The real risks for foreign real-estate investors in Thailand

On paper, the rules for foreign property buyers in Thailand have not changed. As of October 2026, foreigners still cannot own land in their own name (the exceptions are narrow — for example, land rights for BOI-promoted investors, an investment of at least THB 40 million to apply for permission to hold up to 1 rai of land for residential use under Section 96 bis of the Land Code, or acquisition by inheritance as a statutory heir, which requires the Minister's permission — and they rarely help individual buyers in practice), foreign freehold in a condominium building is still capped at 49% of the total saleable unit area, and the longest residential lease you can register under the Civil and Commercial Code is still 30 years (a lease of more than 30 years and up to 50 years is possible only for commerce and industry under the Leasing of Immovable Property for Commerce and Industry Act B.E. 2542 (1999), which does not cover residential homes).

What has changed — dramatically — is enforcement. Since late 2025, government agencies have linked company shareholding data with land-holding data and use a data-analysis system to screen for suspected nominee companies, and the Supreme Court has held that the "30+30+30" lease-renewal promises made in advance, which agents sold for two decades, are unenforceable. Structures that were marketed as "standard" in 2019 are genuinely dangerous in 2026.

Here is the honest risk map as of October 2026 — and, at the end, the checklist that substantially reduces these risks.

Title risk: not every land document is a real title

Thai land documents come in a hierarchy, and each type gives different rights and has a different legal effect. A Chanote (Nor Sor 4 Jor) is a title deed, with greater certainty on the register than a certificate of use. However, a Chanote does not guarantee that the land is free of disputes over ownership, boundaries, encumbrances or restrictions on use. Under Section 1 of the Land Code, a "title deed" means a document of title to land, and a "certificate of use" means a certificate issued by the competent official confirming that the land has been put to use, including the Nor Sor 3, Nor Sor 3 Gor and Nor Sor 3 Kor forms. The holder of a certificate of use therefore has a right of possession, not ownership. A Nor Sor 3 Gor is a certificate of use issued in an area covered by aerial-photograph survey sheets, so the position and boundaries of the plot can be referenced to those sheets. It can be sold, mortgaged or upgraded to a Chanote.

Below that, a plain Nor Sor 3 is issued in an area without aerial-photograph survey sheets, so the position of the plot is not tied to a survey sheet, and a sale must be publicly announced for 30 days before it can be registered. Lesser possessory papers are not titles at all, so they carry much higher risk. Our general advice: transact only on Chanote or Nor Sor 3 Gor. For any other document, assess the risk in detail before deciding. Whatever the document type, always check the registration history, the boundaries and the encumbrances before any transaction.

One more surprise: even Chanote land can be lost. Under Section 1382 of the Civil and Commercial Code, a squatter or encroaching neighbour who possesses the land peacefully, openly and with intent to own it for ten continuous years acquires ownership by law, and can apply for a court order to register it — this is adverse possession. Inspect, fence and check your land regularly.

Off-plan risk: your instalments are only as safe as the developer's finances

When you buy an off-plan condo, you usually pay a reservation deposit, a contract deposit and down-payment instalments throughout construction, and the balance on the transfer date. These payments generally go straight into the developer's account. Escrow — holding your money with an escrow agent, such as a bank, until the transfer — is voluntary for the parties under the Escrow Act B.E. 2551 (2008), and in practice developers rarely offer it. If the project stalls or the developer goes bankrupt, you are an unsecured creditor, paid after secured creditors such as the bank holding a mortgage over the project land, so you may recover little or nothing.

Consumer-protection law helps only in part. On 31 January 2025, the Contract Committee Notification making the sale of condominium units with reservation a contract-controlled business B.E. 2567 (2024) came into force; it was issued under the Consumer Protection Act B.E. 2522 (1979), and the OCPB (Office of the Consumer Protection Board) supervises it. It bans clauses that exclude or limit the developer's liability for its own breach, clauses that let the developer amend the contract so that you bear a greater burden, and clauses that forfeit the reservation deposit unless you are in breach. It also sets the period within which the developer must refund the reservation deposit where a refund is due. However, it covers only the reservation deposit — not the contract deposit or the down-payment instalments paid during construction. Separately, condominium sale and purchase agreements have been a contract-controlled business since 2000, which generally lets you terminate and claim a refund if the developer is in breach. But both notifications regulate only the content of the contract. Neither ring-fences your money or guarantees a refund. If the developer has no money, your contractual rights may be hard to turn into a refund.

The defence is unglamorous: before signing, check the developer's track record, litigation and financial statements; check that the project has its building permit and, where an Environmental Impact Assessment (EIA) is required, that the EIA report has been approved; check which bank holds a mortgage over the project land and how your unit will be released from it on the transfer date; choose a payment schedule weighted towards transfer; ask for escrow if the developer agrees; and have your own lawyer review both the reservation agreement and the sale and purchase agreement — see our due diligence service for what that involves.

