{"id":42250,"date":"2025-09-28T19:33:20","date_gmt":"2025-09-28T12:33:20","guid":{"rendered":"https:\/\/www.isanrealestate.com\/?p=42250"},"modified":"2025-09-30T11:23:16","modified_gmt":"2025-09-30T04:23:16","slug":"using-a-thai-registered-company-with-foreigners-as-shareholders-is-illegal-in-most-cases-foreigners-beware","status":"publish","type":"post","link":"https:\/\/www.isanrealestate.com\/th\/using-a-thai-registered-company-with-foreigners-as-shareholders-is-illegal-in-most-cases-foreigners-beware\/","title":{"rendered":"Using a Thai-registered company with foreigners as shareholders is illegal in most cases. Foreigners Beware!"},"content":{"rendered":"

Using a Thai-registered company with foreigners as shareholders is illegal in most cases. <\/b><\/span><\/p>\n

Foreigners Beware!<\/b><\/span><\/p>\n

\"\"<\/a><\/p>\n

Isan Real Estate, www.isanrealestate.com\/en\/,<\/a> a professional and award-winning real estate brokerage in Thailand’s Northeast region, and Lawyers for Expats Thailand, www.lawyersforexpatsthailand.com, frequently encounter inquiries from foreigners who have been advised that establishing a Thai company with foreign shareholder is permissible to \u2018purchase land\u2019 <\/b>in Thailand. It is crucial to emphasise that this practice is entirely illegal under Thai law.<\/p>\n

\"\"<\/a>Foreigners should be fully aware of the significant risks associated with such arrangements. While some agents or even local authorities may facilitate this process, it remains a violation of the law, and those who pursue this route could face severe legal and financial consequences in the future. This approach is highly discouraged, and individuals considering it should proceed with extreme caution and at their own risk.<\/p>\n

Reviewing the relevant legal frameworks, including the Land Code Act (1954) and the Foreign Business Act (1999), is strongly recommended for further clarification. The only exception to this rule is if the Thai company is a legitimate operational business, not merely a shell company created for land ownership. All Thai shareholders must show they actually paid real capital into the company to verify everything is legal.\u00a0 We urge you to avoid this scenario without proper legal advice. Always conduct thorough research and seek professional legal advice before making any decisions.<\/p>\n

The prohibition against foreigners using Thai companies to own land in Thailand is primarily governed by the\u00a0Land Code Act (1954)<\/b>\u00a0and the\u00a0Foreign Business Act (1999)<\/b>. While no specific “law gazette number” explicitly states this prohibition, the legal principles are well-established through these laws and related regulations. Below is an explanation of the relevant legal framework. Please research and conduct your due diligence and heed our advice to avoid severe consequences in the future.<\/p>\n

1. Land Code Act (1954)<\/b><\/p>\n

The\u00a0Land Code Act<\/b>\u00a0is the primary legislation governing land ownership in Thailand. Section 86 of the Act explicitly states that\u00a0foreigners cannot own land in Thailand<\/b>, with limited exceptions (e.g., investment under the Board of Investment (BOI) or treaties that grant reciprocal rights).<\/p>\n

Some foreigners have attempted to purchase land using Thai companies to circumvent this restriction. However, this practice is illegal if the company is deemed a “nominee” or “sham” company established solely to allow a foreigner to own land.<\/p>\n

2. Follow The Law:<\/b><\/p>\n

The\u00a0Foreign Business Act (FBA)<\/b>\u00a0regulates foreign involvement in Thai businesses. Under the FBA, certain business activities are prohibited for foreigners unless they obtain a foreign business license.<\/p>\n