For foreign property buyers in Thailand, one legal structure has long been used to navigate ownership restrictions: the nominee arrangement. Now the Thai government has signalled it intends to enforce existing laws more strictly, especially for large land holdings.
Prime Minister Anutin Charnvirakul stated this month that the government will intensify its campaign against illegal nominee usage, particularly targeting large land plots. The announcement came in response to allegations that Chinese investors were buying land in Thailand’s Eastern Economic Corridor without proper compliance.
The Prime Minister firmly rejected claims of indiscriminate land purchases, stating that all developments must comply with Thai law. But the commitment to stricter enforcement is clear.
What nominee arrangements actually are
Thai law restricts foreign ownership of land. Foreigners may own condominium units, but only up to 49 percent of a building’s saleable area may be foreign-owned. Freehold land ownership by non-Thai nationals is generally prohibited.
To work around this, some buyers have used nominee structures: Thai nationals hold land on paper, while a foreigner controls or benefits from the property through loans, agreements or other arrangements.
This has always been illegal under Thai law. The Land Code prohibits nominees. In practice, enforcement has been inconsistent.
The government’s statement suggests that inconsistency may be ending, at least for large or conspicuous holdings.
Why the crackdown is happening now
The Eastern Economic Corridor is a government-led development zone spanning three provinces east of Bangkok. It has attracted significant foreign investment, including from China.
Concerns have been raised publicly about whether some land purchases in the EEC involve nominee arrangements that allow foreign entities to control Thai land in violation of the law.
The Prime Minister’s response was both a denial and a warning: developments must follow the law, and the government will act against illegal structures.
The emphasis on large land plots suggests the government is prioritising enforcement where the scale of the holding raises economic, security or political concerns.
What this means for Phuket property
Phuket is not the Eastern Economic Corridor. But the legal framework is the same, and the enforcement signal applies nationwide.
Foreign buyers in Phuket have long favoured two structures: condominium ownership, which is straightforward and legal, or leasehold arrangements on land and villas, which are also clearly permitted under Thai law for terms up to 30 years with potential renewal.
Nominee arrangements have been used by some buyers who wanted freehold control of land or standalone villas. Those structures were always legally questionable. The government’s statement makes clear that the risk is no longer theoretical.
For buyers, sellers and agents in Phuket, the implication is straightforward: structures that rely on nominees to circumvent foreign ownership restrictions are now more likely to face scrutiny, investigation or enforcement action.
The focus on large plots may mean smaller residential holdings are lower priority. But the legal risk exists regardless of size.
What remains legally sound
Foreign ownership of condominium units remains fully legal and unaffected by the government’s statement, provided the 49 percent building quota is respected.
Leasehold agreements for land and villas are also legal, provided they are genuine leases and not disguised ownership structures.
Thai company structures that involve genuine business activity, proper capitalisation and real Thai shareholders may also be compliant, but only where the company serves a legitimate commercial purpose and the Thai shareholders are not simply nominees.
The key distinction is whether the structure is real or a shell designed solely to evade foreign ownership restrictions.
What buyers should watch
The government has not announced specific new legislation. The statement refers to existing law and increased enforcement.
What is unclear is how enforcement will be applied in practice, whether it will focus only on new transactions or also target existing holdings, and whether smaller residential properties will face the same level of scrutiny as large land acquisitions.
Buyers should ensure any ownership structure is legally sound and documented by a qualified Thai property lawyer. Agents and developers offering ownership structures that rely on nominees should be approached with caution.
For existing owners who hold property through nominee arrangements, the risk profile has changed. Legal review is advisable.
Frequently Asked Questions
What is a nominee arrangement in Thai property law?
A nominee arrangement involves using Thai nationals to hold legal title to land on behalf of a foreigner, allowing the foreigner to control or benefit from the property while circumventing foreign ownership restrictions. This structure has always been illegal under Thai law.
Does this crackdown affect foreign condominium ownership in Phuket?
No. Foreign ownership of condominium units remains fully legal in Thailand, provided the foreign-owned portion of the building does not exceed 49 percent of the total saleable area. The crackdown targets illegal nominee land ownership.
Are leasehold villa agreements still legal?
Yes. Leasehold agreements for land and villas are legal under Thai law for terms up to 30 years, with the possibility of renewal. The key requirement is that the lease must be genuine, not a disguised ownership structure.
Will the government investigate existing nominee arrangements or only new ones?
The Prime Minister’s statement does not clarify whether enforcement will apply retrospectively to existing holdings or focus on new transactions. The legal risk exists for both, but the enforcement approach remains unclear.
What should foreign buyers in Phuket do now?
Buyers should ensure any ownership structure is legally compliant and documented by a qualified Thai property lawyer. Avoid structures that rely on nominees. For existing owners holding property through questionable arrangements, legal review is advisable.
Sources
- The Phuket Express — Top National Thailand Stories From the Past Week: Transnational Cannabis Smuggling Crackdown Tightens, and More — link
