Tag: Property and Real Estate

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Parliament Considers Carbon-Credit Sales from Community Forests

A member-sponsored bill before Parliament could provide a clearer statutory basis for the sale of carbon credits generated from community forests. The Draft Community Forest Act Amendment was proposed by members of the House of Representatives, and its official description identifies its purpose as adding provisions concerning the sale of carbon credits. The proposal is currently undergoing public consultation under Section 77 of the Constitution and is not yet binding law. It remains subject to the legislative process and may be revised before enactment.

The proposal is nevertheless significant because community-forest carbon-credit activities already exist in practice, while the Community Forest Act was principally designed to regulate community participation in forest conservation, restoration, management, and sustainable use rather than transactions in carbon assets. The amendment should therefore not be understood as creating community-forest carbon projects for the first time. Its significance lies in seeking to place the sale of carbon credits more expressly within the statutory framework governing community forests.

Ownership, authority, and community approval:

One of the most important issues is the legal entitlement to carbon credits generated from a community forest. Ownership or control of the underlying land, statutory rights to manage the forest, responsibility for maintaining carbon stocks, entitlement to register a carbon project, and ownership of the resulting carbon credits are not necessarily the same thing. For project developers and purchasers, the relevant question is therefore not simply whether credits have been issued under a recognized carbon program, but whether the seller has a sufficient legal basis to claim and transfer them.

Closely related is the question of who has authority to approve a carbon project and sell the resulting credits. Community forests operate through statutory community-management structures, while carbon projects may involve commitments extending over many years. Project agreements may cover project registration, monitoring and verification, responsibility for development costs, allocation of credits, exclusivity, forest-management obligations, sale of credits, and distribution of revenues. The authority of the community representatives entering into those arrangements is therefore important, particularly where a developer is granted long-term or exclusive rights.

The final legislation will also need to be considered carefully in relation to community approval. A decision to enter into a long-term carbon project may have consequences extending beyond ordinary forest management, particularly where future carbon revenues or carbon rights are committed to a private developer. Any statutory requirements concerning community meetings, resolutions, voting, disclosure, or government approval could therefore become relevant not only to regulatory compliance but also to the validity and bankability of the project.

Revenue allocation and project agreements:

Benefit sharing will be another central issue. Community-forest carbon projects already operate against a background of administrative arrangements dealing with carbon-credit revenues and community benefits, so the proposed amendment will need to be read together with the existing framework. An important point to watch is whether the amended Act itself establishes principles for allocating proceeds from carbon-credit sales or leaves the details to subordinate regulations.

The commercial implications are substantial. Developers may bear the costs of feasibility studies, project design, carbon measurement, registration, verification, monitoring, and financing, while communities provide the forest stewardship and management activities on which the carbon benefits depend. Project-development agreements therefore need to deal clearly with project costs, entitlement to issued credits, authority to market and sell those credits, allocation of revenues, reporting obligations, and the duration of the developer’s rights. They should also address the particular risks of forest-carbon projects, including fire, illegal logging, natural disasters, changes in forest management, and other events that may reduce credit generation or result in carbon reversal.

If the amendment introduces mandatory rules on approval, sales, or benefit sharing, existing contractual models may need to change. Developers negotiating new projects should therefore avoid relying on broad provisions simply assigning all “carbon rights” to the developer without examining whether those rights can legally be granted, by whom, for what period, and subject to what approvals.

Existing projects and corporate purchasers:

The treatment of existing projects will be particularly important. Community-forest carbon projects may already be governed by agreements among communities, developers, government agencies, and other participants. If the amended Act introduces new requirements concerning authority, approval, sale, or revenue allocation, the question will be whether those requirements apply only to future projects or also affect existing arrangements. The final legislation and any transitional provisions should therefore be reviewed carefully. Existing agreements may also need to be assessed for change-in-law provisions and for clauses dealing with ownership and allocation of credits, exclusivity, benefit sharing, duration, and termination.

For companies purchasing community-forest carbon credits, a clearer statutory framework could improve legal certainty, but it should not replace transaction-level due diligence. Buyers should establish the legal status of the community forest, the authority through which the project was approved, compliance with applicable community and government approval requirements, the developer’s entitlement to the credits, applicable benefit-sharing arrangements, and whether the credits have previously been sold, allocated, pledged, or otherwise committed.

There is also an important distinction between carbon-program eligibility and legal entitlement to transact. Registration or issuance under a recognized carbon standard demonstrates compliance with the requirements of that program, but should not necessarily be regarded as conclusive evidence that all underlying questions of ownership, community authorization, or contractual authority have been resolved. This is especially relevant to long-term off-take arrangements for future credits, where the purchaser assumes project-development and regulatory risks in addition to ordinary delivery risk.

What to watch:

The proposal remains a member-sponsored parliamentary bill rather than a change in current law. Businesses should therefore not restructure existing projects on the assumption that it will be enacted in its present form. Its progress is nevertheless worth following because it addresses an increasingly important intersection between community forest management and the carbon market.

If enacted, a clearer statutory framework could strengthen the basis on which communities derive economic benefits from forest conservation, provide greater certainty for developers investing in community-forest carbon projects, and make the resulting credits easier for corporate purchasers to diligence. Much will depend on how the final legislation addresses ownership, authority to sell, community approval, revenue allocation, benefit sharing, and existing projects.

