Understanding Property Ownership Structures in Phuket

Phuket’s property market offers a wide range of opportunities for foreign investors, but one of the most important aspects to understand before making a purchase is the legal ownership structure. Unlike in many Western countries, land ownership in Thailand is highly regulated, particularly for foreigners. However, there are several legal and secure methods available that allow foreigners to invest in property with peace of mind. Below is a comprehensive overview of the most common ownership structures available in Phuket today.

Freehold Ownership – Condominiums Only

The most straightforward method for foreigners to own property in Thailand is through freehold condominium ownership. Thai law allows foreigners to own up to 49% of the total sellable area in any registered condominium project. This means that a foreign buyer can have full legal ownership of a condominium unit, including a title deed in their own name, registered directly at the Land Office. This type of ownership is the most secure, as it offers full control over the unit, including the ability to sell, lease, or pass it on to heirs without involving any third party or additional legal structure. However, this type of ownership is only applicable to condo units and does not extend to land or standalone villas.

Standard Leasehold – 30+30+30 Years

For those looking to own a villa or a piece of land, the most common method is through a leasehold agreement. The standard leasehold structure in Thailand allows a foreigner to lease land or property for an initial term of 30 years. Most lease agreements will also include the option to renew for two additional 30-year terms, commonly referred to as 30+30+30. While this provides a total of 90 years on paper, only the first 30 years can be officially registered at the Land Office. The remaining renewal periods are contractual promises and must be re-registered when the time comes. This method is widely used and accepted, especially in high-end villa developments, but it’s important to note that these renewals are not always automatically guaranteed unless the lease agreement includes strong legal protections and the lessor is cooperative.

Protected Leasehold with BVI Company Structure

To provide added security and flexibility for foreign investors, some developers structure ownership through what is commonly known as a protected leasehold using a BVI (British Virgin Islands) company or other offshore entities. In this setup, the land is owned by a company in which the buyer holds shares, while the property itself is leased back to the buyer for residential use. Because the buyer controls the land-owning company, they effectively control the lease and its renewals. This structure allows for a more secure and manageable form of leasehold, especially when it comes to resale. A new buyer can acquire the shares of the company, thereby stepping into the same position of control over the lease and its terms. This approach is commonly seen in upscale developments where long-term foreign ownership and resellability are key selling points.

Guaranteed Leasehold with Renewable Lease Rights

A step beyond the protected leasehold is what some developers are now offering as a guaranteed leasehold with renewable lease rights. This modern approach not only offers a 30+30+30 year lease term, but also includes contractual and structural guarantees that allow the lease to be renewed again even after 90 years have passed. In such structures, when the property is resold, the incoming buyer is offered a brand-new lease of 30+30+30 years again, rather than inheriting only the remaining term of the previous lease. Furthermore, once the full 90-year period concludes, the original leaseholder or their successor can continue renewing the lease, typically through a land-holding company that remains under their control. This setup, often referred to as a “perpetual lease,” is growing in popularity for those looking for long-term value and secure succession planning. It also makes the property more attractive to future buyers, knowing they too can obtain a full lease period without complications.

BOI (Board of Investment) Land Ownership

There’s a unique and less commonly used method involving the Board of Investment (BOI). In certain cases, foreign investors who are part of BOI-promoted businesses may be granted permission to own land for business or investment purposes. This usually applies to companies involved in projects that contribute to Thailand’s economic development, such as high-tech manufacturing or tourism infrastructure. While this route is not typically used for residential property purchases, it can be an option for those setting up a business that meets the BOI’s criteria. Land ownership through BOI approval is subject to strict conditions, including how the land is used and how long the foreigner can maintain ownership.

Final Thoughts

Each of these ownership structures has its own pros, limitations, and legal considerations. For any foreigner looking to invest in Phuket property—whether it’s a beachfront condo, a luxury villa, or a long-term investment—it’s essential to understand these frameworks and choose the one that best aligns with your goals. Working with an experienced property consultant and a trusted legal advisor can ensure that your investment is not only legally sound but also aligned with your long-term vision.

If you're considering buying in Phuket and need help understanding which ownership structure is best for you, I can guide you through the process and introduce you to experienced legal professionals for due diligence and contract review.