Ownership Structure

Company Ownership of Freehold Property
A Thai Limited Company can purchase land as a juristic person. The company must be allowed to own land and invest in land in accordance with its objectives and Articles of Association. Foreigners can hold a maximum of 49% of the shares in such a Thai Limited Company, the balance must be owned by Thai actual investors. It is also vitally important that annual accounts are completed and taxes paid on time.

Land Title Documents
The preferred land title in Thailand is the Chanote (which literally translates to “Title Deed”) issued in accordance with the Land Act of 1954. Chanotes issued under the provisions of this Act are registered with the Land Department and state the ownership, boundaries, area measurements and encumbrances (such as mortgages or servitudes) with particularity. The purchaser of a Chanote is registered as the owner of the land with the Land Department at the time of transfer.

Transfer of Ownership
Ownership of land and/or structure is transferred by a written registration at the authorised Land Department. The transaction is recorded on the title deed and/or other documents. All supporting documents are kept in official records. In general, the current fee and taxes applicable too and payable upon the registration of ownership of immovable property are as follows: 1)

Transfer fee:
2% of the land office appraised value.

2) Income Tax (payable as withholding tax):
1% of the land office appraised or the actual transaction value of the property (whichever is higher) if the Seller is a juristic person. This is a withholding tax and it is credited to (i.e. deducted from) the company’s income tax payable for that year. An incrementally applied personal income tax sliding scale from 0% – 37% based on the land office appraised value of the property and a rather complicated calculation, if the seller is an individual.

3) Stamp Duty or Specific Business Tax/Local Development Tax:
Stamp Duty: 0.5% of the land office appraised or the actual transaction value of the property (whichever is higher).

Property Taxation
Building and Land Tax is imposed on the owners of a house, building, structure and/or land except for the first residential place. The tax rate is 12.5% of actual or assessed annual rental value of the property. The annual value is the amount a property may reasonably gain in rent for one year, if the property is offered for lease.