Leasehold risk: the legal risks of "30+30+30" leases

For years, villas on leased land were marketed as "90 years of ownership": a registered 30-year lease plus two pre-agreed 30-year renewals. Supreme Court Judgment No. 4655/2566, reported in March 2025, set an important precedent. In that case, the parties made a 30-year lease with a promise to renew it twice, for 30 years each time, and the rent for all 90 years was paid in advance, without new rent or new terms for the renewal periods. The court held that this circumvented the 30-year limit on leases under Section 540 of the Civil and Commercial Code, so the renewal promise was unenforceable. The effect of any particular contract depends on its own facts and terms. In a structure of this kind, your lease is enforceable for its registered 30 years — renewal promises made in advance in this way cannot be enforced, even if you paid extra for them. A properly made promise to lease can still bind the lessor and the lessor's heirs, but it does not bind a new buyer of the land.

Nor is rescue coming from parliament: the much-publicised bill to amend the Sap Ing Sit (Real Rights over Immovable Property) Act to allow 99 years was shelved by the incoming government in September 2025, and as of October 2026 the maximum registrable residential lease remains 30 years. At year 30, the parties can agree to renew the lease for up to 30 years from the renewal date under Section 540 — but do not plan an investment on the assumption that a renewal will happen.

Value and price any leasehold purchase as a 30-year right — we unpack what the "30+30+30" structure really gives you in our guide to the 90-year lease. A brochure still promising "90 years" is a red flag about everything else in it.

Nominee company risk: from grey area to active crackdown

The classic workaround — a Thai company with Thai shareholders holding 51% on paper while a foreigner controls everything and the company owns the villa — has always been illegal. What changed is detection. In late 2025, the Department of Business Development (DBD) set up a division to prevent and suppress illegal businesses, and in 2026 it introduced a company-behaviour analysis system (IBAS) to screen for suspected nominee companies and detect links between individuals and companies. The DBD also links company data with the Land Department's land-holding data, and passes data on high-risk companies to the Department of Special Investigation (DSI), the Anti-Money Laundering Office (AMLO) and the Revenue Department for action within their powers.

The scale is not theoretical: the DBD has identified 36,277 companies with foreign participation that hold land title deeds, and the Land Department has found 317 companies in Phuket that appear to hold land on behalf of foreigners. In May 2026, the DBD and the DSI began scanning the data of more than 11,426 companies with foreign participation on Koh Samui and Koh Phangan, and they plan to extend this to Phuket, Krabi, Phang Nga, Pattaya and Hua Hin.

A clear example is DSI Special Case No. 295/2565, handled by the DSI's Security Case Division, in which the DSI searched a law and accounting firm in Phuket. The firm registered companies, kept their accounts and advised on tax and work permits, and it used Thai nationals as directors or shareholders on behalf of foreigners in more than 60 suspect companies. Some of these companies held real estate, and the properties were bought and sold by changing the shareholders instead of registering a transfer of ownership at the Land Office. According to the DSI, this not only circumvented the ban on foreigners owning land but also cost the state more than 10% of the appraised value in taxes and fees. The public prosecutor indicted 23 defendants — Thai nationals, foreigners, Thai companies and foreign companies. Six further foreign companies that held real estate were referred to the Land Department for action.

On 11 September 2024, the Criminal Court, in Red Case No. Or. 2812/2567, convicted all 23 defendants under the Foreign Business Act — both for jointly aiding or supporting foreigners to operate businesses listed in the schedules to the Act without permission, and for being foreigners who consented to those acts. According to the DSI, the court imposed a prison sentence of 10 years, reduced by half to 5 years because the defendants confessed, and suspended it for 2 years because they had no previous convictions. It also fined each defendant THB 200,000, placed them on probation for 1 year, and ordered the companies to register their dissolution, with a fine of THB 10,000 per day for as long as they fail to comply. The lesson from this case: an adviser who offers to set up a nominee structure does not reduce your risk. It can make both the adviser and you defendants.

The rules keep tightening. Order No. 2/2569 of the Central Partnership and Company Registration Office has, since 1 August 2026, required the Thai shareholders of a company incorporated with foreign shareholders holding less than 50% in total to submit three months of bank statements before the share payment and a prescribed investment explanation letter, proving a traceable source of funds for their shares; the DBD also checks the account that received the payment. The same documents are required where a company has no foreign shareholders but a foreigner is a director with sole or mandatory joint signing authority, and a covered amendment filing calls for an investment confirmation letter instead. The order replaced Order No. 2/2568, which ran these checks on incorporations from 1 January 2026, and Order No. 1/2569, which from 1 April 2026 reached certain amendment filings — confirm the current position with us before touching any company structure.

