Lease or
Freehold ?
In the current context, Thai authorities have intensified their controls and enforcement actions against corporate structures deemed illegal or based on nominee arrangements.
In 2024-2025, dozens of cases were opened, with penalties ranging from fines to forced dissolution of the company, and even asset confiscation.
Foreign investors using shell companies or locals acting as front shareholders were ordered to bring their assets into compliance or divest themselves of them.
When a company is dissolved or declared illegal, the owners can lose all rights to the property—the land can be removed from the register, construction blocked, and investments threatened with confiscation.
This is why prioritizing legally registered leasehold agreements (long-term leases), avoiding opaque structures, and choosing transparent partners are not only advisable but essential for protecting your capital.
But more than anything, we invite you to consult our page dedicated to the profitability of your investment.
Massive intensification of controls since 2024
1. 🚫 Legal restrictions on freehold for foreigners
In Thailand, foreigners cannot own land outright (freehold), except in very specific cases (BOI zones, special projects, etc.).
Freehold ownership is therefore generally only available for condominiums (limited to 49% of a building's surface area).
For villas or plots of land, freehold ownership often involves complex arrangements (Thai companies with local shareholders, nominee agreements), which present significant legal risks and can be reclassified as illegal.
👉 Leasehold offers clear legal security recognized by the Thai Civil and Commercial Code.
2. 📜 A legal, regulated and renewable solution
A leasehold is a long-term lease (generally 30 years) registered with the Land Office, making it enforceable against third parties.
It can be renewed by contractual amendment (often up to 90 years: 30 + 30 + 30).
The lease may include provisions regarding inheritance, subletting, assignment, or resale rights, offering the investor considerable flexibility.
👉 It is a transparent framework recognized by the Thai authorities, without artifice or circumvention.
3. ⚖️ Fewer legal and tax risks
By avoiding freehold ownership through a Thai company, you protect yourself against:
The risk of reclassification by the courts (illegal nominee shareholders).
Tax audits related to artificially created structures.
Potential legal changes that could jeopardize land ownership by foreigners.
👉 Leasehold is a safe and durable use property that secures your capital.
4. 💰 Financial and tax optimization
The cost of leasehold is lower than that of freehold, which increases rental yield.
Leasehold eliminates the overhead costs associated with freehold.
Leasehold allows investment in premium projects (villas, resorts) without tying up as much capital as with freehold.
In certain arrangements, leasehold can be combined with a management company that optimizes taxation on rental income.
👉 Leasehold maximizes the security/return/liquidity ratio.
5. 🔒 A model adapted to the Koh Samui market
In Koh Samui (and many other tourist areas), the majority of high-end villa projects are offered as leaseholds, as this is the only viable legal model.
Buyers benefit from a clear legal framework, a standardized structure, and an active secondary market (it is common to resell a remaining lease to a new buyer).
Property appreciation is driven by rental demand and the scarcity of prime locations, rather than by full land ownership.
👉 The investor buys a secure experience and a profitable asset, not just a piece of land
✅ Conclusion
Choosing leasehold in Thailand means:
Complying with local law and avoiding risky arrangements.
Ensuring recognized and enforceable legal security.
Benefiting from high rental yields and capital appreciation
Participating in a proven model accepted by the local market.
The sensible approach in Thailand is to prioritize leasehold: a simple, legal, and secure solution for building your real estate future.
At Zanaya, we exclusively offer leasehold transactions.