Key takeaways:

  • Corporate purchasers should examine the underlying legal entitlement to community-forest credits rather than relying solely on their registration or issuance under a carbon standard.
  • The proposed amendment was initiated by members of the House of Representatives and specifically addresses the sale of carbon credits from community forests. It is undergoing public consultation under Section 77 of the Constitution and is not yet binding law.
  • Community-forest carbon-credit activities already exist. The proposal is significant because it could provide a more express statutory foundation for the sale of those credits.
  • Carbon-credit ownership, authority to sell, and community approval are separate legal issues and will be important for both project structuring and buyer due diligence.
  • Project-development agreements may need to address statutory requirements concerning approval and benefit sharing, as well as project costs, allocation of credits, exclusivity, carbon-reversal risks, and changes in law.
  • Existing projects should monitor the final legislation and any transitional provisions to determine whether current contractual arrangements will need to be reviewed.

Author: Panisa Suwanmatajarn, Managing Partner.

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Supreme Court Confirms Internal Estate Rules Cannot Override the Land Allocation Act

A recent Supreme Court judgment provides important guidance on the limits of a housing estate juristic person’s authority under the Land Allocation Act. In Supreme Court Judgment, the Court held that internal regulations and resolutions adopted by members cannot override mandatory statutory provisions or expand the powers granted to a housing estate juristic person under the Act.

Although the dispute concerned the retention of a construction security deposit, the decision has broader implications for developers, housing estate juristic persons, property managers, and homeowners. It reinforces the principle that private governance documents cannot be used to circumvent statutory protections established under the Land Allocation Act.

Background:

The dispute arose after a homeowner obtained permission from a housing estate juristic person to renovate a house within the estate. As required under the estate’s procedures, the homeowner paid construction security deposits before commencing the renovation works.

The renovation was completed without causing any damage to the estate’s common property or infrastructure. The homeowner subsequently requested the return of the deposits.

The housing estate juristic person refused to refund the full amount, arguing that, under its internal regulations and resolutions adopted at members’ meetings, it was entitled to retain part of the deposits as contributions toward the maintenance of common property.

The Court of First Instance dismissed the homeowner’s claim. However, the Court of Appeal reversed that decision and ordered the housing estate juristic person to refund the retained amount together with statutory interest. The housing estate juristic person appealed to the Supreme Court.

Supreme Court’s Decision:

The Supreme Court upheld the appellate judgment.

The Court first examined the legal purpose of a construction security deposit. It held that such a deposit is intended solely to secure compensation for potential damage to common property or common facilities arising from construction or renovation works.

Because the renovation had been completed without any damage to the common property, the purpose of the security deposit had been fulfilled. Consequently, the housing estate juristic person had no legal basis to continue holding the deposit.

The Court rejected the argument that the retained amount could instead be treated as common area maintenance fees.

Internal Regulations Cannot Override the Act:

The central issue before the Supreme Court was whether the housing estate juristic person could rely on its internal regulations and resolutions adopted by members to justify retaining part of the construction security deposit.

The Court answered this question in the negative.

The Supreme Court observed that the collection and administration of maintenance fees for common property are comprehensively governed by the Land Allocation Act and the subordinate regulations issued under that legislation. The statutory framework prescribes how maintenance fees are to be imposed, collected, and administered.

Accordingly, a housing estate juristic person cannot create an alternative collection mechanism simply because it has been approved by members or incorporated into the estate’s internal regulations.

The Court emphasized that internal regulations may facilitate the administration of the estate but cannot enlarge the statutory powers granted by the Land Allocation Act or create rights that are inconsistent with the legislation.

The Land Allocation Act Is Mandatory Legislation:

Perhaps the most significant aspect of the judgment is the Court’s characterization of the Land Allocation Act itself.

The Supreme Court expressly stated that the Act is legislation enacted to protect purchasers of land allocation projects and concerns matters of public order. As a result, private arrangements that are inconsistent with the statutory framework cannot prevail.

This means that even unanimous resolutions adopted by members of a housing estate juristic person cannot authorize practices that conflict with the Act.

The Court further reasoned that allowing construction security deposits to be retained as maintenance fees would effectively establish an alternative method of collecting maintenance fees that is not contemplated by the legislation. Such an arrangement would undermine the statutory scheme governing the management of housing estates.

Practical Implications:

The judgment has implications extending well beyond construction security deposits.

Housing estate juristic persons should review their bylaws, regulations, and resolutions to ensure that they remain consistent with the Land Allocation Act. Provisions that seek to create additional collection rights or modify statutory obligations may be vulnerable to legal challenge.

Developers and property managers should likewise review renovation procedures and security deposit arrangements to ensure that deposits are used solely for their intended purpose and are refunded promptly once the statutory conditions for their retention no longer exist.

The decision also serves as a reminder that internal governance documents—including estate regulations, bylaws, and members’ resolutions—cannot enlarge statutory powers or circumvent mandatory provisions enacted to protect purchasers.

Key Takeaways:

Housing estate juristic persons should review their internal regulations and operational practices to ensure they do not purport to exercise powers beyond those conferred by the Land Allocation Act.

Supreme Court Judgmentconfirms that internal regulations and members’ resolutions of a housing estate juristic person cannot override the Land Allocation Act.

The Land Allocation Act provides the exclusive statutory framework governing the collection and administration of maintenance fees.

Construction security deposits may only be used for their statutory purpose of securing compensation for damage arising from construction or renovation works.

Once renovation is completed without damage, the legal basis for retaining the security deposit ceases to exist.

The Supreme Court reaffirmed that the Land Allocation Act is mandatory legislation enacted to protect purchasers and concerns matters of public order, meaning inconsistent private arrangements are unenforceable.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand’s New Investigation Policy on Nominees Matter

The Government of Thailand has launched a nationwide investigation campaign targeting the illegal use of Thai “nominees” — local Thai citizens hired by foreign investors to circumvent restrictions on land ownership and business operations. Enforcement has been concentrated in Thailand’s major economic and tourism hubs, including Phuket, Chiang Mai, and Bangkok.