The penalties in force today: Section 36 of the Foreign Business Act B.E. 2542 (1999) sets out the offence of acting as a nominee for a foreigner and its penalty as follows (unofficial translation):

"Any Thai national or juristic person that is not a foreigner under this Act who aids, supports or participates in the business operation of a foreigner, being a business specified in the List annexed to this Act, which the foreigner has not been permitted to operate, or who participates in the business operation of a foreigner by representing it as his or her sole business, or who holds shares on behalf of a foreigner in a partnership, a limited company or any juristic person so that the foreigner can operate a business in avoidance or violation of the provisions of this Act, and any foreigner who consents to a Thai national or a juristic person that is not a foreigner under this Act doing such acts, shall be liable to imprisonment for a term not exceeding three years or a fine of one hundred thousand baht to one million baht, or both, and the court shall order the cessation of the aiding or supporting, the cessation of the participation in the business, or the cessation of the shareholding or partnership, as the case may be. Any person who fails to comply with the court order shall be liable to a fine of ten thousand baht to fifty thousand baht per day for as long as the violation continues."

Holding land on behalf of a foreigner is an offence under Section 113 of the Land Code, which provides (unofficial translation):

"Any person who acquires land as a representative of a foreigner or of a juristic person under Section 97 or Section 98 commits an offence and shall be liable to a fine not exceeding twenty thousand baht or imprisonment for a term not exceeding two years, or both."

The law therefore punishes both the Thai nationals who hold the shares or the land on a foreigner's behalf and the foreigners who consent to it. In the past, enforcement was inconsistent, so many people saw nominee structures as an acceptable risk. As described above, that has changed.

In summary: under the Foreign Business Act, up to 3 years in prison and/or a THB 100,000–1,000,000 fine; under the Land Code (Sections 94, 111 and 113), up to 2 years in prison and/or a fine of up to THB 20,000, and a forced sale of the land within 180 days to 1 year. Confiscation without compensation is a proposed amendment, not current law — but a forced sale of your home on a deadline is damaging enough. If you already hold property this way, read our guide to nominee structures and how to exit them.

Condo quota and FET errors: the paperwork that can sink a clean deal

The condominium foreign quota is still 49% of the total unit area in each building (measured by area, not by number of units). You may have read that it is rising to 75% — as of October 2026 that is a government proposal under study, with no draft law enacted. Verify the live quota at the Land Office before paying any deposit; we explain how the quota works in our guide to the 49% rule.

The second trap is the FET. Most individual foreign buyers own their unit under Section 19(5) of the Condominium Act B.E. 2522 (1979) — as a foreigner who brings foreign currency into Thailand, or withdraws it from a non-resident baht account or a foreign-currency deposit account — and Section 19 ter requires the applicant to show evidence of those funds to the Land Office official. The amount, the remitter's name and the stated purpose follow Land Office and bank practice, which generally checks that the money brought in covers the purchase price, is in the buyer's own name and is stated to be for a condominium purchase. Section 19 also lists other categories of foreigners who can own a unit, such as those with residence under the immigration law or BOI-promoted investors, so check which category applies to you, and ask the Land Office and the bank about their document requirements before you remit. The receiving bank documents the transaction whatever its size, and what it issues varies by bank — an FET form, a credit advice or a confirmation letter — so agree the document with the bank before you remit.

The common errors: sending baht instead of foreign currency, sending from someone else's account, such as a spouse's or a company's (the Land Office may or may not accept this, depending on the facts and the supporting documents), or a vague stated purpose. Any of these can block registration — or, years later, repatriation of your sale proceeds. And from 29 December 2025, the Bank of Thailand requires banks to verify supporting documents for foreign-currency inflows of USD 200,000 or more received by customers resident in Thailand, including money that Thai sellers or developers receive from selling property to foreigners, so prepare large-transfer paperwork in advance.

Zoning and building permits: the villa problem

With villas, the risk often sits in the land and the building rather than the contract. Before buying, your lawyer should verify the zoning and any environmental overlays on the plot, and confirm that the building permit matches the structure actually standing on it — additions built without a permit are a liability you inherit.

Phuket is the cautionary tale. Its hillside rules were overhauled effective 14 December 2024: building at 80–140 metres elevation is now allowed, but only a single structure up to 6 metres high and 90 square metres of footprint, on land owned or lawfully possessed before the December 2017 environmental rules, with at least 70% of the plot kept green. Slopes of 35 degrees or more remain unbuildable, and villa or resort clusters above 80 metres remain prohibited. Many existing hillside villas breached the earlier rules and may face stop-work or demolition orders under the Building Control Act — a sea view does not legalise the building beneath it.

