Ownership Options with Thai Spouse
Eric from Sweden, recently inquired "I'm married to a Thai
national from Phuket and am interested in buying land and a house in
Phuket. What kinds of options do we have for property ownership? Can
property be purchased in my wife's name with her as the legal owner?
Or, could we get creative and set up a corporation to own the land with
her holding 51% of the shares and me holding 49%?."
As a foreign national with a Thai wife, you have (as you suggested) several options when it comes to buying a home in Thailand - and indeed the process has become even easier in the last few years.
Until two years ago, a Thai who married a foreigner lost their rights to acquire land, but subsequent to legislation in 1999 this is no longer the case - however if the Thai spouse of a foreign marriage wants to buy land, they will be required (and the foreign spouse certify) that the funds for the purchase of the land are the sole property of the Thai spouse. This little twist has significance in as much as in the event of a divorce, it means that the foreign spouse would have no claim against this property (which would have been excluded from the common property of your marriage) and further if the Thai spouse pre-deceases the foreign spouse, there is no direct claim or right of inheritance over the Thai property.
To solve the limitations noted above there are several options. First it is important to remember that the ownership of buildings and improvements on land can be held directly in a foreign name - or even a joint Thai and foreign name - and it is quite possible for the ownership of the building and the land to be different.
To retain some interest in the land, which you cannot own, there are two options, first a 30 year lease (to which renewal and purchase options can be addended) can be registered over the land in a foreign name. This however will incur a 1.5% fees for registration and duty stamp and further, the lease value will be deemed taxable income of the Thai owner (Thai spouse). A 30 year lease, correctly written and registered, will however be enforceable over heirs - and will also be deemed a common property of a marriage, in the event that you and your Thai spouse were to split up and get divorced.
Turning your married life corporate is the second option - a Thai company 51% owned by your Thai spouse and 49% by you (actually it's slightly more complex because you need at least 7 shareholders, but the other 5 need only hold one share each) could own land and (if appropriate) your house as well.
If you take this approach, even though a company of this type is in effect (at least from your perspective) a personal property of a marriage, it will still be expected by the revenue department to act in a commercially viable way. Let me expand on that - if the company just owned land - and did nothing with it that could probably be deemed viable as a long term investment - but if a house (that can be depreciated on the books) was built on the land, the company would then be expected to show some revenue against the house, the shareholders (you) can't simply live in the home for free. Either a small rent should be paid by you personally to your company - a rent which shows a plausible profit to the company after depreciation - and upon which corporate tax should be paid, or in the event that the house becomes the head office of a small operational business that you and your spouse operate and you (as staff are given) the house as company housing, the company would not need to show a rent income on the home, but the value of that lodging will be deemed a taxable part of your salary.
The long and the short, is that it's rarely as simple as you first expect, if you want to comply with every law and satisfy every potential challenge, but it is still quite possible and fully legal. Which of the above approaches makes most sense to you depends a lot on your personal circumstances and the size/value of the property you plan to purchase. Discuss it carefully with a qualified advisor or tax consultant and consider the various costs/ tax considerations in detail before making a final decision.