Thai legal terms
The words that come up in Thai property, company and licensing work, each defined from the Act or the Code that governs it.
This is a reference page rather than an article.
Each entry defines the term the way the Act or the Code that governs it defines it, and names the provision underneath so you can check it against the legislation instead of taking our word for it. Where something is how an office handles a matter rather than what a statute says, the entry says so and carries no section number. Our editorial standards set out the method in full.
None of it is advice about your situation. It is information about the law.
Nothing matches that.
Land and title 5
The documents that record rights in a plot, the office that registers them, and the value the state puts on the land.
Chanote (Nor Sor 4 Jor)Also known as Chanot, title deed
A chanote is a title deed, the one land document the Land Code defines as showing ownership of land. It records the holder's name and address, the location and area of the plot and a map specifying the boundaries in four directions, and it is signed and sealed by the provincial land officer. It is made in duplicate, one copy for the holder and one kept at the Land Office, so the office copy is the one to check. For a foreign owner it matters because this is the document that shows who owns the land, and so who is able to grant you a registered lease, a servitude or a mortgage.
Land Code B.E. 2497, Section 1, Section 56 and Section 57
Nor Sor 3 KorAlso known as Nor Sor 3 Gor, utilisation certificate, Certificate of Utilization
Nor Sor 3 Kor is a utilisation certificate. The Land Code defines that as a certificate from the competent official that the land has been put to use, which is not the same as a document of ownership, though it carries the same details as a title deed. Where such a certificate was issued with an aerial photo map of the land, the Minister may publish in the Government Gazette, at least thirty days in advance, the locality and commencement date for issuing title deeds there, and the new map is prepared by adjusting that existing aerial photo evidence rather than by a fresh cadastral survey. For a foreign owner it matters because the plot is not yet on an ownership title, so both the boundary and the position on upgrading are worth checking before you agree a price or a lease term.
Land Code B.E. 2497, Section 1, Section 57 and Section 58 ter
Land OfficeAlso known as Provincial Land Office, Branch Land Office, Department of Lands
The Land Office is where dealings in land are registered. Land officers there are the competent officials for registering rights and juristic acts in immovable property under the Civil and Commercial Code, and a transfer of ownership or of a possessory right in land held under a title deed or a utilisation certificate must be in writing and registered with them. They may question the parties and call for written evidence, and if there is reason to believe the registration is in evasion of the law, or that the buyer is purchasing on behalf of an alien, the matter must be referred to the Minister, whose word is final. For a foreign owner that makes the Land Office the point at which a transaction is examined and not merely recorded.
Land Code B.E. 2497, Section 4 bis, Section 71, Section 72 and Section 74
Appraised valueAlso known as appraised capital value, capital valuation
The appraised value is the official capital value placed on immovable property for the purpose of charging registration fees. A provincial sub-committee chaired by the governor proposes it for property in that province, the Valuation Committee approves it, and the approved figures are posted at the provincial land office, the branch land office and the district office. On an application to register a transfer of ownership or of a possessory right in land or immovable property, the registration fee is calculated on that appraised value and not on the price in your contract. The Act also provides for the case where ordinary market prices in a locality come to differ considerably from the appraised value, so you should not read it as a valuation of what the property is worth.
Land Code B.E. 2497, Section 104, Section 105 quinque, Section 105 sex and Section 105 octo
Servitude (right of way)Also known as easement, right of way
A servitude is a burden on one piece of immovable property for the benefit of another. The owner of the burdened property is bound to suffer certain acts affecting it, or to refrain from exercising certain rights inherent in his ownership, for the benefit of the other property; a right of way is the common example. Unless the act creating it provides otherwise, a servitude follows the benefited property when that property is disposed of, and it is extinguished by non-usage for ten years. For a foreign owner it matters because access, drainage and services often cross a neighbour's land, and a registered servitude is what keeps that access attached to the property instead of resting on the neighbour's goodwill.
Civil and Commercial Code, Section 1387, Section 1393 and Section 1399
Rights over land 5
Five ways of holding a right over land that somebody else owns. What each one gives you, and where each one stops.
Sap-Ing-SithAlso known as Sap Ing Sith, rights over leasehold asset
Sap-Ing-Sith is a right to use and take the benefit of immovable property. The owner applies to the competent official, the creation is registered on the title deed or the condominium ownership certificate, and a certificate is issued to the holder. It covers only land with a full title deed, land with buildings on land with a full title deed, and condominium units, and its term cannot exceed thirty years. It matters to you because, unlike an ordinary lease, a Sap-Ing-Sith can be transferred, mortgaged as security for a debt and inherited, and the holder has the rights, duties and liabilities of an owner of the property, except that the right to recover it from someone holding it without right and the right to stop unlawful interference stay with the owner.
