There are various restrictions for foreigners to buy land in thailand. The same goes valid if he/she wants to buy industrial land in Thailand. But there are few exceptions and legal processes that can take them out of this complicacy. This article intends to educate you on the various regulations, processes and terms that are necessary for a foreigner to buy industrial land in Thailand.
Permission for Foreigners to Buy Industrial Land in Thailand
The Industrial Estate Authority of Thailand Act of B.E. 2522 (1979), after its amendment, makes an important exception for land in an industrial estate, even though the Thai Land Code generally forbids foreigners from owning land. According to Section 44 of the Act, foreign business owners can own industrial estate land for their operations. Furthermore, this is applicable even in excess of the land area restrictions of the Land Code. In this case, the decision of the Industrial Estate Authority of Thailand (IEAT) will be applicable.
Guideline for Foreigners to Buy Industrial Land in Thailand
There was an “IEAT Announcement” of the IEAT Board of Directors on June 30, 2008. Later on, there were amendments in the announcement on November 22, 2010. This outlines the general rules that apply. However, obtaining a license from the IEAT to use the land for business purposes is a necessary requirement for a foreign investor to fulfill. A foreign investor can do so by using Form IEAT 01/1. The form requires the following information:
- The specific land plot details that the applicant intends to purchase along with the details of the seller;
- Basic information regarding the applicant’s company, such as registered capital and ratio of Thai-to-foreign ownership. The applicant may apply even if it is still in the process of incorporating;
- The precise dates as to when the factory will begin construction and when it will begin operations;
- Estimate of public utility usage during the initial stages of operations and during full-time operations, such as electricity, telephone, water supply, raw water, wastewater treatment, garbage disposal, industrial waste disposal, and any other public utility usages;
- Necessary raw materials in the manufacturing process, an outline of the manufacturing process, and the production capacity of the factory, including the details of distribution of the product in Thailand and abroad.
Processing Steps to Buy Industrial Land in Thailand
An IEAT One-Stop-Service Center handles the processing of the land use license application. The applicant must submit Form IEAT 15 S, a copy of land use license, the title deed, and other pertinent paperwork in order to acquire ownership of the property. Additionally, the applicant must provide basic business information on Form IEAT 15 S. Furthermore, the applicant must provide the data regarding land area allocation like the following:
- On approval, the IEAT will issue a notification to the applicant and send an ownership permission document to the Land Department.
- The applicant must submit the following documents to the Land Department:
- Company Registration
- List of Shareholders
- Commercial Registration
- Memorandum of Association and Objectives
- Corporate by-laws
- Report of Corporate Meeting authorizing purchase of land
- Ownership permission document from the IEAT.
- The Land Department will then update the Title Deed to add the name of the new owner.
Furthermore, Section 4 of the IEAT Announcement subjects the landowner to the condition that the land area must be allocated as follows:
- Allocation of a land area for the factory or commercial building that is appropriate for the type of the business under planning.
- There must be a land area allocated for safety and environmental protection systems in consideration of the effects of the business operations; for example, a waste-water treatment system or an accident prevention system.
- According to the landscape architecture of the land, there must be a land area left vacant.
- There must be a land area allocated to any buildings or open-air areas that are necessary for the conduct of business operations, such as an area to store merchandise, a parking lot, a cafeteria, or a security booth.
- There must be a land area left vacant in anticipation of future business expansion.
The Bottomline
An industrial estate typically prohibits the ownership of land for residential use. The IEAT Announcement makes it clear that, under certain circumstances as in Section 5 of the IEAT Announcement, the company can own land within an industrial estate to provide housing for the company’s employees and their families. The applicant must submit a different application form, IEAT 15.1 S, to own land in an industrial estate for these uses.
The Industrial Estate Act’s Section 44 further stipulates that a foreign investor must sell the property within three years of the cessation or transfer of business operations. If the foreign investor fails to comply, the Director-General of the Land Department will sell the land in accordance with the Land Code.
The process of purchase of Industrial Land can be hefty for a foreigner in Thailand. Apart from the process stated in the article, a foreign investor must undergo the following stages:
To clear all of these stages, you must take proper legal assistance from reliable law agencies. You can talk with one of them now! However, you may take your time and email us your requirements at [email protected]. We will be more than glad to help you throughout the process of buying industrial land in Thailand.