Action Plan and Policy

The campaign reflects a government priority to ensure fair competition and transparency within the local economy. It is being implemented jointly by 23 Thai government departments, including the Royal Thai Police, the Department of Business Development (DBD), and the Department of Lands. Under the action plan, authorities are re-examining corporate registrations, tracing the source of funds used by Thai shareholders, and reviewing companies in tourist areas with suspicious or unusual ownership structures.

Current Status and Practices

Enforcement efforts to date have produced significant results. Officials report that 172 land plots in the southern economic provinces — covering approximately 51 acres and valued at roughly 1.67 billion baht — are currently under investigation. As a result, courts have issued 107 arrest warrants, leading to 65 arrests of Thai nominees and foreign investors so far.

Government officials have disclosed that Israeli nationals represent the largest group implicated in these illegal nominee arrangements, followed by French, Russian, and other European nationals. The sectors most frequently affected include hotels, resorts, restaurants, and cannabis shops. A common scheme involves registering low-income Thai employees or local citizens as majority shareholders holding more than 50% of company shares — an arrangement that is often easy to identify, since these individuals typically lack the personal savings or income needed to fund such large-scale investments.

The legal consequences of enforcement are becoming increasingly severe. In recent rulings in Surat Thani — the southern province home to the popular tourist destination Koh Phangan — courts have sentenced convicted nominees and foreign investors to prison terms and fines, and ordered them to divest illegally acquired land within a strict timeframe of 180 days to one year.

Future Steps and Business Implications

This intensified enforcement signals a permanent shift toward stricter regulatory oversight of foreign investment in Thailand. The government is now expanding investigations beyond economic and tourism centers to other regions nationwide, aiming for comprehensive enforcement against nominee structures across the country.

The interagency screening process will introduce stricter background and financial checks at both the company registration and land-transfer stages. As a result, foreign investors should expect more rigorous scrutiny regarding the source of their Thai partners’ investment funds. The government also plans to involve the Anti-Money Laundering Office (AMLO) to freeze and seize bank accounts and assets linked to nominee networks.

Key Takeaways

  • AMLO will be engaged to freeze bank accounts and seize assets connected to nominee networks.
  • Thailand is enforcing its new anti-nominee policy nationwide, with particular focus on — but not limited to — major economic provinces.
  • The 23-department investigation framework enables deeper scrutiny of business funding and shareholder backgrounds, meaning investors should anticipate more intensive compliance checks.
  • Investigations are concentrated on, but not limited to, hotels, resorts, restaurants, and cannabis shops with suspicious Thai shareholding structures.
  • Courts are issuing prison sentences, fines, and mandatory orders to divest illegally acquired land within one year.

Author: Panisa Suwanmatajarn, Managing Partner.

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Draft Laws on the Extension and Expansion of Tax Measures Supporting Electronic Tax Systems

In the context of accelerating digital adoption worldwide, the Thai Revenue Department of the Ministry of Finance (the “RD“) is advancing Thailand’s digital transformation of tax administration and services by proposing two draft laws to the Cabinet on 16 June 2026. The Cabinet approved both draft laws in principle, following the affirmation of the Office of the National Economic and Social Development Council (NESDC), the Budget Bureau, and the Electronic Transactions Development Agency (the “ETDA“). The RD positions these draft laws as key mechanisms to reinforce the longstanding effort to promote electronic tax systems (the “e-Tax Systems”), encompassing e-Tax Invoice, e-Receipt, and e-Withholding Tax. The two draft laws are as follows:

  • Draft Royal Decree issued under the Revenue Code governing the Exemption from Revenue Taxes (No. B.E. … (the “Draft Royal Decree“); and
  • Draft Ministerial Regulations issued under the Revenue Code governing the Income Taxes (No. ) B.E. … (the “Draft Ministerial Regulations“).

Together, the two draft laws will broaden the scope of eligibility for tax incentives and extend the implementation period of existing tax measures relating to e-Tax Systems, as currently prescribed under the Royal Decree issued under the Revenue Code governing the Exemption from Revenue Taxes (No. 766) B.E. 2566 (2023) (the “Royal Decree No. 766”) and the Ministerial Regulations issued under the Revenue Code governing the Income Taxes (No. 389) B.E. 2566 (2023) (the “Ministerial Regulations No. 389”), respectively. In addition, the proposed drafts are designed to encourage greater cooperation from the private sectors — specifically, business operators acting as service providers of e-Tax Systems (the “Service Providers“) — by offering tax incentives to offset the costs associated with meeting the ETDA’s security standards and investing in the requisite electronic infrastructure. This is intended to reduce the financial burden on qualifying entities, simplify tax administration for taxpayers with limited familiarity with digital systems, and improve the overall efficiency of e-Tax Systems.

Tax Measures under Royal Decree No. 766

The measures promoting investment in e-Tax Systems were introduced under Royal Decree No. 766 and were applicable from 1 January 2023 to 31 December 2025. Companies or juristic partnerships that acted as Service Providers of e-Tax Invoice and e-Receipt services, e-Filing services, e-Stamp Duty services, or special account data collection services for electronic platforms were entitled to a corporate income tax exemption equivalent to twice the amount of qualifying investment expenses. Eligible expenses are divided into three main categories, each subject to specific terms and conditions:

  1. Expenses from investment in e-Tax Invoice and e-Receipt systems — comprising expenses incurred in the preparation of electronic data collection systems and the acquisition of software, computers, related electronic equipment, and other devices used to create, transmit, receive, or store such data. Excluded from this category are repair expenses for such equipment and expenses arising from electronic data operations that fall outside the scope of e-Tax Invoice and e-Receipt system services.
  2. Expenses from investment in e-Withholding Tax systems — comprising expenses incurred in the preparation of tax remittance systems and the acquisition of software, electronic certificate storage devices, computers, or other devices used for tax remittance. Repair expenses for such equipment are excluded.
  3. Fees for the use of e-Tax Invoice, e-Receipt, and e-Withholding Tax systems — comprising service charges or fees paid to Service Providers for the preparation or transmission of electronic data, electronic certificates, or electronic storage services for tax remittance through such systems.

