Editorial
Thai Company to Own Property: Legal vs Illegal - What Buyers Must Know in 2026
By THAI.ESTATE Editorial Team12 min read
Using a Thai company to hold residential property is not automatically illegal. Whether it is legal or illegal depends entirely on one question: do the Thai shareholders in that company hold genuine equity with real money invested, or are they paper nominees serving only to disguise foreign control?
The answer to that question determines whether you are making a lawful business investment or committing a criminal offence under the Land Code and the Foreign Business Act. This guide explains the distinction, the due-diligence steps you must take, and why enforcement pressure has made this question more urgent than at any point in recent Thai property history.
Quick answer
- Foreigners cannot own land in Thailand under the Land Code. This is a structural restriction, not a temporary policy.
- A legitimate Thai company (a Thai juristic person - a legally registered entity with its own legal identity) can own land, but only if it is genuinely Thai-controlled with bona fide Thai shareholders.
- A nominee structure - where Thai individuals hold shares on paper while the foreigner retains full beneficial control - violates the Land Code and the Foreign Business Act and carries criminal penalties for all parties.
- As of mid-2026, a 23-government-department task force including the Royal Thai Police, the Department of Business Development (DBD), and the Department of Lands has issued 107 arrest warrants and made 65 arrests in a nationwide crackdown on nominee arrangements, per The Legal Co., July 2026.
- Investigations cover approximately 51 acres of land valued at around 1.67 billion baht across 172 land plots, primarily in southern provinces.
- Courts have ordered convicted parties to divest illegally acquired land within 180 days to one year, in addition to prison terms and fines.
Options and scenarios
Option 1: A genuine Thai company with real foreign minority shareholding
Under the Foreign Business Act, a foreigner may hold up to 49% of the shares in a Thai limited company without triggering foreign-business restrictions. The remaining 51% or more must be held by Thai nationals who are genuine co-investors. They must have paid for their shares with traceable funds, attend shareholder meetings, participate in decisions, and hold voting rights proportionate to their stake.
In this structure, the company can legally hold land. The foreigner benefits from the company's operations - rental income, capital appreciation, dividends - but does not control more than 49% of the vote unless a special class of shares grants disproportionate rights, which regulators now scrutinize closely.
This structure is legitimate only when the Thai shareholders are real investors, not stand-ins. If the Thai shareholders signed a side agreement transferring effective control or signing authority back to the foreigner, the structure collapses into a nominee arrangement regardless of what the company registration documents show.
Option 2: A registered leasehold supported by superficies or usufruct
For residential villas and houses on land, the most practical legal path for foreigners is a long-term registered leasehold - typically 30 years, renewable by contract for further 30-year terms, though only the first 30-year term is enforceable at the Land Office under Thai law as it currently stands.
A superficies right (the right to own structures built on another person's land) or usufruct (the right to use and take the fruits of another person's land for a defined period) can be registered alongside the lease to give the foreigner a stronger protected position over the structures on the land.
This route avoids any company structure entirely and therefore sidesteps the nominee-law risk. It does not give you freehold title to the land, but it gives you a registered, court-enforceable right.
Option 3: Condominium freehold within the 49% foreign quota
The Condominium Act allows foreigners to hold freehold title (full ownership) over individual condominium units, provided the total foreign-owned proportion in the building does not exceed 49% of the total unit area. The title document is a chanote (full title deed) registered in your name at the Land Office.
Funds used to purchase must arrive in Thailand as a foreign currency transfer and be converted into Thai baht. The bank will issue a Foreign Exchange Transaction (FET) certificate - a document confirming the inward transfer - which the Land Office requires at the time of registration. This route requires no Thai company and carries none of the nominee risk.
Option 4: A Thai company used as a nominee vehicle (illegal)
This is the arrangement most buyers encounter when a developer, agent, or lawyer says 'we can set up a company for you to hold the land.' In practice, the Thai shareholders receive their shares for free or for a nominal token sum, sign a blank power of attorney or share transfer back to the foreigner, and have no real interest in the business.