Sap-Ing-Sith Act B.E. 2562 (Rights over Leasehold Asset), Sections 3, 4, 5, 10, 11 and 12
SuperficiesAlso known as sitthi nuea phuen din
Superficies is a right the owner of land creates in favour of another person, giving that person the right to own buildings, structures or plantations on or under the land. It can run for a fixed period or for the life of the landowner or of the superficiary, and a fixed period cannot exceed thirty years. Unless the deed creating it provides otherwise it is transferable and passes by inheritance, and it is not extinguished by destruction of the buildings, even destruction caused by force majeure. It matters to you because it separates the two: ownership of the building and ownership of the land can sit with different people, and like any real right over immovable property it is complete only once it is in writing and registered by the competent official.
Civil and Commercial Code, Sections 1299, 1403, 1410, 1411, 1412 and 1415
UsufructAlso known as sitthi kep kin
A usufruct subjects immovable property to a right under which the holder is entitled to possession, use and enjoyment of the property, together with the right of management of it. It can run for a fixed period or for the holder's life, and if no period is fixed it is presumed to be for life; a fixed period cannot exceed thirty years. Unless the deed creating it provides otherwise, the holder may transfer the exercise of the right to a third person. It matters to you because the right always comes to an end when the holder dies, so a usufruct passes nothing to your heirs.
Civil and Commercial Code, Sections 1403, 1417, 1418 and 1422
Registered leaseAlso known as hire of immovable property, registered lease of land
A hire of immovable property is a contract under which the letter gives the hirer the use or benefit of the property for a limited period and the hirer pays rent. A hire for more than three years, or for the life of the letter or the hirer, is enforceable for only three years unless it is made in writing and registered by the competent official. The duration cannot exceed thirty years, and a renewal cannot exceed thirty years from the time of renewal. Registration is the part that matters to you: without it a long lease falls back to three years, and where several people claim the same property under contracts that all must be registered, the hirer whose contract was registered first is preferred.
Civil and Commercial Code, Sections 537, 538, 540 and 543
SubleaseAlso known as sublet, chao chuang
A sublease is the hirer letting the property he has hired on to a third person. The hirer cannot sublet, or transfer his rights in the property in whole or in part, unless the contract of hire provides otherwise, and if he acts in breach of that the letter may terminate the contract. Where the property has been lawfully sublet, the sub-hirer is directly liable to the lessor, and rent the sub-hirer paid the hirer in advance cannot be set up against the letter. It matters to you because a sublease is only as good as the permission written into the head lease, and once it is lawful you answer directly to the head lessor.
Civil and Commercial Code, Sections 544 and 545
Company 7
The office that holds the register, the documents a Thai limited company is built from, and the two figures everybody quotes.
DBDAlso known as Department of Business Development, Krom Phatthana Thurakit Kan Kha
DBD is the Department of Business Development, part of the Ministry of Commerce. Under the Foreign Business Act its Director-General is the officer who grants List Three business licences, with the approval of the Foreign Business Commission, and the Act's own Registrar is a person the Minister appoints as the Foreign Business Registrar. That the DBD also holds the limited company register and publishes the registration forms is administrative organisation rather than something the statute spells out, so treat that part as practice. For a foreign owner it is the office on both sides of the same file: the record of who owns the company, and the permission to carry on a restricted business.
Foreign Business Act B.E. 2542, sections 4 and 8
Memorandum of associationAlso known as MOA, nangsue borikhon sonthi
The memorandum is the founding document that three or more promoters sign to form a limited company. It must state the name of the proposed company, which must always end with the word ‘limited’, the part of the Kingdom in which the registered office will be situated, the objects of the company, a declaration that the liability of the shareholders shall be limited, the amount of share capital with which the company proposes to be registered and its division into shares of a fixed amount, and the promoters' names, addresses, occupations and signatures with the number of shares subscribed by each. It must be made in two original copies at least, signed by the promoters and certified by two witnesses, with one copy deposited and registered. For a foreign owner the objects clause is the part to watch, because it is the public statement of the business the company is registered to carry on.
Civil and Commercial Code, sections 1097, 1098 and 1099
Articles of associationAlso known as AOA, regulations of the company, khobangkhap
These are the company's own internal rules, called the regulations of the company in the Civil and Commercial Code. They are optional: the statutory meeting adopts the regulations of the company ‘if any’. After registration of the company, no regulations may be made and no addition to or alteration of the regulations or of the contents of the memorandum may be adopted except by special resolution, and every new regulation, addition or alteration must be registered within fourteen days after the date of that resolution. For a foreign owner they matter because a restriction on transferring shares entered in a name certificate can only sit here, and changing them later needs a special resolution.