Pursuant to the Royal Decree No. 766, assets or funds utilized under categories 1 and 2 above must satisfy all of the following criteria:

a. Must not have been previously used;
b. Must be eligible for depreciation deductions and must be acquired and available by 31 December 2027;
c. Must be located in Thailand;
d. Must be used in the business for not fewer than three consecutive accounting periods beginning from the first accounting period in which such assets or funds are acquired and available;
e. Must not be eligible for any other tax benefits under applicable law; and
f. Must not be eligible for tax exemptions, whether in whole or in part, under investment promotion law, the law on enhancement of competitiveness in target industries, or Eastern Economic Corridor (EEC) laws.

Draft Royal Decree and Key Amendments

Since the implementation of the tax measures under Royal Decree No. 766, Service Providers have faced increasing financial burdens arising from their legal obligation to comply with the ETDA’s security standards governing the management of electronic data received from taxpayers. These obligations entail additional costs for electronic data system audits and assessments conducted by the ETDA. According to data collected by the RD and other relevant authorities, such requirements have resulted in average annual costs of approximately THB 250,000 per Service Provider.

The Draft Royal Decree seeks to support Thailand’s digital transformation objectives while preserving the existing investment promotion framework, including the same terms, conditions, and exclusions established under Royal Decree No. 766. Accordingly, the draft law retains the three categories of eligible expenses described above. The key amendments introduced are: (1) an extension of the implementation period from 1 January 2026 to 31 December 2027, and (2) the introduction of a new fourth category of eligible expense, as follows:

  1. Fees for the use of information system audit and assessment services — comprising fees or service charges paid by a Service Provider to the ETDA for the audit and assessment of electronic data systems used in connection with the provision of e-Tax Invoice and e-Receipt services, e-Filing services, e-Stamp Duty services, or special account data submission services for electronic platform operators.

Under category 4, Service Providers will be entitled to a tax exemption equivalent to twice the amount of fees paid to the ETDA for information system audit and assessment services. This measure is designed to alleviate the financial burden arising from compliance requirements, encourage greater private-sector participation in the RD’s digital tax ecosystem, and ultimately enhance service quality for taxpayers and strengthen Thailand’s competitiveness in the digital economy.

Tax Measures under Ministerial Regulations No. 389

Under Ministerial Regulations No. 389, measures promoting the use of the e-Withholding Tax system were applicable from 1 January 2023 to 31 December 2025. These measures provided tax benefits in the form of reduced withholding tax and income tax rates for both juristic persons (excluding foundations and associations) and individuals making payments through the e-Withholding Tax system. Specifically, the applicable withholding tax rate was reduced from 5% to 3%, and the applicable income tax rate was reduced from 2% to 1%. The reduced income tax rates applied to the following categories of assessable income under the Revenue Code:

  1. Juristic persons (excluding foundations and associations) — income derived from employment duties or positions, including commission fees and bonuses; goodwill and royalty fees; rental income from assets; income from liberal professions; income from contracting services; and income from hire-of-work services, prizes from contests, competitions, or lucky draws, and other service income.
  2. Individuals — rental income from assets; income from liberal professions; income from contracting services; income from hire-of-work services, prizes from contests, competitions, or lucky draws, and other service income; and income of public entertainers resident in Thailand.

Draft Ministerial Regulations and Key Amendments

The measures implemented under Ministerial Regulations No. 389 have materially contributed to Thailand’s digital transformation and have significantly encouraged taxpayers — including businesses, foreign entities, and individuals — to manage their withholding tax and income tax obligations through the RD’s electronic platform. In recognition of this success, the RD has proposed a new Draft Ministerial Regulations to extend the application of these measures for an additional two years, from 1 January 2026 to 31 December 2027.

Pending the entry into force of the Draft Ministerial Regulations, the Ministry of Finance issued the Notification of the Ministry of Finance Regarding the Extension of the Deadline for Additional Fund Remittance through the e-Withholding Tax System, dated 6 February 2026. This notification serves as an interim measure to bridge the gap until the new regulations take effect, permitting taxpayers who made payments through the e-Withholding Tax system between 1 January and 31 March 2026 to remit any additional withholding tax by 30 April 2026, thereby preserving access to the reduced rates during the transitional period.

Summary and Key Takeaways

Businesses are advised to monitor the formal enactment of these draft laws to assess their eligibility for the extended tax incentives.

The RD has proposed two draft laws aimed at reducing compliance costs and encouraging greater private-sector participation in Thailand’s digital tax ecosystem.

The Cabinet, together with other relevant government authorities, has approved in principle both the Draft Royal Decree and the Draft Ministerial Regulations, which extend tax incentives for the use of e-Tax Systems through 31 December 2027.

The Draft Royal Decree introduces a new category of eligible expenses, allowing Service Providers to claim a tax exemption equal to twice the ETDA audit and assessment fees incurred.

Tax incentives under Royal Decree No. 766 for investments in, and the use of, e-Tax Systems — including e-Invoice, e-Receipt, and e-Withholding Tax — will continue under the extended regime.

The Draft Ministerial Regulations extend the reduced withholding tax and income tax rates applicable to qualifying payments made through the e-Withholding Tax system.