This structure is illegal. The Department of Lands is trained to identify it. Warning signs include companies with no business activity, no filed accounts, capital that does not match the property value, and Thai shareholders who cannot demonstrate how they funded their shares. As of July 2026, courts are imposing criminal sentences and forced divestiture orders, per The Legal Co.
Comparison table
| Parameter | Genuine Thai company (legal) | Nominee Thai company (illegal) | Registered leasehold | Condominium freehold |
|---|---|---|---|---|
| Foreign ownership of land | Indirect, via genuine equity | Disguised, criminal risk | No land ownership | No land ownership |
| Thai shareholder requirement | Real investors, traceable funds | Paper holders, no real stake | Not applicable | Not applicable |
| Title document in foreigner name | No - company holds title | No - and at legal risk | Leasehold registered at Land Office | Chanote (full title deed) |
| Enforcement risk in 2026 | Low if structure is genuine | High - 107 warrants issued as of mid-2026 | None | None |
| Structural complexity | High - company law, annual filings | High - and illegal | Moderate | Low |
| Duration of protection | Indefinite (if company complies) | Indefinitely unsafe | 30 years first term | Indefinite freehold |
| FET certificate required | No (but recommended for repatriation) | Not applicable | No | Yes |
| Typical use case | Commercial property, development land | Residential villas - attempted workaround | Villas, houses on land | Apartments in registered buildings |
Risks and mistakes
Relying on a 'company setup' package from the same agent selling you the property
When one party earns a commission on the sale and also charges a fee to set up the company holding the asset, their incentive is to close the transaction, not to protect you legally. The company structure may look complete on paper but fail every substantive legal test. Get independent legal advice from a qualified Thai lawyer who has no financial interest in the sale.
Assuming that past practice protects you
Nominee structures were widespread in Thailand for decades. Many buyers assume that because others did it without consequence, the risk is theoretical. The 2026 enforcement data shows this assumption is now actively dangerous. Per The Legal Co., July 2026, the crackdown covers Phuket, Chiang Mai, Bangkok, and is expanding nationwide, with investigations into sectors beyond hotels and resorts.
Misunderstanding share class arrangements
Some promoters offer 'preference share' or 'super-voting share' arrangements that give the foreign minority shareholder effective control despite holding less than 50% of the equity. Regulators and courts treat disproportionate voting rights designed to give foreign control the same way they treat nominee share arrangements - as a circumvention of the law.
Not verifying Thai shareholders' financial records
Even if you intend your company to be genuine, if the Thai shareholders cannot demonstrate that they paid for their shares with real money from their own accounts, the structure may be reclassified as a nominee arrangement during a Land Office audit. At the time of registration, the Department of Lands now scrutinizes funding sources and may request supporting documents.
Ignoring the forced-divestiture risk
If a court finds that your property was acquired through a nominee structure, it can order the land to be divested within 180 days to one year. You may receive no compensation, or compensation at a value the court sets. Your entire purchase price could be lost. This is not a theoretical risk in 2026.
Treating a 30-year lease as equivalent to freehold
A registered 30-year leasehold is a legally enforceable right but it is not ownership. The option to renew in the lease contract is enforceable between the private parties, but only the first 30-year term has full Land Office registration. Plan your holding period and exit strategy accordingly.
Skipping the FET certificate for condominium purchases
The FET certificate (issued by a Thai bank when you convert foreign currency into baht) is a mandatory document for registering condominium freehold in a foreigner's name. Without it, the Land Office will not complete the transfer. Banks issue these routinely, but you must request it at the time of the inward transfer. Reconstituting it later can delay your registration significantly.
Not checking the condominium building's foreign quota
Each registered condominium building has a quota: no more than 49% of total unit area may be in foreign names. If the building is already at or near 49%, you cannot acquire a freehold unit there as a foreigner. Always ask for the current quota status in writing before signing any reservation agreement.
FAQ
Can a foreigner legally own a Thai company that holds land?