Civil and Commercial Code, sections 1108, 1129, 1145 and 1146
Registered capitalAlso known as share capital, thun chot thabian
Registered capital is the amount of share capital with which the company proposes to be registered, as stated in the memorandum and divided into shares of a fixed amount. The whole number of shares must be subscribed or allotted before the company is registered, and the amount of a share may not be less than five baht. It matters directly to a foreign owner because the Foreign Business Act defines the capital of a limited company as its registered capital, and leaves the minimum capital a foreigner must use to commence business in Thailand to a ministerial regulation while fixing a floor of not less than two million baht, and not less than three million baht where the business requires permission under the lists annexed to the Act.
Civil and Commercial Code, sections 1098, 1104 and 1117; Foreign Business Act B.E. 2542, sections 4 and 14
Paid-up capitalAlso known as thun chamra laeo
Paid-up capital is the part of the registered capital that shareholders have actually paid in. The first payment on the shares must not be less than twenty-five per cent of their nominal amount, and unless a general meeting decides otherwise the directors may make calls upon the shareholders for all money still due on their shares. For a foreign shareholder the unpaid part is the exposure: the liability of shareholders is limited to the amount, if any, unpaid on the shares they hold, so it is money that can still be called.
Civil and Commercial Code, sections 1096, 1105, 1110 and 1120
Foreign ownership 6
The Act that decides what your company may lawfully do, and the routes through it.
Foreign Business ActAlso known as FBA
The Act that decides which businesses a foreigner may operate in Thailand. It treats a company registered in Thailand as a foreigner where half or more of the shares forming its capital are held by people without Thai nationality or by companies not registered in Thailand, so ownership is measured by capital and not by who runs the business. Businesses sit in one of three annexed Lists: List One is closed to foreigners, List Two needs permission from the Minister with the approval of the Council of Ministers, and List Three needs permission from the Director-General with the approval of the Commission. Every question about what your Thai company may lawfully do starts with the List your activity falls in.
Foreign Business Act B.E. 2542, sections 4 and 8
Foreign Business LicenceAlso known as FBL
The permission a foreigner needs to operate a business in List Two or List Three of the Foreign Business Act. You apply to the Minister or the Director-General, and the decision must be completed within sixty days from the date of filing, by the Council of Ministers for List Two or by the Director-General for List Three. Minimum capital is set for each business by Ministerial Regulation and may not be less than three million baht where the business requires permission, so every licensed activity carries its own capital figure.
Foreign Business Act B.E. 2542, sections 17 and 14
Treaty of AmityAlso known as US-Thai Treaty of Amity, Treaty of Amity and Economic Relations
The Treaty of Amity and Economic Relations between the Kingdom of Thailand and the United States of America, signed at Bangkok on 29 May 1966. Article IV gives nationals and companies of each country national treatment for establishing and acquiring interests in enterprises, but each party reserves the right to limit foreign interests in communications, transport, fiduciary functions, banking involving depository functions, the exploitation of land or other natural resources, and domestic trade in indigenous agricultural products, and the practice of professions sits outside it. A foreigner operating a listed business by virtue of a treaty is exempt from sections 5, 8, 15, 17 and 18 of the Foreign Business Act and instead notifies the Director-General to obtain a certificate. For a United States owner that is the route to majority ownership without a licence, and it carries no right to own land: Article V extends national treatment to leasing immovable property and to acquiring movable property.
Treaty of Amity and Economic Relations USA-Thailand (1966), Articles IV and V; Foreign Business Act B.E. 2542, sections 10 and 11
BOI promotionAlso known as investment promotion, Board of Investment promotion
Promotion granted by the Board of Investment under the Investment Promotion Act. The Board announces which types and sizes of investment activity are eligible and may attach conditions to each, so the announced activity list decides whether your project qualifies. Under the Board's criteria for foreign shareholding there are no equity restrictions for foreign investors in projects in activities under List Two and List Three annexed to the Foreign Business Act, except as otherwise specified in other laws, while List One projects stay subject to a minimum Thai shareholding. Once promoted, you notify the Director-General for a certificate, and the Foreign Business Act then stops applying to that business apart from sections 21, 22, 39, 40 and 42 for as long as the promotion runs.