Rental yields and the hotel-licence trap

Rental returns are real but ordinary: they vary widely by location, property type and management model, so assess them net of management fees, common-area fees and taxes — not on the gross figures the seller presents. Be sceptical of "guaranteed 7–10%" offers — a guarantee is only as good as the developer's solvency, and some resort markets carry a large accumulated supply, which can make resale slow.

The bigger trap is legal. Renting out a condo or villa short-term to travellers for payment may amount to operating a hotel business under the Hotel Act B.E. 2547 (2004), which in principle requires a hotel licence. Without a licence, and unless an exemption applies, the penalty is up to one year of imprisonment or a fine of up to THB 20,000, or both, plus a fine of up to THB 10,000 per day for as long as the offence continues. Recently, authorities in the main tourist areas have paid more attention to accommodation let through online platforms such as Airbnb and Booking.com.

There is a legal route for small operators: a ministerial regulation in force since 30 October 2023 exempts "non-hotel" accommodation of up to 8 rooms and 30 guests, run as a supplementary source of income and notified to the registrar, from the hotel-licence requirement. Accommodation let for residence by the month or longer is generally not a hotel, but the actual nature of the service also matters. Short-term letting of a condo unit must also comply with the condominium law and the building's regulations, which many buildings use to prohibit it, and this exemption does not apply to every condo unit.

Foreign buyers often overlook another law: the Foreign Business Act B.E. 2542 (1999), which is separate from the Hotel Act. In ruling letter No. Por Nor 0810.02/1943 dated 9 October 2026, the DBD's Foreign Business Administration Division replied that a foreigner who owns a condo unit, or holds leasehold rights in one, and lets or sublets it, engages someone else to manage it for letting, or joins a rental management programme for a return in any form, is operating a service business under List Three (21) annexed to the Act. A foreigner needs permission from the Director-General of the DBD before operating that business. Buying condo units to resell for profit falls under List One (9), a business that foreigners are not permitted to operate for special reasons. A ruling letter answers the facts of the enquirer's own case, but it shows the regulator's approach. If you are buying a unit to rent out, joining a guaranteed-return programme or buying to speculate, consult a lawyer before you decide.

Getting your money out: exit taxes and repatriation

Selling costs more than buyers expect — budget roughly 5–7% of the price in total, although the actual figure depends on the appraised value, the holding period and the seller's status. The main items: a 2% transfer fee on the official appraised value (customarily split between the parties); either 3.3% specific business tax if you sell within 5 years of registered ownership (unless your name has been in the house registration for that property for at least 1 year, under Royal Decree (No. 342) B.E. 2541 (1998)) or 0.5% stamp duty where specific business tax does not apply (a sale of property acquired by inheritance is also exempt from specific business tax); plus withholding tax — 1% for company sellers, and a progressive scale on the appraised value for individuals. The government's reduced-transfer-fee stimulus schemes have generally applied to Thai buyers only.

Once taxes are settled, repatriating the proceeds is generally allowed, subject to the exchange-control rules and the bank's requirements — your Thai bank may ask for supporting documents such as the evidence of the funds you brought in when you bought (the FET form or credit advice), the sale agreement, the Land Office tax receipts, evidence of the transfer of ownership and evidence of receipt of the sale price. Without the evidence of the funds you brought in, getting your money out may be delayed or require additional documents, so check the bank's requirements before you sell. Keep that evidence as carefully as the title deed itself.

The due-diligence checklist that reduces most of the risk

Many of the serious problems we are asked to clean up could have been caught early by a routine that costs a small fraction of the purchase price. Before any money moves:

• Land Office title search — confirm the registered owner, the deed type (generally Chanote or Nor Sor 3 Gor), and every encumbrance on the reverse of the deed, such as mortgages, usufructs, servitudes and prior leases.
• Access — confirm registered road access or a registered right-of-way servitude. Landlocked plots are worth a fraction of their asking price.
• Zoning and environment — check zoning, elevation and environmental overlays before any villa or land purchase, especially on hillsides and near the sea.
• Building permit — verify the permit exists and matches the actual structure, including extensions and the pool.
• Developer checks — for off-plan, run litigation and financial checks on the developer and insist on contract terms that comply with the Contract Committee notification on condominium reservation sales, in force since January 2025.
• Condo quota — verify the building's live foreign quota at the Land Office before paying a deposit.
• Money trail — remit in foreign currency, in your own name, with the correct stated purpose, after checking the requirements with the Land Office and the bank; obtain and keep the FET form or credit advice.
• Structure — register your lease, value it as 30 years, and never accept a nominee shareholding arrangement, whatever the agent says.

Our team runs this routine as a fixed-scope engagement — see property due diligence and real-estate transactions — in English, Thai, German and Russian, from offices in Phuket and Bangkok.

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This article is general guidance — not legal or tax advice. If you'd like a scoped opinion on how it applies to your specific situation, contact our team.