Pending the new regulations, the Ministry of Finance has issued an interim notification to preserve access to e-Withholding Tax incentives during the transitional period.

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand – Long-Term Commercial and Industrial Lease Regulations

Immovable Property Lease for Commercial and Industrial Purposes Act B.E. 2542 (1999)

This Act, administered by the Department of Lands, regulates long-term leasing of land and immovable property for business purposes, addressing land-related rights in a commercial and industrial context.

Background: Why changes or review are needed

The Act has been in force since May 19, 1999. A review of its implementation is required to assess its effectiveness over the intervening period. This includes examining registration statistics, application volumes, leased area sizes, and practical outcomes in facilitating investment, commerce, and industry. The evaluation identifies any limitations, obstacles, or areas where the law no longer adequately supports economic needs, such as investment promotion, land use flexibility, or alignment with current economic conditions.

Proposed changes:

The current process is an evaluation rather than a direct draft of new amendments. It gathers public and stakeholder input on the Act’s achievements and shortcomings. Potential future amendments could address issues such as lease term limits, approval processes for large areas (e.g., exceeding 100 rai), registration requirements, or enhancements to better promote investment. Note that related discussions in Thailand have included proposals to extend maximum lease terms (e.g., from 30 to 99 years in certain contexts), though the specific hearing focuses on performance assessment rather than finalized amendment text.

Necessity and preliminary Impact:

(1) It promotes investment in certain types of commerce or industry that require long-term investment and the stability of lease rights.

(2) Tenants deserves the rights to the property as if they were owners within a specified period, and ownership can be conveniently transferred.

(3) Lease rights can be transferred through inheritance, subleased, and used as collateral for loans from financial institutions, increasing property value, improving liquidity, attracting investment, and stimulating the industrial and commercial sectors of the economy.

(4) Property owners have more options for utilizing their land for economic purposes.

Status:

The matter is currently at the summary of public consultation stage, where the Department of Lands invites comments and opinions through the central law system to inform the evaluation. This step ensures transparency and stakeholder participation prior to any subsequent revisions or proposals being advanced through legislative channels.

Key takeaways:

•  The hearing supports a structured review of a key land-related commercial leasing law to ensure it remains relevant for economic development.

•  Public input is actively sought to identify strengths and areas for potential improvement.

Author: Panisa Suwanmatajarn, Managing Partner.

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Sharing Economy Update: Refining Thailand’s Accommodation Act to Meet Modern Tourism Trends

Following the previously published article “Sharing Economy: Modernizing Thailand’s Accommodation Legislation for Evolving Tourism Trends” (Sharing Economy: Modernizing Thailand’s Accommodation Legislation for Evolving Tourism Trends – The Legal Co., Ltd.), which provided an overview of the first draft of the Accommodation Act (“Act”) and its efforts to modernize regulatory frameworks in response to emerging tourism models and sharing-economy platforms, the second draft of the Act has now been released and is currently open for public hearing. Whereas the first draft focused primarily on updating definitions, easing certain regulatory burdens, and recognizing new forms of accommodation, the second draft aims to enhance regulatory clarity, balance consumer protection with business flexibility, and address concerns raised during the initial hearing process.

Key Revisions in the Second Draft

The second draft introduces the following substantive revisions:

1. Electronic Systems and Electronic Transactions

The second draft establishes a clear one-year deadline for implementing the required electronic system, ensuring timely and practical deployment. It also expands the scope of electronic transactions by permitting applications, notifications, all complaints, and any other relevant issues under the Act to be submitted electronically. This enhancement improves accessibility, reduces administrative delays, and safeguards operators’ rights during system transitions.

2. Enhanced Control Over Registrar Discretion

Registrars are now explicitly prohibited from refusing registration when applicants satisfy all legal qualifications. This provision minimizes the risk of arbitrary decision-making, reduces opportunities for misconduct, and strengthens overall transparency in the registration process.

3. Exclusion of Monthly Condominium Units from the Accommodation Framework

The second draft excludes monthly condominium rentals from classification as an accommodation under this Act, thereby preventing regulatory overlap with the Condominium Act. This exclusion eliminates unnecessary regulatory burdens on long-term residents and resolves ambiguity regarding whether monthly units should fall within the definitions of hotels or accommodation.

4. Enhanced Protection for Accommodation Service Users

A new chapter introduces comprehensive consumer protection measures, including formal recognition of platform services (e.g., Agoda, Booking.com, Airbnb), fair-contract requirements preventing unilateral amendments by operators, and strengthened safety and information disclosure standards. These provisions reflect contemporary digital-era booking practices and ensure greater transparency and fairness for users.

5. Restructured Penalties and Expanded Director Liability

Penalty provisions have been reorganized to clearly distinguish criminal penalties from administrative fines, creating a more systematic enforcement structure. Director liability has been expanded to prevent avoidance of responsibility for corporate violations, while enhanced penalties have been introduced to incentivize operator compliance.

Conclusion

The second draft of the Accommodation Act, currently undergoing public hearing until 3 December 2025, reflects the government’s continued commitment to modernizing Thailand’s accommodation regulatory framework. The draft seeks to enhance regulatory clarity, balance consumer protection with business flexibility, and address stakeholder concerns raised during the initial hearing process.

Overall, the revised draft demonstrates a forward-looking approach that aligns with evolving tourism trends and supports a more efficient, transparent, and adaptable accommodation system in Thailand.

Related Article: Sharing Economy: Modernizing Thailand’s Accommodation Legislation for Evolving Tourism Trends – The Legal Co., Ltd.

Author: Panisa Suwanmatajarn, Managing Partner.