Investment Promotion Act B.E. 2520 (as amended through No.4 B.E. 2560), section 16; BOI Announcement No. 2/2557 – Policies and Criteria for Investment Promotion, clause 7; Foreign Business Act B.E. 2542, section 12
TISOAlso known as Trade and Investment Support Office, activity 7.7
Trade and Investment Support Office, activity 7.7 on the Board of Investment's list of promoted activities. It is a category created by Board announcement rather than by the Investment Promotion Act, and it covers support and wholesale work rather than selling to the public, such as monitoring and servicing associated enterprises, advisory services on business operations apart from buying and selling securities and foreign currency exchange, engineering and technical services, importing machinery and equipment for wholesaling with installation, maintenance and training, and international business process outsourcing. Annual selling and administrative expenses must be at least 10 million baht, and the business plan and scope of business must be approved by the Board. Because the scope is fixed by the plan the Board approves, work outside that scope is not covered by the promotion.
BOI Announcement No. 2/2557 – Policies and Criteria for Investment Promotion, activity 7.7
Tax and licensing 6
What is charged when a property changes hands, and the licence that decides how you may let it.
Transfer feeAlso known as registration fee, kha thamniam on
This is the fee the land office charges to register a transfer of ownership or of a possessory right in land or a building. The Land Code requires it to be collected as prescribed by ministerial regulation, but not above the rate in the schedule annexed to the Code, and it is calculated on the appraised capital value rather than on the price written into your contract. That matters in practice because the fee follows the state valuation, so agreeing a lower figure in the sale agreement does not reduce what you pay at the counter.
Land Code B.E. 2497, sections 103 and 104
Specific business taxAlso known as SBT, phasi thurakit chapho
This is a turnover tax that applies instead of value added tax to certain businesses, one of which is the sale of immovable property in a commercial or profitable manner, however the property was acquired, on the rules and conditions set by Royal Decree. The base is gross receipts before any deduction, and the rate is 3.0 per cent. It is paid at the moment the transfer is registered, the Land Department collects it for the Revenue Department, and the official may not complete the registration until it has been paid in full. Where it applies it falls on the whole price you receive, not on your gain.
Revenue Code, sections 91/2 (6), 91/5 (6), 91/6 (3) and 91/10
Stamp dutyAlso known as akon sataem
This is a duty on documents. The Revenue Code requires the instruments listed in the schedule annexed to its stamp duty chapter to be duly stamped at the rates set in that schedule. A government official may not sign, acknowledge, allow or record an instrument until the duty has been stamped in full and cancelled, and an instrument that is not duly stamped cannot be used as evidence in a civil case until the duty is paid. So the transfer paperwork you may need to rely on years later only holds up if the duty was settled at the time.
Revenue Code, sections 104, 118 and 119
Withholding tax on a property transferAlso known as phasi hak na thi chai
This is income tax deducted when the transfer is registered rather than later in a return. Where the seller is a company or juristic partnership the payer withholds 1 per cent and remits it to the official registering the rights and juristic act at the time of registration, and that amount is then a credit against the company's income tax for the accounting period in which it was withheld. Where the seller is an individual, the payer deducts a standard expense fixed by Royal Decree and computes the tax on the basis in section 48 (4). In either case the assessment official sets the sale price at the appraised capital value used for the Land Code registration fee on the day of transfer, whatever the ordinary market price, so the tax does not turn on the figure you and the buyer agree.
Revenue Code, sections 49 bis, 50 (5) and 69 ter
Hotel licenceAlso known as bai anuyat rong raem
This is the licence the Registrar issues for operating a hotel business. No person may operate a hotel business without one, and doing so carries imprisonment of up to one year or a fine of up to 20,000 baht or both, plus a further fine of up to 10,000 baht a day for as long as the breach continues. An applicant must be at least twenty years of age and have a domicile or residence in Thailand, and where the applicant is a partnership or juristic person the managing partner, manager or representative must meet the same conditions. That last requirement decides who inside your structure is able to hold the licence at all.
Hotel Act B.E. 2547, sections 15, 16 and 59
Non-hotel accommodationAlso known as accommodation which is not a hotel
This is accommodation that falls outside the Hotel Act definition of a hotel, and so outside the prohibition on operating a hotel business without a licence. The Act defines a hotel as accommodation established for business purposes to provide temporary accommodation for travellers or any other person in exchange for compensation, then excludes accommodation run by the state or for charitable or educational purposes without profit, accommodation providing service for a monthly service charge or upward only, and any other accommodation prescribed in a ministerial regulation. The detailed criteria for that third category sit in the ministerial regulation rather than in the Act itself. Note that letting by the night for payment is not covered by the monthly service charge exclusion.
Hotel Act B.E. 2547, section 4
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