Editorial
DBD Landholding Probe: Thai Company vs Condo for Foreign Buyers
By THAI.ESTATE Editorial Team14 min read
Foreign buyers considering land-linked property in Thailand face a concrete legal divide in 2026. The Department of Business Development (DBD) is actively investigating 36,277 foreign-linked landholding companies nationwide to identify illegal nominee arrangements. At the same time, foreign demand for condominiums is rising fast - foreign buyers accounted for 32% of central Bangkok condo purchases in 2026, up from an average of 18% between 2021 and 2025, per The Nation Thailand, August 2026. Understanding why these two purchase routes carry very different legal risk is the most important step you can take before committing funds in Thailand.
The short answer is this: a condominium unit held under the Condominium Act gives you a direct, registered freehold title as a foreign individual. A residential property held through a Thai company does not give you freehold ownership - it gives you control of a company that owns land, a structure Thai law has always treated with suspicion and is now scrutinizing at scale. The DBD investigation is not a future risk. It is active enforcement, and it changes the cost-benefit calculation for the company route decisively.
Quick answer
- The DBD is investigating 36,277 foreign-linked landholding companies as of August 2026, checking whether Thai shareholders genuinely invested their own money or acted as nominees for foreign capital.
- 31,516 of those firms have foreign ownership at 49% or below - the typical nominee structure used to give foreigners effective control of land.
- If nominee arrangements are confirmed, penalties include imprisonment of up to 3 years, fines of THB 100,000 to 1,000,000, and forced disposal of the land asset.
- Condominiums are reviewed in a separate category of 2,120 records under the Condominium Act; the legal exposure is structurally lower because foreign individual ownership is explicitly permitted up to 49% of a building's total floor area.
- Foreign condo demand is rising sharply: 67% of Phuket condo purchases in H1 2026 were by foreign buyers, per The Nation Thailand, August 2026.
- The company-versus-condo decision is permanent at the point of purchase. Switching structure later is expensive, legally complex, and not always possible.
Options and scenarios
Option 1: Freehold condo unit under the Condominium Act
The Condominium Act (B.E. 2522, last amended B.E. 2565) is the only Thai law that grants a foreign individual direct freehold ownership of real property in Thailand. You hold a chanote (full title deed, formally called 'Nor Sor 4 Jor') in your own name. There is no company, no Thai nominee, and no nominee risk.
The legal ceiling is 49% of the total floor area of any registered condominium building. In buildings where foreign ownership has already reached 49%, you cannot buy in the foreign quota. You can sometimes buy in the Thai quota but will face restrictions on resale and on remitting proceeds abroad.
To qualify for foreign quota, you must bring funds into Thailand from abroad and convert them to Thai baht. The receiving bank issues a Foreign Exchange Transaction form (FET) - a document that proves the foreign origin of the funds. Without a valid FET for the full purchase price, the Land Department will not register the title in a foreign name. The FET is not optional and cannot be reconstructed after the fact if the wire transfer was coded incorrectly.
Condo buying in Bangkok and Phuket is accelerating. Bangkok residential sales surged more than 300% in H1 2026 versus H1 2025, with strength concentrated in the Central Lumpini district and luxury segments, per The Nation Thailand, August 2026. Phuket sales rose more than 45% in the same period, with Bang Tao and Cherng Talay as the dominant locations.
The 2,120 condo records under DBD review concern potential nominee bypasses of the 49% foreign-quota ceiling - for example, a foreign buyer using a Thai individual as a nominee to hold units above the cap. That is a real but narrow risk, distinct from the far broader nominee-company problem affecting land.
Option 2: Thai landholding company with foreign minority shareholder
This structure typically looks like this: a Thai limited company is formed with Thai shareholders holding 51% of shares and a foreign buyer holding 49%. The company buys land and a villa. The foreign buyer controls the company in practice through preferential shares, management agreements, or board composition.
The DBD investigation targets exactly this model. Investigators are tracing the source of funds used by Thai co-shareholders. If Thai shareholders cannot demonstrate they invested genuine personal capital, or if funds originated from the foreign buyer, the arrangement qualifies as an illegal nominee scheme under the Land Code and the Foreign Business Act.
The consequences are not theoretical. Under current Thai law, land acquired through an illegal nominee structure can be ordered for disposal - meaning the company may be forced to sell the land at whatever price the market produces at that moment. The foreign buyer loses the asset. Criminal penalties attach to the Thai nominees and, in some interpretations, to the foreign principal.
This structure has been marketed to foreign buyers for decades as a workaround for the rule that foreigners cannot own land in Thailand. The DBD investigation in 2026 is the most systematic enforcement action the Thai government has taken against this practice.
Option 3: Long-term registered lease (leasehold)
A foreign individual can legally hold a registered leasehold over land and a house for up to 30 years under the Civil and Commercial Code. Registration at the Land Department is mandatory for the lease to be enforceable beyond 3 years. Some contracts include options to renew for two additional 30-year terms, but renewal terms beyond the first 30 years are not automatically enforceable under Thai law - a court may not uphold a contractual renewal promise if it conflicts with the statutory 30-year maximum.