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Sharing Economy: Modernizing Thailand’s Accommodation Legislation for Evolving Tourism Trends

The tourism industry in Thailand has undergone significant transformation in recent years, driven by economic shifts and evolving consumer preferences. Previously dominated by mass tourism, the sector is now witnessing a surge in niche tourism categories, including luxury tourism, creative tourism, slow tourism, solo tourism, medical and wellness tourism, and sports tourism. This shift has fueled steady growth in Thailand’s tourism market, with small-scale accommodations such as homestays, tents, campsites, and rafts gaining popularity. Concurrently, technological advancements have revolutionized how consumers access and book accommodations, with platforms such as Airbnb, Booking.com, and Agoda facilitating seamless transactions. To address these changes and support the burgeoning accommodation sector, the Thai government is drafting the Accommodation Act B.E. ….(“Accommodation Act”), which aims to modernize and streamline legislation governing accommodation businesses. This article outlines the key provisions of the draft legislation and its implications for the industry.

Redefining “Hotel” as “Accommodation”

The existing Hotel Act B.E. 2547 (2004) defines a “hotel” as a permanent structure with comprehensive public utilities, operated for profit. This restrictive definition excludes many contemporary accommodation types, such as homestays, tents, rafts, hostels, and other non-traditional lodging options, rendering them unable to obtain legal licenses. As a result, many such businesses operate outside the regulatory framework. The draft Accommodation Act introduces a broader and more inclusive term, “accommodation,” defined as any establishment providing temporary lodging to travelers or individuals for payment or monetary benefit. This redefinition encompasses all forms of lodging, including traditional hotels, and enables these businesses to obtain legal recognition and licensing while retaining the term “hotel” within the legislative framework.

Categorization of Accommodations

To accommodate the diverse range of lodging options, the draft bill introduces three distinct categories of accommodation, each with specific regulatory requirements:

1.  Accommodation Requiring Notification: This category includes small-scale establishments with no more than eight rooms and a capacity of up to 30 guests, as well as alternative lodging types such as homestays, tents, campsites, rafts, and mobile homes. Operators in this category must notify the registrar prior to commencing operations. This provision is designed to support small-scale entrepreneurs and legalize popular, non-traditional accommodation types.

2.  Accommodation Requiring Registration: This category applies to mid-sized establishments, such as hotels with more than eight but no more than 40 rooms, and condominium units rented for short-term stays (less than one month). These businesses must register with the registrar before operating.

3.  Accommodation Requiring a License: This category encompasses larger establishments, such as hotels with more than 40 rooms, which must obtain a formal license before beginning operations.

These categories ensure that regulatory requirements are proportionate to the scale and nature of the accommodation, fostering compliance while supporting diverse business models.

Streamlining Business Operations

The draft Accommodation Act prioritizes operational efficiency for accommodation businesses. It introduces an electronic licensing and registration system to simplify administrative processes. Additionally, the legislation proposes a “Super License” system, which consolidates multiple regulatory requirements into a single license. This innovation reduces administrative burdens and redundancies, enabling entrepreneurs to focus on business development while maintaining compliance with safety and operational standards.

Addressing Gaps in Current Legislation

The Hotel Act B.E. 2547 (2004), which currently governs many accommodation businesses, is outdated and does not account for the diversity of modern lodging options. Small-scale accommodations, tents, homestays, and rafts often lack the full amenities required under the existing law, leaving them unregulated and vulnerable to legal ambiguities. The draft Accommodation Act addresses this gap by providing a comprehensive regulatory framework that encompasses all types of lodging while maintaining high safety standards for guests. This legislative update aligns with contemporary consumer demands and the growing influence of online booking platforms, ensuring that Thailand’s accommodation sector remains competitive and responsive to market trends.

Key Takeaways

•  The draft Accommodation Act modernizes Thailand’s regulatory framework to accommodate the evolving tourism industry, particularly the rise of niche and small-scale accommodations.

•  The introduction of the term “accommodation” replaces the restrictive “hotel” definition, enabling legal recognition and licensing for diverse lodging types.

•  Three distinct categories—notification, registration, and licensing—cater to different scales and types of accommodation businesses, promoting compliance and flexibility.

•  The electronic licensing system and “Super License” initiative streamline administrative processes, supporting entrepreneurs and reducing operational redundancies.

•  By addressing gaps in the Hotel Act B.E. 2547 (2004), the new legislation ensures safety standards and aligns with modern consumer preferences and technological advancements in booking platforms.

Author: Panisa Suwanmatajarn, Managing Partner.

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Investment: Government Advances 99-Year Property Lease Law to Boost Investment

The Thai government is accelerating efforts to amend the Right-Based Property Act B.E. 2562 (2019), aiming to extend the lease term for real estate from 30 years to 99 years. This legislative push is designed to attract foreign investment, stimulate economic growth, and support key national policies such as the “Housing for Thais” initiative, the Land Bridge project, and land reclamation efforts. The proposed law introduces a novel legal concept known as “right-based property”, which offers a framework for long-term property leases while ensuring assets revert to state ownership after the lease term expires. This article explores the objectives of the law, the significance of right-based property, and its anticipated economic impact.

Understanding Right-Based Property:

Right-based property, as defined under the Right-Based Property Act B.E. 2562 (2019), is a new category of property introduced to enhance the economic utility of real estate in Thailand. According to the Civil and Commercial Code, “property” refers to tangible objects, while “assets” encompass both tangible and intangible items that hold economic value and can be legally possessed. Real estate, or immovable property, includes land, structures permanently affixed to it, and associated property rights. Movable property covers all other assets, including related rights.

