Tag Archive: foreigners

  1. Visa amnesty to end on September 26th and another extension is unlikely

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    Visa amnesty for foreigners in Thailand, which has been extended since April of 2020, was further extended to September 26th, 2020. This extension was described as “final” by the Cabinet and another extension seems highly unlikely.  

    The visa amnesty, which was originally due to expire on July 31st was further extended until September 26th, 2020, allows foreigners to stay in Thailand without having to extend visas at an Immigration office. This applies to all foreigners whose visas did not expire before March 26th. 

    The automatic visa extension was published in the Royal Gazette and came into force from August 1st, 2020. 

     However, after September 26th, if the immigration does not extend the visa amnesty. Overstay fines and the 90-day report requirements will resume. Foreigners planning to continue staying in Thailand are advised to renew their visas and 90-day reports before September 26th 

    Foreigners who are unable to extend their visas or are unable to leave due to flight restrictions, may ask their respective embassies for an official letter permitting them to continue staying in Thailand. If they are unable to obtain a formal letter from their embassy, they would be asked to leave the country.  

    Before the visa amnesty was granted, immigration officials often required foreigners to present as many as nine separate documents to extend their stay for up to 30 days. These included land title deeds, rental agreements, and even photographs of foreigners with their accommodations. 

    If you have any questions, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2. 

  2. Thailand Property Law

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    Foreign Ownership

    Thai Law generally restricts foreigners from buying or owning land under freehold title, however it is currently possible in the following circumstances:

    • The Board of Investment (BOI) and the Industrial Estates Authority has power to permit promoted companies to own land for the purpose of the promoted business.
    • Permission can be granted under the Petroleum Act for use in approved projects.
    • Banks and financial institutes that have become foreign owned.
    • A foreigner who invests at least 40 million Baht in authorized securities in Thailand may buy up to 1 rai (1600 sq.m) for residential purposes only of the owner and their family.

    This does not cater for the majority of foreign investors. The following are legitimate ways for a foreigner to purchase a property interests in Thailand.

    Leasehold Property

    Foreigners can lease land and/or structures on short- or long-term contracts. Leases may be registered for up to 30 years and often have a renewal clause for additional periods of 30 years, however, it should be noted that Thai law provides for only one such renewal.  A recent change in the law allows leases for industrial or commercial purposes to be for a term of up to 50 years. This again is renewable for periods of 50 years.  The majority of authorities agree that any such renewal clause is enforceable as against the original lessor not, however, as against a transferee lessor.  Any lease of 3 years or more must be registered on the title to the land at the appropriate land office in order for the lease to be enforceable for any term beyond 3 years.

    Company Ownership of Freehold Property

    A Thai Limited Company can purchase land as a juristic person. The company must be allowed to own land and invest in land in accordance with its objectives and Articles of Association. Foreigners can hold a maximum of 49% of the shares in such a Thai Limited Company, the balance must be owned by Thai actual investors.

    It is also vitally important that annual accounts are completed and taxes paid on time.

    Land Title Deeds

    The preferred land title in Thailand is the Chanote (which literally translates to “Title Deed”) issued in accordance with the Land Act of 1954.  Chanotes issued under the provisions of this Act are registered with the Land Department and state the ownership, boundaries, area measurements and encumbrances (such as mortgages or servitudes) with particularity.  The purchaser of a Chanote is registered as the owner of the land with the Land Department at the time of transfer.

    Chanotes are issued by the Land Department by application from the holder of a possessory right document for the land.  There are three basic types of possessory right documents all of which are still in existence and many of which have yet to be upgraded to a Chanote.  They are the Nor Sor 3 Gor, the Nor Sor 3, and the Sor Kor 1, however, occasionally other forms of possessory documents may be encountered as part of the historical record of a plot of land.

    Of the three, the Nor Sor 3 Gor is the preferred.  This document contains an accurate measurement of the land and boundaries (but not as accurate as a Chanote), along with verification of the utilization of the land in the past.  A Nor Sor 3 is similar to the Nor Sor 3 Gor except that the measurements and boundaries of the Nor Sor 3 Gor are more accurate.  Further, a Nor Sor 3 requires a 30-day public notice period before the transfer whereas these changes can be registered with a Nor Sor 3 Gor immediately.

    Company Ownership of Freehold Property

    A Thai Limited Company can purchase land as a juristic person. The company must be allowed to own land and invest in land in accordance with its objectives and Articles of Association. Foreigners can hold a maximum of 49% of the shares in such a Thai Limited Company, the balance must be owned by Thai actual investors.

    It is also vitally important that annual accounts are completed and taxes paid on time.

