Tighter land checks threaten nominee routes used by foreign buyers in Thailand

Thailand tightens the grip on nominee land purchases

The Thai government has moved to tighten controls on how foreigners can acquire land in Thailand, in a set of measures that will directly affect the real estate Thailand market. The Department of Lands has announced new, more intrusive checks designed to stop the use of Thai nationals as nominees for foreign landholders. For buyers and investors this means more paperwork, slower transactions and a higher bar to prove that a purchase is genuinely Thai-owned.

These changes are a clear response to long-standing attempts to bypass Thai landholding rules. They are sensible from a rule-of-law perspective, but they raise immediate practical questions for anyone planning a land purchase, corporate acquisition or long-term lease involving foreign parties.

What the new measures actually require

Officials will apply enhanced scrutiny across several specific scenarios. The measures in the Department of Lands guidance include:

• Thai nationals with foreign spouses must confirm the purchase funds are “personal property”, not “marital property”. If a mortgage, lease or other benefit is granted to the foreign spouse and judged to facilitate an effective foreign holding, the deal is subject to further review.
• Transfers to minor children of foreign nationals will be closely investigated to prevent the use of minor children’s names as a legal channel for foreign landholding.
• Companies with foreign shareholders or foreign directors will face greater checks on land purchases worth THB 5 million or more, and on cash payments of at least THB 2 million. Authorities will check whether Thai shareholders are acting as nominees, whether the sources of capital are transparent, and whether declared income and financial status align with the transaction value.
• If a company buys land for more than its registered capital and no related mortgage exists, officials will examine the source of capital to determine credibility.
• Leases or long-term rights held by foreign juristic persons will be inspected to assess whether the arrangement breaches the 1999 Foreign Business Act; if clear evidence is not provided, the arrangement may be presumed to be landholding on behalf of a foreign national.
• Every province will establish an inspection committee composed of administrative officials, land officials, local administrative organisations, provincial commerce offices and other relevant agencies, to monitor suspicious cases on an ongoing basis.

Officials also say that where suspicious circumstances suggest the land is being held on behalf of a foreign national, the matter will be referred to the minister for consideration of further action.

Why the authorities are acting — and what they want to stop

Thailand’s land law and the 1999 Foreign Business Act restrict foreign ownership of land. Those restrictions have led to informal workarounds: Thai nominees holding title for foreign investors, corporate structures that obscure ultimate beneficial ownership, or leases that are argued to be commercial rather than effectively a transfer of ownership.

The Department of Lands approach appears designed to:

• Reduce nominee arrangements where Thai nationals hold legal title on behalf of foreigners.
• Make funding sources transparent so the state can determine if an entity’s declared capital actually matches its spending power.
• Prevent circumvention of the Foreign Business Act through long-term leases or rights that in substance give foreigners land control.

From a governance standpoint this is about protecting the integrity of land registration and reassuring Thai landholders and policymakers that rules are enforced. From a market standpoint it will reduce grey-area deals and may push more foreign buyers toward legal forms of property access, such as condominium freehold (subject to quotas) or properly structured investment vehicles that comply with Thai law.

Practical implications for buyers, investors and developers

We have two immediate takeaways: buyers must be better prepared, and structures that once worked informally now carry higher legal and transactional risk.

Key implications:

• Due diligence will take longer. Expect deeper background checks on buyers, beneficial owners and financing. Closing timelines likely extend.
• Documentation of the source of funds becomes essential. If you have a foreign spouse or foreign stakeholders, prepare notarised bank statements, loan documents and proof of where funds originated.
• Corporate buyers should review their corporate records and registered capital. A firm buying land for more than its registered capital without a clear mortgage or credible funding explanation will attract scrutiny.
• Cash-heavy deals above THB 2 million will trigger closer inspection. Large cash purchases are no longer a straightforward route to speed up acquisition.
• Long-term lease structures that have been used to get around foreign ownership restrictions will face tests against the 1999 Foreign Business Act — authorities will ask whether the use of the land effectively gives foreign control.

We advise clients and readers to assume that transactions that once closed on the basis of informal arrangements may now be paused, re-examined, or referred to higher authorities for interpretation. That uncertainty is a transactional risk and a potential cost.

How this affects different types of buyers

Different buyer profiles will feel the reforms in different ways.

• Foreign individuals purchasing property indirectly through Thai spouses or relatives: You must prove the purchase funds are personal to the Thai purchaser. If the foreign spouse receives a mortgage, lease or other benefits tied to the land, expect extra scrutiny.

• Foreign-owned companies or companies with foreign directors: Purchases at or above THB 5 million will face checks on shareholder structure and capital. Authorities will look to ensure Thai shareholders are not holding shares on behalf of foreigners.

• Companies that have low registered capital but buy expensive land: Buying land at a price higher than registered capital will raise flags unless there is clear documentary evidence of funding sources and legitimate mortgages.

• Foreign juristic persons taking long-term leases: The Department of Lands will evaluate whether the lease breaches the 1999 Foreign Business Act; absent clear evidence of lawful purpose, leases may be presumed to be de facto foreign landholding.

• Investors using minors’ names: Transfers to minor children of foreign nationals will be investigated in detail, increasing legal exposure for these arrangements.

Risks for foreign investment and market liquidity

These measures aim at legal clarity, but they introduce friction. Our analysis suggests three main market risks:

1. Slower deal flow. Enhanced checks and provincial committee reviews will slow down closings and increase transaction costs.
2. Higher compliance costs. Legal fees, certified translations, bank traceability and more intensive structuring will raise the break-even point for smaller investors.
3. Potential for rejected or unwound deals. If authorities determine land is being held on behalf of a foreigner, they may seek remediation, which could include transfer reversals or penalties.

That said, this is not an attempt to close the Thai market to foreigners. It is a tightening of enforcement against opaque ownership structures. Honest, well-documented investors who follow the right legal channels should be able to proceed, albeit with more formalities.

How to prepare: practical checklist for buyers and advisers

If you are considering a land purchase or corporate acquisition in Thailand, take these steps now:

• Hire qualified Thai legal counsel experienced in land law and cross-border structures.
• Prepare comprehensive source-of-funds documentation: bank statements, loan agreements, transfers and notarised affidavits where required.
• If you are a Thai national with a foreign spouse, prepare a legal declaration or documentation showing the funds are personal property rather than marital assets. Consider prenuptial agreements or clear bank trails.
• For corporate buyers, ensure your company’s registered capital is credible for the intended purchase, and document any capital injections, shareholder loans or equity placements.
• Avoid cash transactions where possible.