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Thailand has very well-known laws governing foreign ownership of landed property, laws which essentially forbid titling any land in the name of a foreigner. There are restrictions in Thai law which prevent foreigners from owning landed property. This includes not only parcels of land, but also landed houses or villas. Foreigners must accept that if they attempt to circumnavigate the law without the proper legal advice there are risks involved.
A common way to try and circumnavigate the law is for a foreigner to set up a Thai Company Ltd. But to be done correctly, the company must be run as a legitimate business. This means that they generate revenue and has proper Thai shareholders (nominee shareholders in Thailand are illegal). The Thai shareholders they find should be legitimate investors, as well as interested parties who have a say in running the company going forward. A foreigner may not own more than 49% of the shares. Leasehold is an arrangement whereby you are effectively renting a property (long-term) from the actual owner (who is themselves the “freeholder”). With very few exceptions, any foreigner in Thailand who wants to own landed property (e.g. a house or a villa) is instead restricted to a lease, which may be no longer than 30 years.
As a lessee, the foreigner is given “exclusive possession” (the right of undisturbed possession), meaning they may use the property as either a home or a rental property for the duration of the lease. Every lease must be registered at the local Land Office, and once this is done the lease agreement acts as lien against the title deed. This actually makes the legal standing of a foreign lessee more secure than that of a foreigner using an illegitimate Thai Company.
Many developers also have clauses in a sale and purchase addendum that, upon expiry of the initial lease term, the lease will be renewed for a further two 30-year terms, effectively making the lease term 90 years (often referred to as 30+30+30). Although under Thai law these renewals can only be promises, using a reputable developer and an experienced lawyer can ensure a successful renewal. Another option for foreigners is to own the actual building, but to lease the land it sits on from the freeholder. The freeholder may be an individual or a company (e.g. a developer).
Because the restrictions on land ownership do not apply to building ownership, some foreigners take out a 30-year lease on a plot of land, then proceed to build their dream villa on that land.