Yes, with strict conditions. The foreigner may hold up to 49% of the shares. The Thai shareholders holding the remaining 51% must be genuine co-investors who paid real money for their shares and have actual decision-making roles. A company where the Thai shareholders are nominal holders acting at the foreigner's direction is a nominee structure and is illegal under the Land Code.
What is a nominee structure under Thai law?
A nominee structure is one where Thai individuals formally hold shares or title on behalf of a foreigner, transferring the real economic benefit and control back to the foreigner through side agreements, blank powers of attorney, or token-priced share transfers. The Thai Land Code and the Foreign Business Act both prohibit this arrangement. Courts can impose prison sentences on all parties, including the foreign buyer.
How does the 2026 enforcement crackdown affect existing structures?
The 23-agency task force active as of mid-2026 is reviewing existing corporate registrations and land ownership structures, not only new transactions. If you hold property through a Thai company set up before 2026, the structure can still be investigated and challenged. Per The Legal Co., July 2026, 107 arrest warrants and 65 arrests have already resulted from this review.
What is the safest legal option for a foreigner wanting a residential villa in Thailand?
For a villa on land, a registered 30-year leasehold is the safest widely available option. It gives you a legally enforceable right over the property registered at the Land Office in your name, without requiring any Thai company. Adding a registered superficies right strengthens your position over the structures. It does not give you land ownership, but it avoids criminal risk.
What is a chanote and why does it matter?
A chanote (full title deed, formally 'Nor Sor 4 Jor') is the highest grade of land title in Thailand. It is the only title document with GPS-surveyed boundaries and full legal protection. When you buy a condominium freehold, the chanote for your unit is registered in your name. When a company holds land, the chanote is in the company's name. Always confirm the title grade before purchase - lower-grade documents offer reduced legal protection.
What is an FET certificate and when do I need it?
An FET (Foreign Exchange Transaction) certificate is a document issued by a Thai commercial bank confirming that you transferred foreign currency into Thailand and converted it to Thai baht. The Department of Lands requires it when registering a condominium unit in a foreigner's name. Request the certificate at the time of your inward transfer. It is not required for leasehold registration or for a Thai company purchase, but retaining records of any foreign-currency transfer into Thailand is good practice for repatriation of funds later.
Can I put the property in my Thai spouse's name instead?
A foreigner married to a Thai national may purchase land in the Thai spouse's name. However, since 1998, the Land Office has required both spouses to sign a declaration confirming that the funds used are personal assets of the Thai spouse, not marital property, before it will register the land. This means the foreign spouse formally relinquishes any claim to the asset. Thai family law provides limited protection in the event of divorce or death. This option carries real financial risk and should be reviewed with an independent Thai lawyer.
What due-diligence steps should I take before buying through a Thai company?
First, instruct an independent Thai lawyer - not the developer's or agent's preferred firm - to review the company structure. Confirm that each Thai shareholder has documented, traceable financial records showing they paid for their shares with their own funds. Verify that the company has genuine business activity and filed tax returns. Confirm there are no side agreements, blank powers of attorney, or share pledges in favour of the foreigner. Ask the lawyer to check the company at the DBD (Department of Business Development) directly.
Are there legal structures that give foreigners more than 49% of shares in a Thai company?
Yes, under the Foreign Business Act and specific Board of Investment (BOI) promotion schemes, foreign majority ownership in certain business categories is permitted. However, these structures are designed for genuine operating businesses - manufacturing, technology, certain services - not as vehicles to hold residential land. Using a BOI-promoted company structure to circumvent the Land Code's residential ownership restriction is still treated as an unlawful arrangement by the Department of Lands.
If my nominee structure was set up years ago, should I unwind it?
Yes. The enforcement environment as of 2026 makes an existing nominee structure a continuing liability. Options include converting to a genuine multi-shareholder structure with bona fide Thai investors, divesting the land and buying a condominium unit freehold or using a registered leasehold instead, or seeking a qualified Thai lawyer's advice on the most appropriate exit. Acting proactively is significantly safer than waiting for an investigation.
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.