Can a Foreign Company Lease Land

[STD Warehouse]

I know a foreign person can lease land for 30 years.

 

Can a foreign company (incorporated in Singapore) lease land for 30 years?

[Cardano]

4 hours ago, STD Warehouse said:

I know a foreign person can lease land for 30 years.

 

Can a foreign company (incorporated in Singapore) lease land for 30 years?

As a foreign company operating in Thailand has to have a minimum of 51% Thai ownership not only can it lease land it can also buy land. 

[Etaoin Shrdlu]

It isn't a viable work-around for an individual seeking the use of land for a residence or a small business, if that is your intent.

 

Foreign companies may not be prohibited outright from leasing land, but the Foreign Business Act imposes restrictions and licensing requirements on foreign companies. Obtaining a Foreign Business License requires approval at the Ministry of Commerce at the highest levels.

[STD Warehouse]

15 hours ago, Cardano said:

As a foreign company operating in Thailand has to have a minimum of 51% Thai ownership not only can it lease land it can also buy land. 

What if it’s not operating. It’s just a foreign company, which wants to lease land, not buy, the same as a foreign person can lease land.

[Etaoin Shrdlu]

14 minutes ago, STD Warehouse said:

What if it’s not operating. It’s just a foreign company, which wants to lease land, not buy, the same as a foreign person can lease land.

 

 

 

While a natural person could lease land for purposes other than conducting business, I don't think that would be the case for a juristic person. Entering into a lease agreement for land in Thailand would likely be considered operating in Thailand.

 

I suspect that The Land Department would need to see the license issued by the Ministry of Commerce under the Foreign Business Act before registering the lease.

[Cardano]

11 hours ago, STD Warehouse said:

What if it’s not operating. It’s just a foreign company, which wants to lease land, not buy, the same as a foreign person can lease land.

Any foreign company whether operating or not has to have a minimum of 51% Thai ownership and as such can buy or lease land. What you will do with said land is where potential problems lie.

[Etaoin Shrdlu]

2 hours ago, Cardano said:

Any foreign company whether operating or not has to have a minimum of 51% Thai ownership and as such can buy or lease land. What you will do with said land is where potential problems lie.

 

The OP's interest is in having a company incorporated in Singapore lease land in Thailand. By law, this is a foreign company regardless of shareholding since it is incorporated outside Thailand. I am quite certain such a company would require a license under the Foreign Business Act before it could undertake any activities in Thailand, including leasing land.

 

It is not easy to get a license from the Ministry of Commerce under the FBA and there are other restrictions and licensing requirements including a specific license for foreign companies engaged in "rental services" of movable or immovable property. I don't think the MoC would grant a license simply for the purpose of leasing land. There is no business case to support the license application.

 

Here is an article describing the FBA:  https://thailand.acclime.com/guides/foreign-business-ownership/

 

And one with more detail, including the application process: https://thailand.acclime.com/formation/foreign-business-license/

 

The FBA basically makes it too difficult in most instances to use a foreign company to do business in Thailand except in very special cases unless the company comes under either a Board of Investment promotion or the US-Thailand Treaty of Amity.

 

 

 

 

[bradiston]

18 hours ago, Cardano said:

Any foreign company whether operating or not has to have a minimum of 51% Thai ownership and as such can buy or lease land. What you will do with said land is where potential problems lie.

Leasing is possible I think. But not purchasing. Any foreign ownership, no matter how small, of the company will prohibit it from buying land. I visited my local land office just 2 weeks ago as I have a foreign buyer who was hoping to buy my place with his well established local business. No way, I was told! He will have to create a 100% Thai owned company which then leases the property back to him, or uses some other means to transfer use. The contract will have to stipulate the Thai "owners" of the company are not empowered to sell or otherwise dispose of the property, or occupy it I guess. I don't think this is uncommon here, so maybe someone else has more details.

Edited February 6 by bradiston

[Mike Lister]

The Land Office will almost certainly look into any company that exists solely for the purpose of owning a house or a piece of land, especially when there is a foreign shareholder. I know of two British homeowners in the North who owned their homes this way. The LO investigated and both were given 6 months to revise the ownership details.

[khunPer]

I cannot see why a foreign company cannot rent or lease property in Thailand; however, a foreign company needs a special permission – probably from BOI – to operate as a branch in Thailand.

[Cardano]

4 hours ago, bradiston said:

Leasing is possible I think. But not purchasing. Any foreign ownership, no matter how small, of the company will prohibit it from buying land. I visited my local land office just 2 weeks ago as I have a foreign buyer who was hoping to buy my place with his well established local business. No way, I was told! He will have to create a 100% Thai owned company which then leases the property back to him, or uses some other means to transfer use. The contract will have to stipulate the Thai "owners" of the company are not empowered to sell or otherwise dispose of the property, or occupy it I guess. I don't think this is uncommon here, so maybe someone else has more details.

