You want a villa with its own plot in Phuket — and hit the rule: a foreigner can’t own land directly in Thailand. One solution is the Thai company structure. It’s legal when set up correctly, but it needs real substance and carries risks if used “for show” — all the more so against the backdrop of the authorities’ campaign against nominee schemes, running since 2025–2026. Here’s how it works, how it differs from leasehold, what it costs to maintain, how such a structure is sold and inherited, and what to watch so it holds up.
Contents
- Why land can’t be direct
- The company structure
- How it works
- How the company and the deal are registered
- Real economic substance
- The nominee crackdown: what’s happening in 2025–2026
- Company vs leasehold
- What maintaining a company costs
- Resale: shares or asset
- Inheriting the structure
- Pros and cons
- Pitfalls
- Case: a nominee company
1. Why land can’t be direct
Under Thailand’s Land Code, a foreigner can’t own land directly (with rare exceptions — for instance BOI investment regimes for large projects, which have nothing to do with buying a villa). However, a foreigner can register a building (villa) — the structure is legally separated from the land, and the right to it is registered separately; this is done via ownership of the building or a superficies. So for a villa with a plot there are two basic schemes: a land lease (leasehold) or a Thai company that owns the land.
It’s worth setting the emphasis right from the start. The ban is not a formality that “everyone gets around”: when registering the deal, the Land Department checks the structure of a corporate buyer, and the law expressly prohibits holding land through front persons. Everything described below works in one mode only — a legal company with real substance.
🔗 Ownership forms: Foreigner ownership →
2. The company structure
The idea: a Thai Limited company owns the land, and the foreigner controls it. By law Thai shareholders must hold at least 51%, the foreigner up to 49%, but control is achieved via management (director) and a voting share class. The villa can be owned by the foreigner while the land sits with the company.
In a correct structure, control rests on three pillars:
- Directorship. The foreigner is a director with sole signing authority: without their signature the company cannot sell the land, mortgage it or amend the articles.
- Share classes. The articles can provide for preference and ordinary shares with different voting “weight” — so the foreigner’s minority stake by capital gives a majority of votes at the meeting.
- Articles of Association. Quorum, the procedure for calling meetings, pre-emption rights — all of this is drafted to protect the investor.
Note that none of the pillars replaces the requirement that the Thai shareholders be real. Share classes protect control of a legal structure — they don’t turn a nominee scheme into a lawful one.
3. How it works
- Shareholders: ≥51% Thai, ≤49% foreigner. Since the 2023 corporate-law reform a company needs only two shareholders (previously three).
- Control: foreigner as director with signing authority; enhanced-voting shares.
- Land: registered to the company, with the Chanote issued to the legal entity.
- Villa: can be registered to the foreigner separately.
- Management: the director decides within the company’s articles.
- Activity: the company runs real operations (most often renting out the villa) and files accounts.
In practice the life cycle looks like this: the company buys the land → the villa is built/registered to the company or to the foreigner → the company rents out the villa (or provides it to the shareholder under a contract) → accounts are filed and audited every year. Every element skipped from this cycle weakens the structure.
4. How the company and the deal are registered
Step by step, the process looks like this:
- Structuring with a lawyer. Shareholders, share classes, the articles and the source of each shareholder’s contribution are defined. This is the most important stage — it’s where resilience is built in.
- Registering the company with the DBD. The Department of Business Development (dbd.go.th) registers the legal entity: name, capital, shareholders, director. The company receives a registration number and appears in the public register — any lawyer can check it.
- Checking the property. Standard due diligence on the land: title, encumbrances, zoning, access. For the villa — the building permit and whether what was built matches it.
- The transaction at the Land Department. The company acquires the land; the registrar checks the structure of the corporate buyer, including the shareholder composition. If the level of foreign participation raises questions, proof of the Thai shareholders’ source of funds may be requested.
- Registering the villa. The building is registered to the foreigner (or stays with the company — depending on the chosen configuration and tax consequences).
