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Land Ownership in Hua Hin

Thai law prohibits any foreign national from owning land. There are ways in which you can structure the purchase so that you are the de-facto owner of the land. The following ways can be used in order to fully comply with Thai law:

Limited Liability Company

This is the most popular route getting your dream home as the Articles of Association can be structured to afford the foreign investor greater protection. Thai law stipulates that the majority of shareholders in a company must be Thai. Any company where over 40% of the shareholding is foreign and the business of the company is land purchase would be investigated by the Central Land Office. This is to ensure that there has been no attempt to get around the ban on foreign ownership. Therefore you are in practice limited to 39%. With a restructured Articles of Association, the foreign shareholder can be the only director of the company and the only officer who can undertake contractual dealings on the company's behalf. This, in effect gives the foreign investor control over the company.

Nominee with Lease and Option to Buy

You can use a Thai Nominee to purchase the house/land and have a 30 year lease with a 30 by 30 year option from the nominee. In order to be enforceable, any lease for a period of longer than three years must be registered, which involves payment of a registration fee and stamp duty based on a percentage of the rental fee for the whole lease term. The original registered lease remains in force and effect even if the property is sold. The drawbacks to a lease include the fact that the parties can contractually agree to renewals, but this right cannot be registered and is not effective against a purchaser of the property, and that the lessee cannot (without the lessor's consent) sublease, sell or transfer his or her interest.

Nominee with Mortgage

You can use a Nominee to purchase the house/land and have a mortgage (registered with the appropriate land department office) on the property in your favour. However, in some circumstances the Thai courts have ruled that this was not a bona fide mortgage, but rather it was a mortgage contrived to circumvent the existing laws of Thailand prohibiting foreign ownership of land. It is important to note that only the owner of the land is entitled to mortgage the land; the lessee of land does not have the same privilege.

Usufruct Interest (Sidhi-kep-kin)

Gives you temporary ownership rights to things on or arising from the land. In practice, a usufruct is limited to a 30 year maximum period; like leases, the agreement can be successively renewed. In contrast to a lease, a usufructury interest can be sold or transferred, although it expires upon the death of the holder of the usufruct and therefore cannot be inherited.

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