Right-based property, however, is a distinct legal construct that refers to the right to use and benefit from immovable property for a specified period, as stipulated in the Right-Based Property Act B.E. 2562 (2019). Unlike traditional leases under the Civil and Commercial Code, which are limited to contractual rights between parties, right-based property can be transferred, inherited, or used as collateral for debt through mortgaging. This makes it a more flexible and economically viable instrument for long-term investment.

To establish right-based property, the owner of immovable property, such as titled land, land with buildings, or condominium units, must apply to the relevant authority, typically the Land Department. The application requires the submission of documents specifying the lease term, which is currently capped at 30 years but proposed to be extended to 99 years. Once registered, a certificate of right-based property is issued, and the property cannot be subdivided or merged with other parcels during the lease term. Any modifications, such as new constructions, revert to the original property owner upon the lease’s expiration, unless otherwise agreed.

Government’s Push for 99-Year Leases:

The Thai government is prioritizing the amendment of the Right-Based Property Act B.E. 2562 (2019) to extend the maximum lease term to 99 years. The amendment aims to remove legal barriers to foreign investment, encourage large-scale real estate projects, and attract high-income individuals and skilled professionals to Thailand.

The government anticipates that the extended lease term will support transformative projects, including:

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1.  Land Bridge Project: A mega-infrastructure initiative to connect the Gulf of Thailand and the Andaman Sea, fostering trade and logistics.

2.  Land Reclamation: Private-sector-led coastal reclamation projects to create new investment zones, with long-term leases incentivizing participation.

3.  Housing for Thais: Affordable urban housing schemes integrated with reduced public transport costs (e.g., 20-baht flat-rate fares) to lower living expenses for middle-income Thais.

4.  Green Energy Initiatives: Long-term land leases for projects like solar farms, particularly in the Northeast, to produce affordable electricity (estimated at 3 baht per unit) for economic hubs like Bangkok and data centers.

5.  Talent Hub Development: Attracting high-skilled global professionals by offering long-term property rights, enhancing Thailand’s appeal as a destination for talent.

Economic and Legal Implications:

The proposed law is expected to yield significant economic benefits while addressing legal loopholes. Key advantages include:

•  Increased Foreign Investment: The 99-year lease term aligns Thailand with countries like the United Kingdom, where leases can extend up to 99 years. This makes Thailand more competitive in attracting foreign investors for high-end real estate projects, such as luxury hotels, office buildings, and residential complexes. The influx of capital is expected to stimulate economic activity without funds leaving the country.

•  Enhanced Transparency: The law aims to curb illegal practices, such as the use of Thai nominees to bypass foreign ownership restrictions. By requiring assets under the right-based property scheme to be managed by the Treasury Department and revert to state ownership after 99 years, the government ensures national control over land resources, refuting claims of “selling out” the country.

•  Support for Diverse Industries: Beyond real estate, the law facilitates long-term investments in sectors like international education (e.g., foreign ownership of international schools) and financial hubs, fostering economic diversification.

•  Addressing Demographic Challenges: With Thailand’s population projected to decline to 37 million within 50 years, the law seeks to attract high-skilled foreign workers to bolster economic growth. The extended lease term provides the stability needed to encourage long-term residency.

Safeguards and Conditions:

To address concerns about national sovereignty, the government has incorporated safeguards into the proposed law. Notably, assets under the right-based property scheme will transfer to the Treasury Department upon lease expiration, becoming part of the nation’s sovereign wealth. Agricultural land is explicitly excluded from the program to protect food security and rural livelihoods. Additionally, any property encumbered by mortgages or other rights requires consent from relevant parties before entering the right-based property scheme.

Legislative Timeline:

The government is fast-tracking the amendment process, aiming for parliamentary approval and enactment by 2025.

Conclusion:

Thailand’s push to extend property lease terms to 99 years through the Right-Based Property Law represents a strategic effort to unlock economic potential, attract global investment, and support transformative national projects. By introducing the concept of right-based property, the government offers a flexible, legally robust mechanism to enhance the economic utility of real estate while safeguarding national interests. If enacted as planned in 2025, this law could position Thailand as a leading destination for foreign capital and talent, driving sustainable economic growth in the face of demographic and global challenges.

Author: Panisa Suwanmatajarn, Managing Partner.

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Closing Nominee Loopholes: Thailand’s Legal Reform to Safeguard Property Ownership

On 24 June 2025, the Cabinet formally acknowledged the “Findings and Recommendations of the Ombudsman Regarding the Ownership or Possession of Land or Real Estate by Nominees Acting on Behalf of Foreigners.” These recommendations were submitted in response to growing concerns over the circumvention of land ownership laws by foreign nationals through the use of Thai nominees.

This initiative follows the discovery of widespread land and property acquisitions by foreign nationals, raising significant concerns regarding national security, economic stability, and equality of opportunity for Thai citizens. In numerous instances, foreigners have circumvented legal restrictions by utilizing Thai nominees to bypass requirements such as marriage to Thai citizens, land ownership through Thai children, long-term leases, and company structures that disguise actual control.

One prevalent mechanism involves establishing a Thai-registered legal entity that appears to be locally owned but is ultimately controlled by foreign interests through nominee shareholders or preference shares. This practice not only undermines the intent of existing legislation but also contributes to rising land prices, thereby reducing accessibility for Thai nationals—particularly in high-demand areas such as Bangkok and Chiang Mai.