Leasehold does not carry nominee risk in the same way as a company structure. However, it carries different risks: the lessor's death, insolvency, or sale of the underlying land can affect your rights if documents are not properly structured. Leasehold is reviewed neither by the DBD company investigation nor under the Condominium Act quota rules.
Option 4: BOI-promoted foreign land ownership
Since 2022, the Board of Investment (BOI) has permitted foreigners who invest at least THB 40 million in qualifying assets (such as Thai government bonds or Thai real estate investment trusts) to own up to 1 rai (1,600 square meters) of residential land in their own name. This route is legal, direct, and carries no nominee risk. It is applicable only to high-value buyers and involves a multi-step approval process.
Comparison table
| Parameter | Freehold condo (Condominium Act) | Company-held land (nominee risk) | Registered leasehold | BOI foreign land ownership |
|---|---|---|---|---|
| Foreign ownership legality | Fully legal (up to 49% quota) | Illegal if nominee structure confirmed | Fully legal (30-year term) | Fully legal (qualifying investment) |
| DBD investigation exposure | Low (separate 2,120-record category) | High (part of 36,277-firm investigation) | None | None |
| Title in foreign name | Yes (chanote) | No (company name) | No (lease registered) | Yes (chanote) |
| Maximum tenure | Freehold (indefinite) | Indefinite but legally fragile | 30 years (renewal unenforceable by statute) | Freehold (indefinite) |
| Forced disposal risk | None for legal quota units | Yes, if nominee scheme confirmed | None | None |
| Criminal penalty exposure | None | Up to 3 years imprisonment, THB 100,000-1,000,000 fine | None | None |
| Minimum investment threshold | No statutory minimum | No statutory minimum | No statutory minimum | THB 40 million |
| FET document required | Yes, for full purchase price | Not applicable in same way | Partial (for remittance) | Yes |
| Resale to foreigner | Straightforward within quota | Legally complex, risky | Assignable if lease permits | Straightforward |
Risks and mistakes
Relying on a nominee company structure in 2026
The DBD investigation covering 36,277 foreign-linked firms (per The Nation Thailand, August 2026) means nominee structures are under active scrutiny, not just theoretical legal risk. If you currently hold or are considering a residential property through a Thai limited company where Thai shareholders cannot demonstrate genuine personal investment, the asset is exposed.
The warning signs are measurable. If the Thai co-shareholders contributed no documented capital of their own; if the company was formed with a lawyer or agent supplying the Thai shareholder names; if the foreign buyer funded the land purchase directly or indirectly for the Thai shareholders - each of these facts is a flag that investigators are trained to identify through fund-tracing.
The cost of this mistake is losing the land asset entirely, plus potential criminal exposure for the Thai nominees. The foreign buyer typically loses the purchase price with no legal recovery mechanism because the structure itself was illegal.
The prevention rule: if you want land ownership, use the BOI route with a minimum THB 40 million qualifying investment, or structure a properly registered long-term lease with independent Thai legal advice (not the developer's lawyer). Never use a lawyer or agent who also supplies the Thai shareholders.
Skipping the title deed class check
Not all Thai title documents are equal. A chanote (Nor Sor 4 Jor) is a full-title deed with GPS-coordinated boundaries and the highest legal protection. A Nor Sor 3 Gor has surveyed boundaries but is a step below. A Nor Sor 3 has approximate boundaries and can be contested. Land sold with only a Sor Por Kor or a right-of-possession document carries the highest risk.
Foreign buyers, particularly those purchasing through company structures, sometimes discover only after signing that the company holds land on a Nor Sor 3 document rather than a chanote. The Land Department will not convert documents automatically, and conversion can take years.
The prevention rule: obtain the exact title deed reference number and check the class at the relevant provincial Land Department before signing any agreement. Your independent lawyer (not the developer's representative) should do this check and provide it in writing.
Receiving an FET document for the wrong amount or purpose
For a condo purchase, the FET issued by a Thai bank must cover the full purchase price of the unit. A common mistake is wiring funds in multiple tranches with different reference descriptions, or wiring baht from a Thai bank account funded by a foreign-currency conversion that was not properly documented.
If the FET does not match the purchase price, the Land Department will not register the unit in a foreign name. Reconstructing a valid FET after the fact is not possible - the original wire transfer and bank documentation must match the registration.
The prevention rule: before wiring any funds, confirm with the receiving Thai bank the exact reference code and purpose description required. Wire the full amount in a single foreign-currency transfer where possible, and obtain the FET certificate from the bank immediately after conversion.
Trusting renewal promises on leasehold contracts
Some developers and agents market 30+30+30 year leases as equivalent to freehold. Thai courts have not consistently upheld contractual lease renewal clauses beyond the first statutory 30-year term. A renewal clause in a private contract does not override the Civil and Commercial Code's 30-year cap.
The cost of this mistake is discovering at year 30 that the renewal is unenforceable, the landowner has changed (through sale or inheritance), and your lease terminates without compensation.