- Bringing the company to life. Opening a bank account, accounting, lease agreements, the first filings.
On timing, registering the company itself is a matter of days; the full cycle including the transaction usually takes several weeks, depending on how ready the documents are and the queue at the Land Office.
5. Real economic substance
The key legality requirement is that the company be genuine, not an empty shell “to hold land.” Signs of a correct structure:
- Real activity or business logic (e.g. villa rental).
- Thai shareholders are real people with their own contribution, not “nominees.”
- Accounting is kept, filings are made, taxes are paid.
- Compliance with the Foreign Business Act.
What “real shareholders” means in practice: the Thai partner has their own funds paid into the capital (and can show where they came from), knows the company’s affairs, attends meetings and receives dividends when they are distributed. The Thai shareholders’ source of funds is the very first thing checked — by the Land Department at the transaction and by investigators during nominee crackdowns.
The most natural way to give the structure substance is a rental business: the villa is let, the company earns revenue, pays taxes and distributes profit. That is both the economic rationale and the structure’s protection. We collect villas with a working rental model in our rental-income villas selection.
An empty company with nominee Thais “to get around” the law is a direct risk.
6. The nominee crackdown: what’s happening in 2025–2026
The substance requirement has stopped being theory. Since 2025–2026 the Thai authorities have been running a nationwide campaign against nominee land-holding structures — a series of coordinated inspections in which the police and the relevant agencies analyse the corporate data of entire provinces and look for statistical anomalies: the same directors and “shareholders” recurring across formally unrelated companies, the actual foreign share exceeding the limit, Thai participants with no funds of their own.
The fifth phase of the operation, in July 2026, is telling: in one province more than 33,000 companies were analysed, around 4,700 with foreign shareholders were singled out, the circle was narrowed to 1,591 suspicious links — and raids were carried out on only 31 companies with clear signs of nominee ownership. Assets worth hundreds of millions of baht came under review and arrest warrants were issued. A detailed breakdown of that operation and its method is in our news piece on the nominee crackdown.
Two conclusions follow for a buyer. First: the risk of a nominee scheme is not hypothetical — the inspection machine works and is scaling up. Second: the campaign does not affect genuine structures — the authorities are deliberately separating companies with real activity from empty shells. A properly built structure with filings and taxes only gains from these checks: it can be verified through public registers.
7. Company vs leasehold
| Parameter | Thai company | Land leasehold |
|---|---|---|
| What’s registered | Land to company, villa to foreigner | Land lease 30+30 |
| Control over land | Via the company | Contractual (lease) |
| Complexity | High | Low–medium |
| Costs | Accounting, audit, filings | Minimal |
| Main risk | Nominee shareholders | Renewal terms |
How to choose between them in practice:
- Leasehold suits when the goal is a home for yourself or an investment without operational load: one contract, registration at ~1.1% at the Land Department, no annual filings. The weak point is the contractual nature of renewals: the quality of the contract text decides everything.
- A company is justified when control over the land across generations matters, there is a real rental model, or there are several properties that logically sit under one legal entity. The price is administration and the substance requirement.
- Hybrid elements — usufruct and superficies — strengthen both schemes: they are registered at the Land Department and protect the right of use and the right to the building regardless of what happens to the main title.
🔗 More on leasing: Freehold vs leasehold →
8. What maintaining a company costs
A company structure is not just a one-off registration expense but an ongoing budget:
- Registration and set-up — one-off costs for the lawyer, the articles and DBD registration.
- Accounting — monthly bookkeeping and filing of returns.
- Audit — a mandatory annual audit of the financial statements: in Thailand every company goes through it, small ones included.
- Corporate taxes — corporate income tax (a flat 20%), and on distributing dividends to an individual shareholder a further 10% withheld at source. So rental income through a company is taxed noticeably differently from an individual’s: the combined burden on distributed profit is around 28% versus the personal progressive scale with allowances. A detailed comparison is in our article on tax on rental income.
- Land and Building Tax — the annual tax on land and buildings; note that for a legal entity the use category may differ from the “residential” one an individual gets.