Key Recommendations

1. Department of Business Development (DBD)

The DBD has been designated to play a central role in preventing and monitoring nominee arrangements, particularly in legal entities with foreign shareholding:

  1. System Development
  • Developing an AI-driven system to process and analyze corporate data to identify high-risk juristic persons potentially acting as nominees.
  1. Amendment to the Foreign Business Act B.E. 2542 (1999) (FBA) to include:
  • A broader definition of “foreigner” to encompass those exercising control or management through Thai nominees.
  • Clear definitions of “nominee” and “disguised transaction” to cover indirect ownership and concealed financial or property dealings.
  • Explicit inclusion of both direct and indirect shareholding in regulatory scrutiny, with enhanced qualifications for the 51% Thai shareholders.
  • Classification of legal entities controlled through preference shares as foreign juristic persons.
  • Updated requirements for registered capital, including mandatory submission of evidence demonstrating actual payment (e.g., bank statements) to prevent false declarations.
  • Designation of FBA violations as predicate offenses under the Anti-Money Laundering Act, enabling asset seizure during investigations.
  • Granting the DBD investigative and arrest powers in nominee-related offenses.
peaceful coast washed by calm water of endless ocean

2. Department of Lands

  1. Enforcement Guidelines
  • Issuance of clear enforcement guidelines and their widespread circulation to prevent land ownership by foreign nationals through nominee arrangements.
  1. Amendments to the Land Code to:
  • Increase penalties for foreigners violating land ownership laws.
  • Forfeit unlawfully held land to the state without compensation to the foreign holder.

3. Lawyers Council of Thailand

  1. Code of Ethics
  • Introduction and enforcement of a binding code of ethics that prohibits legal professionals from advising on or facilitating nominee structures.
  1. Professional Conduct Rules
  • Establishment of professional conduct rules to ensure lawyers do not support arrangements that bypass foreign ownership restrictions.

Implementation Framework

The Ministry of Commerce has been designated as the principal agency to deliberate on this matter in collaboration with relevant agencies and to submit the outcome of such deliberations to the Cabinet Secretariat within 30 days for further consideration by the Cabinet.

The Cabinet has acknowledged the Ombudsman’s findings and recommendations, directing the Ministry of Commerce to conduct a comprehensive review of the issue. The Ministry of Commerce will collaborate with 13 other agencies, including Ministry of Finance, Ministry of Agriculture and Cooperatives, Ministry of Natural Resources and Environment, Ministry of Interior, Ministry of Justice, Ministry of Labor, Ministry of Industry, Board of Investment, Royal Thai Police, Anti-Money Laundering Office, Internal Security Operations Command and Bank of Thailand.

This joint effort aims to reach a definitive resolution within 30 days, with the Ministry of Commerce responsible for submitting a summary of its findings, actions taken, and overall recommendations to the Cabinet Secretariat for further consideration.

Conclusion

The Cabinet’s recognition of the Ombudsman’s findings represents a crucial step in addressing a long-standing loophole in Thailand’s property ownership regulations. While foreign investment remains vital to Thailand’s economy, the misuse of nominee structures has distorted the property market and undermined legal integrity. The lack of unified enforcement and ambiguous legal definitions have limited the government’s ability to effectively regulate foreign participation in land ownership.

With a whole-of-government approach now underway, Thai authorities aim to restore fairness, uphold legal safeguards, and ensure that land and property ownership align with national interests. The forthcoming recommendations from the Ministry of Commerce and its partner agencies will be decisive in shaping future land policies and enforcement mechanisms.

Author: Panisa Suwanmatajarn, Managing Partner.

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Corporate Registration: Upcoming Changes to Verify Premises for Business Head Office Locations

The Department of Business Development (DBD) is set to introduce a new regulation requiring entrepreneurs to provide evidence of the right to use a premise as their business registered address when registering a new partnership or company, or when changing the registered address of an existing entity. Currently, the DBD only requires a map, address, and house code number (13-digit numbers) of the proposed head office location without verifying ownership or usage rights. However, this lenient approach is expected to change soon.

Reasons Behind the Regulatory Changes:

The upcoming changes aim to achieve several key objectives:

  1. Support Economic Analysis and Planning: Accurate and reliable data on business locations is essential for analyzing economic trends. This information will help both public and private sectors make informed decisions, formulate policies, and plan strategically.
  2. Drive Economic Growth: Transparent and credible business registration practices will enhance trust in Thailand’s business environment, making it more attractive to investors and contributing to national economic development.
  3. Prevent Fraud: The new requirements will deter fraudulent activities, such as unauthorized use of properties as business addresses, thereby protecting property owners and stakeholders from misuse.

Key Provisions of the New Regulation:

Under the new regulation, entrepreneurs will be required to submit the following documents to verify the right to use a premise as a head office:

white paper with printed texts
  1. Letter of Consent: A written consent from the owner or authorized user of the premises allowing the business to use the location as its registered office.
  2. House Registration Document: A copy of the house registration showing that the consent giver is the head of the household.
  3. Lease Agreement: A copy of the lease agreement if the consent giver is the lessee of the property.
  4. Other Ownership Documents: Any other document proving that the consent giver owns or has legal rights to the property.

These requirements are not entirely new in Thailand. For instance, the Revenue Department has long mandated similar documentation for value-added tax registration purposes. However, the DBD has been more relaxed until the enforcement of this new regulation.

When Will the New Regulation Take Effect?

The new regulation is scheduled to take effect starting March 1st, 2025. Businesses and entrepreneurs should prepare to comply with these requirements to avoid any disruption during the registration process.

Implications for Entrepreneurs and Stakeholders:

Entrepreneurs, directors, managing partners, and other relevant parties should take note of these upcoming changes and prepare accordingly. Ensuring compliance with the new requirements will not only prevent delays in the registration process but also contribute to greater transparency and credibility in the business ecosystem. By implementing these measures, the DBD aims to modernize corporate registration practices, align them with international standards, and create a more robust framework for supporting Thailand’s economic growth while safeguarding property rights.

Author: Panisa Suwanmatajarn, Managing Partner.

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