The prevention rule: treat a leasehold as a 30-year asset, not a 90-year one. Price it and plan accordingly. If 30 years is acceptable for your use case (retirement residence, for example), leasehold is a legally clean route. If you need longer-term asset value, pursue the condo freehold or BOI route.
Signing handover without an inspection report
In Thailand, the developer's liability for defects is time-limited after handover. Signing the handover document without a documented inspection - in writing, with defects listed and developer-acknowledged - removes your legal leverage for repairs.
The prevention rule: never sign a handover acceptance document until a written punch list has been signed by both parties. Engage an independent building inspector (not the developer's site team) before handover day. Common defects include waterproofing failures, electrical grounding errors, and HVAC installation problems that are invisible without specialist tools.
Relying on verbal developer promises
Promises about views, facilities, rental guarantees, or management services that are not in the signed contract have no legal weight in Thailand. Rental guarantee programs offered verbally or in marketing brochures are not enforceable unless written into the sale and purchase agreement with specific performance terms.
The prevention rule: list every material promise in an annex to the sale and purchase agreement, signed by an authorized developer representative. If a developer refuses to put a promise in writing, treat that refusal as evidence the promise will not be kept.
FAQ
What is the DBD landholding investigation and who does it affect?
The Department of Business Development (DBD) is Thailand's company registry authority. Its 2026 investigation covers 36,277 landholding entities with foreign links, checking whether Thai co-shareholders genuinely invested personal funds or acted as nominees for foreign capital. It affects any foreign buyer who holds or is considering residential land through a Thai limited company.
Why is a condo safer than a company-held villa under Thai law?
A condominium unit bought by a foreign individual in the foreign quota is legal under the Condominium Act. The title deed (chanote) is in your name. There is no nominee arrangement and no exposure to the Land Code penalties that apply to company-held land. The DBD reviewed condos in a separate, smaller category of 2,120 records, focused only on potential quota-bypass nominees - a much narrower risk.
Can I lose my property if a Thai company I used is investigated?
Yes. If investigators confirm that Thai shareholders used foreign capital and acted as nominees, the land can be ordered for disposal under the Land Code. You would lose the asset. Criminal penalties apply to the Thai nominees. The foreign buyer typically has no legal recovery for the purchase price paid.
What is a Foreign Exchange Transaction (FET) form and why does it matter for condo buyers?
An FET is a certificate issued by a Thai commercial bank confirming that foreign currency was brought into Thailand and converted to Thai baht for a specific purpose. For a condo purchase, the Land Department requires an FET covering the full purchase price before it will register a condo unit in a foreign name. Without a valid FET, foreign individual ownership cannot be registered regardless of how much you paid.
Is a 30+30+30 leasehold really equivalent to freehold?
No. The first 30-year registered lease is legally enforceable. Renewal clauses for subsequent 30-year periods are contractual promises that Thai courts have not consistently upheld against the Civil and Commercial Code's statutory 30-year maximum. You should plan a leasehold as a 30-year asset and verify your specific contract terms with an independent Thai lawyer.
How much of a Bangkok condo building can foreigners own?
The Condominium Act caps foreign ownership at 49% of the total registered floor area of any single condominium building. Once that ceiling is reached, additional units can only be sold to Thai nationals or in the Thai quota, which carries resale restrictions for foreign buyers.
What is the BOI foreign land ownership route and who qualifies?
Since 2022, the Board of Investment allows foreign individuals who invest at least THB 40 million in qualifying assets - such as Thai government bonds, property funds, or REITs - to hold up to 1 rai (1,600 square meters) of residential land in their own name. This is the only direct freehold land route for most foreign individuals. It requires multi-step BOI approval and is not suitable for mid-range budgets.
What penalties apply to illegal nominee landholding arrangements?
Under Thai law, penalties for illegal nominee structures include imprisonment of up to 3 years, fines of THB 100,000 to 1,000,000, or both. The land itself can be ordered for disposal. These penalties apply primarily to the Thai nominees, but the foreign principal also faces legal exposure depending on how investigators characterize the arrangement.
How do I check whether a condo has reached the 49% foreign quota?
Ask the juristic person (the building's management entity, which is a legal body elected by all unit owners and responsible for managing common areas and enforcing building rules) or the Land Department for the current foreign ownership percentage. A developer may claim quota is available when it is not. Verify independently before signing. Your independent lawyer should request this in writing from the juristic person or the Land Department directly.
Is foreign buyer demand in Thailand likely to increase enforcement pressure?
The data suggests yes. Foreign buyers reached 32% of central Bangkok condo purchases and 67% of Phuket condo purchases in 2026, per The Nation Thailand, August 2026. Higher foreign participation increases political and regulatory attention to whether ownership rules are being followed. Enforcement of the 49% condo quota and the nominee land rules is likely to intensify as foreign demand grows.
Planning a property purchase in Thailand? Send us your requirements - the THAI.ESTATE team will reply with specific options and a safety checklist for your case.