    Land Title Deeds

    The preferred land title in Thailand is the Chanote (which literally translates to “Title Deed”) issued in accordance with the Land Act of 1954.  Chanotes issued under the provisions of this Act are registered with the Land Department and state the ownership, boundaries, area measurements and encumbrances (such as mortgages or servitudes) with particularity.  The purchaser of a Chanote is registered as the owner of the land with the Land Department at the time of transfer.

    Chanotes are issued by the Land Department by application from the holder of a possessory right document for the land.  There are three basic types of possessory right documents all of which are still in existence and many of which have yet to be upgraded to a Chanote.  They are the Nor Sor 3 Gor, the Nor Sor 3, and the Sor Kor 1, however, occasionally other forms of possessory documents may be encountered as part of the historical record of a plot of land.

    Of the three, the Nor Sor 3 Gor is the preferred.  This document contains an accurate measurement of the land and boundaries (but not as accurate as a Chanote), along with verification of the utilization of the land in the past.  A Nor Sor 3 is similar to the Nor Sor 3 Gor except that the measurements and boundaries of the Nor Sor 3 Gor are more accurate.  Further, a Nor Sor 3 requires a 30-day public notice period before the transfer whereas these changes can be registered with a Nor Sor 3 Gor immediately.

    The least preferable is the Sor Kor 1.  This document is an unregistered form stating a claim by an occupant of land that the land belongs to him or her.  The measurements are vague or missing and can be easily disputed.  Yet, even a simple Sor Kor 1 can be purchased from its holder and upgraded to a Chanote.

    The application process to upgrade a Nor Sor 3, or Nor Sor 3 Gor or Sor Kor 1, to a Chanote title can take anywhere from three months up to one and half years depending on the District Land Department.

    Additionally, although far less common, there are several other types of legally recognized Chanotes in existence.  These other types of Chanotes may not contain boundaries and measurements as accurate as a Land Act Chanote but they are treated the same by the Land Department as far as transfer and registration of ownership is concerned.

    In brief, the many varying land title documents encountered in Thailand stem from the complex, and sometimes conflicting, history of land development and ownership documentation.  Even a properly issued Chanote can be subject to legal attack. With this in mind, it is advisable to conduct a thorough search of the history of the land in question and the title documents associated with it.  The purchaser of land acquires any defects in the title and potential claims against it along with the land itself.

    Legal Due Diligence by qualified and experienced attorneys familiar with the history of land documents and procedures of the Land Department should always be conducted prior to purchasing any land.  This process will generally include a complete review of the title history of the land, encumbrance search, land site inspection, and verification of land use and zoning regulations.

    Ownership of Condominiums

    The rules concerning the ownership of condominiums are similar to those concerning land. Condominium units have a form of freehold title deed and ownership is transferred at the Land Department which foreigners can own. Foreigners, both natural persons and foreign-owned companies can own up to 49% of the area of a condominium project. For those who do not have resident permits there must be proof that foreign money was brought into Thailand to purchase the unit. Condominium units may also be leased by foreigners in the same way that they may lease land or structures.

    Ownership of Structures

    Structures may also be owned outright by foreigners in their own name. They should have a “superficies” (i.e. the right to own structures on land they do not own) over the land registered in their name on the title deed to the land the structure is on. If they are the first owner of the structure they should also have evidence that they built the structure such as payment records to the builder, a building contract and their name on the building permit.  If they are a transferee owner of the structure, the transfer is registered in their own name at the relevant land office and requires a 30-day public notice period before the transfer.

    Transfer of Ownership

    Ownership of land and/or structure is transferred by a written registration at the authorized Land Department. The transaction is recorded on the title deed and/or other documents. All supporting documents are kept in official records.

    If you have any questions regarding the Property Law, feel free to contact us at [email protected] or call us at +66 (0)2 117 9131-2.

  3. New Regulations on the Employment of Foreigners

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    In March 2018 the Thai cabinet approved the amendments to the Royal Ordinance on the Management of Foreign Workers Employment B.E. 2560 (2017). The amendments were published on March 27, 2018 in the Royal Gazette and are known as the Royal Decree on Managing the Work of Foreigners (No. 2) B.E. 2561 (the “Decree”).

    The new provisions set forth significant changes to the work permit procedures in Thailand. They aim at providing more clarity and removing red tape in the process of employing foreigners in Thailand, an effort that is certainly viewed favorably by foreign employees and their employers. The new provisions introduce, where possible, notification requirements rather than a permission system.

    Notable is that the definition of “work” has been adjusted, it now reads: “performing any profession, whether or not there is an employer, excluding business operations of a foreign business license’s holder under the Foreign Business Act” – as opposed to the previously wider definition of “exerting one’s physical energy or employing one’s knowledge to perform a profession or perform work, whether or not for wages or other benefits”. Notably, the new definition explicitly excludes the activity of foreigners holding or representing an entity holding a Foreign Business License (“FBL”). Therefore, foreigners working for an entity holding an FBL will not be required to obtain a work permit any longer.