The exact annual budget depends on turnover and complexity, but the order of magnitude is this: administering a company runs to tens of thousands of baht a year at minimum, versus practically zero recurring costs for leasehold. That difference has to go into the yield calculation before the deal, not after.
9. Resale: shares or asset
A company structure has a fork at exit that other forms don’t:
- Share deal. The buyer receives the company’s shares — the land and villa stay on its balance sheet, and no re-registration at the Land Department is needed. Faster and cheaper on fees, but the buyer takes the company “as is” — with its history, obligations and the quality of its structure. That’s exactly why the buyer’s lawyer will dig deep: a clean company history is a direct asset for the seller here.
- Asset deal. The company sells the land and villa as an ordinary transaction through the Land Department with the standard taxes for a corporate seller. More expensive in payments, but the buyer gets a “clean” asset without someone else’s corporate history.
The practical conclusion: a carefully run company with transparent filings widens your options at exit — you can offer the buyer both routes. A neglected one narrows them to an asset deal with an extra discount. We covered the mechanics of exit in detail in how to resell property in Phuket, and the tax side in our breakdown of taxes on sale.
10. Inheriting the structure
What is inherited is the shares in the company (as movable property — through the Thai probate procedure) and the building, if it is registered to the foreigner. Here the structure adds a corporate layer: the articles must not block the transfer of shares to heirs, and there has to be a fallback management mechanism in case the sole director passes away — otherwise the company is left without a body able to sign documents. A Thai will covering the shares and well-drafted articles settle this in advance. The full breakdown is in our article on inheriting Thai property.
11. Pros and cons
Pros:
- Control over land and villa in one structure.
- Flexibility on resale (sell shares/asset).
- Fits a business logic (rental, management).
- Convenient for several properties under one legal entity.
Cons:
- More expensive and complex to administer (audit, filings).
- Requires real substance — otherwise a risk, all the more so amid the inspection campaign.
- Taxes on profit and dividends change the economics of rental compared with an individual.
- Needs a competent lawyer and accountant on an ongoing basis.
12. Pitfalls
- Nominee shareholders. Thais “for show” with no real contribution — illegal, with a risk of challenge and criminal consequences for the participants in the scheme.
- Empty company. With no activity or filings the structure is vulnerable — these are exactly what inspections look for.
- Skimping on a lawyer. Wrong articles/share class strips control.
- Ignoring costs. Annual accounting and audit are mandatory and belong in the yield estimate.
- Not thinking about exit. A share deal is only possible with a clean corporate history.
- Forgetting inheritance. The articles and the will must cover the shares — otherwise they get “stuck”.
- Copying someone’s scheme. The structure is built for the specific case.
13. Case: a nominee company
Consider a typical scenario. A buyer held a villa via a Thai company where the Thai shareholders were purely nominal — contributing no capital and taking no part, the company ran no business and filed nothing. Formally it “worked,” until at resale the buyer’s lawyer examined the structure: nominee ownership and no substance created a challenge risk and scared off the buyer. Note that the problem struck not at the moment of some inspection but at the most sensitive moment — on exiting the investment, when fixing anything is already too late and too expensive.
The contrasting scenario: a company with a real Thai partner, a working rental business, tidy filings and audits for every year. At sale the buyer was offered a choice between a share deal and an asset deal, legal due diligence took weeks rather than months, and the price needed no “structure discount”.
Takeaway: a Thai company is a working tool, but only with real economic substance and a correct structure. For many buyers leasehold is simpler and safer. The choice depends on the goal and willingness to run a company.
I’ll help compare leasehold and the company structure for your villa and bring in a lawyer for correct setup.
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Sources
Primary sources for this topic. Rates, fees and procedures change — at the time of your transaction check them directly rather than relying on this article.
- Department of Business Development (DBD) — the Thai company register
- Department of Lands, Thailand — title deeds, Chanote, registration of transfers and leaseholds
Informational only, not legal advice; build the ownership structure with a Thai lawyer.
