Any Special Allowance for US nationals?
Josh, a visiting American e-mailed "Recently, I was in a
bar (sound familiar), and the topic of conversation focused on land
ownership. The British fellows I was with, informed me that as an American,
because of some special treaty between the US and Thailand, it is possible
for me to own property outright here, and that I am entitled to other
preferential treatment concerning visas and the like. If this is so
could you please expound. If this is not the case, please let me know
so I can correct my English drinking buddies."
Josh, you will indeed need to correct you English buddies. It would appear that too much sun or falling into the habit of believing the urban myths that they hear told in bars has misguided them. But believe me they are not the only ones - I have received almost a dozen queries like yours in the last month - some adding the twist that Americans can own up to one rai of land in their own name.
Your friends' mistakes are however partly understandable, given that three separate bits of legislation, suitably shaken and stirred, could well have confused them into their beliefs.
Let's start with the oldest bit of legislation. Since the Vietnam war era, American citizens have benefited from something called the "Treaty of Amity" which allows that a Thai company, duly registered under the treaty (the process involves certification at the American Embassy), to be given special rights of ownership for American nationals, which allow up to 100% American ownership. A company so established can operate in most respects exactly as an ordinary Thai company - but there is one significant restriction, often overlooked - that nothing in this special incorporation changes the fact that the Land Code requires land owning companies to have at least 51% Thai shareholding.
Most Thai companies are restricted to a maximum of 49% foreign ownership
- but other than the treaty of Amity granting special right to Americans,
it is occasionally possible for ordinary Thai companies to be set up
with majority foreign ownership - though these companies have a complex
approval process and are in all cases established with very restricted
types of business activity and like the American Amity companies, may
not own land.
Currently the only real corporate exception to foreign land ownership, relates to companies that are set up with Board of Investment (BOI) approval. BOI approval is generally only given to companies that will be wholly or substantially export orientated. The special exception with these companies is that along with the BOI licence (which typically gives import duty and tax breaks) a principle foreign shareholder or director in the BOI company can be given the personal right to purchase up to one rai of land for the construction of a private home. Additionally BOI companies are frequently given dispensation to have more that 49% foreign ownership and still own the land upon which their business is established.
In legislation passed by both houses of parliament and published in the Royal Gazette, in 1999, a new law which in effect extends the rights already granted to foreign investors in BOI approved companies, allowed that any individual foreign investor investing over 40 million Baht in Thailand for over 3 years, would be entitled to purchase up to one rai of land for a private home. Sadly the implementation of this legislation has languished with the "competent" Ministry charged with working out the details of establishing exactly what would constitute as an investment in Thailand - so has yet to have been of any practical use to any well heeled foreign investors. The good news however is that the Ministry is now being challenged to respond to the issue and publish a clarification of the qualification requirements within the next 3 months.
If you drinking buddies get lucky, a forty million Baht purchase of Thai beer might qualify them to get ownership to a rai of land. Well, even if not exactly true, it would make another good bar myth.