Thailand,
except for investments under the Investment
Promotion Act, Industrial Estate Authority of
Thailand Act or regulated property funds.
These exceptions benefit foreign direct investment
and were intended mainly to promote the
country’s economy. To enjoy these benefits,
foreign investors must meet multiple requirements
set out by relevant legislation and
undergo strict scrutiny from authorities.
Dussadee Rattanopas, Cynthia Pornavalai
Some foreigners have attempted to circumvent
Thai land ownership laws through legal arrangements
such as establishing Thai entities wherein
they own part of the shares and induce Thai
nationals to act as nominees (holding more than
51% or more of the company’s shares without
true control). This practice has become common
in Thailand. Land officials accepted these
arrangements and created no impediments for
transferring land to such companies.
However, on May 15, 2006, the Ministry of
Interior issued a policy to all provincial governors
regarding the avoidance of foreign land ownership
laws. The policy sought to prevent the
Cynthia Pornavalai