To cut a long story short anybody whether company or personal can lease land in Thailand, it is purely an agreement between the landowner and the entity wishing to lease, nothing to do with any government bodies.

Operating a business is a completely different topic.

[Robert Thailand]

 

In Thailand, a foreign company may lease land, but there are certain restrictions and conditions that need to be met. Under the Land Code Act B.E. 2497 (1954) and its amendments, Thai law generally permits leasehold interests in land for up to a maximum term of 30 years. This maximum term can apply to both Thai nationals and foreign entities, including companies incorporated in Singapore.

 

Moreover, if the lease is for industrial or commercial purposes, the lease term can be renewed beyond the initial 30 years, subject to agreement between the parties and in compliance with relevant laws. Renewal must be registered to be enforceable.

There are additional requirements for foreign entities leasing land in Thailand:

1. The lease agreement must be in writing and registered with the competent Land Office to be legally effective.
2. The lessee may be required to obtain a Foreign Business License under the Foreign Business Act B.E. 2542 (1999) if the activities conducted on the land fall under the categories of business restricted for foreigners. A company is different than a person. Why does a company lease in Thailand? For business?
3. If the foreign company is operating under the Board of Investment (BOI) or Industrial Estate Authority of Thailand (IEAT) promotions, special privileges, including the ability to lease land for longer periods, may be granted.

 

It would be easier to simply make it under the name of the Singaporean person.

 

Edited February 14 by Robert Thailand

[Yellowtail]

2 minutes ago, Robert Thailand said:

In Thailand, a foreign company may lease land, but there are certain restrictions and conditions that need to be met. Under the Land Code Act B.E. 2497 (1954) and its amendments, Thai law generally permits leasehold interests in land for up to a maximum term of 30 years. This maximum term can apply to both Thai nationals and foreign entities, including companies incorporated in Singapore.

 

Moreover, if the lease is for industrial or commercial purposes, the lease term can be renewed beyond the initial 30 years, subject to agreement between the parties and in compliance with relevant laws. Renewal must be registered to be enforceable.

There are additional requirements for foreign entities leasing land in Thailand:

1. The lease agreement must be in writing and registered with the competent Land Office to be legally effective.

2. The lessee may be required to obtain a Foreign Business License under the Foreign Business Act B.E. 2542 (1999) if the activities conducted on the land fall under the categories of business restricted for foreigners. A company is different than a person. Why does a company lease in Thailand? For business?

3. If the foreign company is operating under the Board of Investment (BOI) or Industrial Estate Authority of Thailand (IEAT) promotions, special privileges, including the ability to lease land for longer periods, may be granted.

 

It would be easier to simply make it under the name of the Singaporean person.

And at least some BOI registered companies can (or at least could) buy property in Thailand. 

[Robert Thailand]

14 minutes ago, Yellowtail said:

And at least some BOI registered companies can (or at least could) buy property in Thailand. 

 

Yes, companies that have obtained Board of Investment (BOI) promotion privileges can lease land in Thailand, and under certain conditions, they may also be granted the right to own land. This is an exception to the general rule prohibiting foreign ownership of land in Thailand.

 

BOI-promoted companies are eligible for various incentives, one of which may include the right to lease or own land for the purpose of the promoted business. These privileges are granted to encourage foreign investment in sectors that Thailand considers beneficial for its economic development.

 

For non-BOI companies, including Singaporean companies, leasing land for business purposes is indeed subject to the Foreign Business Act (FBA) B.E. 2542 (1999). This legislation outlines the types of businesses that foreigners can engage in—some sectors require a Foreign Business License, others are strictly prohibited, while some may operate free of restrictions.

 

When a foreign company leases land in Thailand for business purposes:

1. The lease must be structured to comply with the FBA, including obtaining a Foreign Business License if the business operations fall within the categories regulated by the Act. 
2. The Land Department may ask for documentation pertaining to the foreign company, which would likely need to include a certified translation into Thai, possibly legalized or notarized according to Thai law requirements. 
3. The lease agreement must be registered with the appropriate Land Office for it to be enforceable. (if more than 3 years according to the 540 of the Thai commercial and Civil code). 

BOI-promoted companies are typically exempted from some of the restrictions under the FBA, which allows them greater freedom in conducting their business, including in matters related to land.

 

 

Edited February 14 by Robert Thailand

[Robert Thailand]

On 2/6/2024 at 7:27 PM, Cardano said:

Operating a business is a completely different topic.

 

Why would a foreign company lease land if not for operating a business? The land departments in Thailand distinguish even between Thai companies. Their rationale is that a company exists to make a profit, a concept I have previously observed.