The New Norm for Foreign Property Buyers in Thailand
I’m here to meet with Gavin Perfect of ESS Developments to discuss the New Norm of Foreign Property Ownership in Thailand. Good morning Gavin, There’s been a lot of discussion recently about foreign property ownership in Thailand. So as a developer here for many years can you tell us more?
Gavin: Good morning, and yes over the past few months, there’s been a lot of focus on foreign ownership of land in Thailand, particularly around company ownership structures. I want to discuss a different option that has actually existed for many years but is now becoming much more relevant—the long-term lease structure.
At ESS Developments, we’ve spent the last several months working with legal professionals to create a lease agreement that provides much stronger protection for foreign buyers. While Thai law limits land leases to 30 years, we’ve structured our agreements to give lessees greater flexibility and security throughout that lease term.
Under Thai law, what are the current limitations of a land lease for foreigners?
Gavin: Thai law allows foreigners to lease land for a maximum of 30 years. While many people talk about lease renewals, it’s important to understand that a renewal isn’t automatically enforceable by law. After the initial 30 years, the landowner isn’t legally obligated to extend the lease. That’s why we’ve focused on creating a lease structure that gives our customers practical protections during the lease period, rather than relying on promises of future renewals.
So who actually owns the land under this structure?
Gavin: The land is owned by a Thai-registered company that is 100% Thai-owned, and complies with Thai law. That company acts as the lessor and grants a registered 30-year lease to the foreign buyer. Importantly, the lease agreement clearly states that while the land is leased, the foreign buyer owns the house or any buildings constructed on that land.
Who is your leasing company and what makes your lease agreement different?
Zensiri Lakeside Leasing Co. Ltd is a 100% Thai owned registered company. The director is the owner of the Zensiri Lakeside project, Mrs Waraporn Perfect with her sons as shareholders. The company has been registered with 10 million capital and has registered objectives and directives for the proposed leasing of land only. The key difference is flexibility. Our lease agreement is designed so that, during its term, the lease can be sold, transferred, or inherited. This gives foreign buyers options that traditional lease agreements often don’t provide.
What happens if the directors of the leasing company change?
Simple, if there is any change of directorship or shareholder ship during any term of any lease, those directors or shareholders are obligated by Thai Law to honour any registered lease agreement and those clauses within the lease agreement.
Can the Leasing company take out any loans or mortgages on the land that I’m leasing?
The simple answer is No. Once a lease is registered at the land office on a Channot title deed the land owners, the leasing company are not able to finance the land.
What would you say to foreign buyers considering purchasing property in Thailand?
Gavin: Our goal has always been to provide foreign buyers with greater confidence and practical protection when investing in Thailand. While no lease structure can change Thai property law, we’ve worked hard to create an agreement that offers flexibility through the ability to sell, transfer, and inherit lease rights, while providing ongoing administrative support through a professionally managed leasing company.
Next month we shall talk to Gavin about Selling during the lease term. In the meantime if anyone would like to learn more about the structure or discuss how it may apply to their own property purchase contact ESS and go see their stunning villas currently under construction at Lake Mabprachan.