Tag: Property and Real Estate

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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:

an aerial view of a large warehouse with trucks

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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BOI: Investment Strategy to Become a Global Digital-AI Hub and Bioeconomy Leader

The Board of Investment (BOI) has unveiled a comprehensive strategy aimed at transforming Thailand into a leading regional investment hub by focusing on five key areas that leverage the country’s strengths in innovation, sustainability, and advanced industries. These initiatives are designed to bolster Thailand’s competitiveness amid global economic uncertainties, geopolitical tensions, and climate change challenges.

Strengthening Thailand’s Position as a Regional Investment Hub:

The BOI approved three major investment projects valued at over 170 billion baht, including a TikTok data center, Siam AI cloud services, and potash production by Asia Pacific Potash Corporation. These projects underscore Thailand’s growing status as a digital and AI hub, with expectations of continued investment in Big Data and artificial intelligence. This aligns with the government’s vision of positioning Thailand as a leader in the regional digital economy.

Promoting the Bioeconomy and Sustainable Resource Utilization:

To solidify Thailand’s role as a bioeconomy leader, the BOI introduced incentives for Sustainable Aviation Fuel (SAF) production. Projects using agricultural-based SAF will receive an 8-year tax exemption, while blended SAF projects qualify for a 3-year exemption. Additionally, agricultural and food industrial parks have been reclassified as bio-industrial parks, eligible for a 5-year tax exemption under the Bio Circular Green (BCG) framework. These measures aim to add value to local resources and drive sustainable economic growth.

monochrome photo of triangle shape digital wallpaper

Comprehensive Strategy for Growth: Five Pillars:

1. Enhancing Competitiveness in Strategic Industries:

The BOI is prioritizing investment in five high-potential sectors: bio circular green (BCG), electric vehicles (xEV), semiconductors/advanced electronics, digital technologies, and International Business Centers (IBC). To attract more foreign direct investment (FDI), the BOI plans to expand its international presence by opening new offices in Chengdu and Singapore. These efforts are complemented by targeted promotional activities and collaboration with national boards overseeing EVs, semiconductors, and soft power initiatives.

2. Supporting SMEs and Local Supply Chains:

Recognizing the critical role of small and medium-sized enterprises (SMEs), the BOI will enhance support for Thai businesses to improve production efficiency and integrate into global supply chains. Special attention will be given to the EV and electronic circuit board industries, where measures will encourage the use of locally manufactured components and foster industrial linkages.

3. Developing a Highly Skilled Workforce:

In partnership with the Ministry of Higher Education, Science, Research, and Innovation (MHESI) and private sector stakeholders, the BOI will focus on developing a skilled workforce tailored to the needs of target industries, such as semiconductors, printed circuit boards (PCBs), artificial intelligence (AI), and digital technologies. A clear roadmap will guide these efforts, alongside streamlined visa processes (LTR and Smart Visas) to attract global talent. The One-Stop Service Center for visas and work permits will also be expanded to facilitate smoother entry for foreign experts.

4. Modernizing Infrastructure and Regulatory Frameworks:

The BOI will collaborate with relevant agencies to develop critical physical and digital infrastructure, ensuring it meets the demands of growing industries. Efforts will also focus on land acquisition, regulatory reforms to remove investment barriers, and addressing the implications of the Global Minimum Tax through cooperation with the Ministry of Finance.

5. Advancing Green and Sustainable Investments:

Sustainability remains a cornerstone of the BOI’s strategy. Incentives will be provided for investments in renewable energy, recycling, and eco-friendly products. The BOI will promote the adoption of energy-efficient machinery and reduce greenhouse gas emissions. Furthermore, partnerships with the Ministry of Energy and the Energy Regulatory Commission will facilitate access to clean energy for target industries through mechanisms like Utility Green Tariffs (UGT) and Direct Power Purchase Agreements (DPPA).

blue bright lights

Conclusion:

These strategic initiatives mark a significant advancement in Thailand’s economic development. By prioritizing key sectors, fostering innovation, and creating a conducive investment environment, the BOI is positioning Thailand for sustained growth and an enhanced presence on the global stage. Investors and businesses are encouraged to remain informed about ongoing developments as these strategies are implemented, paving the way for Thailand to emerge as a premier investment destination in Southeast Asia.

Author: Panisa Suwanmatajarn, Managing Partner.

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BOI: New Regulations Governing Land Ownership for Foreign Juristic Persons

On 9 December 2024, the Board of Investment (BOI) enacted Notification No. 16/2567, establishing new criteria for granting permission to promote foreign juristic persons to own land for office and residential purposes. This notification supersedes the previous Notification No. 6/2565, which had been in effect since 2022.

The Investment Promotion Act B.E. 2520 (1977) grants special privileges to BOI-promoted businesses, allowing foreign entities to own land beyond the limitations imposed by general land laws. This amendment aims to facilitate business operations while enhancing clarity and flexibility in the regulatory framework.

Key Provisions of the Amendment

  1. Eligibility
    • Foreign juristic persons with a minimum paid-up registered capital of 50 million baht are eligible to own land.
  2. Land Ownership Limits
    • Office Use: Up to 5 rai.
    • Residential Use: Up to 20 rai for constructing accommodation specifically for operational-level employees in a building form.
    • Land designated for office and residential use may be located within or outside the same area as the business premises.
  3. Special Considerations
    • The BOI may grant exceptions on a case-by-case basis if special reasons or necessities arise.
  4. Land Disposal
    • Foreign juristic persons must dispose of or transfer the land within one year after ceasing to qualify for investment promotion.
  5. Further Regulations
    • The BOI Office has the authority to issue additional criteria such as the type of business, distance from the business site, and residential unit specifications.
birds eye view of a cityscape

Key Amendments from the Previous Notification

  1. Repeal of Provisions for Executive and Expert Accommodation
    1. Clause 1.2 of the previous notification, which allowed land ownership for accommodation of executives and experts, has been repealed.
  2. Restriction on Residential Use
    1. Land ownership for residential purposes is now limited to the construction of accommodation exclusively for operational-level employees, replacing the broader term “workers”.
  3. Supplementary Regulations
    1. Additional criteria will be issued to provide further clarity on business types, land specifications, and proximity to business operations, ensuring compliance with operational and environmental requirements.

Conclusion

This announcement takes effect immediately. Supplementary regulations may be further issued, so promoted enterprises are encouraged to stay informed of any subsequent notices to ensure compliance with the regulations.

Author: Panisa Suwanmatajarn, Managing Partner.

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