    A work permit is also not required if a foreigner enters the Kingdom only temporarily. The modified Section 4 of the Decree provides the following additional work permit exemptions:

    • Entering Thailand to organize or attend a meeting; this includes the participation in a pro-active way and allows the participant to give opinions, lectures and presentations.
    • Entering Thailand to organize or attend training, workshops or seminars
    • Entering Thailand to organize or attend art and/or cultural exhibitions, sports competitions or any other activities, as prescribed by the Thai cabinet.

    The work permit exemptions under Section 4 also include foreigners who are investors or operators of businesses, experts or highly skilled professionals with knowledge that could be beneficial to Thailand’s development, as prescribed by the Thai cabinet.

    It is now possible to submit an application for a work permit online, within Thailand or from outside the country. Furthermore, the processing time for issuing a work permit will not exceed 15 working days once a completed application has been submitted to the Department of Employment.

    Finally, it should be noted that employer and foreign employee are obligated to notify the registrar within 15 days about the employment or any changes. Failure to do so will lead to a fine ranging from THB 20,000 to THB 50,000.

    Particularly with regard to foreigners who work without a work permit, imprisonment is no longer stipulated by the provisions. Now, with the effective Royal Decree (No. 2) B.E., a foreigner who works without a work permit is subject to a fine of THB 5,000 to THB 50,000.

    Employers who hire a foreigner without the relevant work permit will face a reduced fine of THB 10,000 to THB 100,000 per employee. An employer who repeats this offence shall be punished with imprisonment up to 1-year and/or a fine ranging from THB 50,000 to THB 200,000. Moreover, the employer will be prohibited from employing foreigners for three years.

    It will be interesting to see the implementation of the new rules in practice – we will keep you informed.

  4. Visa / Work Permit for Foreigners with Thai Spouse

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    If a foreign employee is married to a Thai citizen, the foreigner may apply for a non-immigrant-O-visa (dependent visa) in Thailand. For the one-year extension of such visa, issued by the Immigration Office, in particular the following will be required:

     

    • Marriage certificate;
    • Evidence of income of not less than 400K/year, e.g. bank statement;
    • ID card of the spouse; and
    • Physical presence of the spouse.

     

    The foreigner is then entitled to apply for a work permit under privileged conditions from the Department of Employment. For such work permit, in particular the following will be required with regards to the employer:

     

    • Capital of 1 Million THB for this foreigner and
    • 2 Thai staff employed for this foreigner.

     

    There is no requirement for a non-immigrant-B-visa in connection with such work permit, the non-immigrant-O-visa is sufficient. However, if a non-immigrant-B-visa is preferred and applied for, please note that 2 Million THB capital are still required for such visa application.

     

     

  5. Usufruct – A Feasible Option for Foreigners in Thailand?

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    Foreigners in Thailand have the possibility to register a usufruct related to a land plot or other real property.

    1. Characteristics

    A usufruct provides limited property rights and is a legal right to the use and enjoyment of immovable property, including commercial benefits of property belonging to another person, according to the CCC section 1417. A usufruct is registered on the title document. It may be created either for a specified period (not exceeding 30 years) or for the life of the beneficiary of the usufruct (the “usufructuary”).

    A usufruct always expires upon the demise of the holder of the usufruct and, therefore, may not be inherited.

    The property may not be damaged or altered in any way by the usufructuary. He must keep the property intact and returned as in the initial state. The usufructuary is responsible for the costs of maintenance of the property, for paying taxes and duties and for interests payable on debts charged to it. If required by the owner, the usufructuary shall insure the property against loss for the benefit of the owner. He must pay the insurance premiums for the duration of the usufruct.

    2. Flexibility of the Usufruct

    The usufructuary may lease or rent out the land and receive payment under a rental agreement. He may also transfer his rights to the usufruct to a third party (Section 1422 of the Civil and Commercial Code). The owner of the property, however, will still claim for damages caused by the third party directly against the usufructuary.

    The usufructuary has no power to prohibit the owner to sell the property without damaging the usufruct. Therefore, no consent is required from the usufructuary if the owner wants to sell the property. However, the usufruct is a real right that remains valid for any third party, including a new owner. In the case of any transaction which damages the usufruct, the usufructuary can file an objection or force the receiver to register the usufruct.

    3. Discretion of the Land Office

    Foreigners are not restricted with regards to the registration of a usufruct, however, as for all rights over property, it should be noted that the registration of such a right is at the discretion of the officer in charge at the Land Department and may vary depending on the location.