A legal marriage is effected by registration at a local district office (Amphur). In the event one or more of the parties is a foreign national, the following is likely to be required by the local office for registration:

• A notarised affidavit confirming the foreign national’s eligibility to marry by the relevant consulate or embassy
  
• Passport copy certified by the relevant consulate or embassy
  
  In the event of any previous marriage(s), supporting documents proving that any and all prior marriages were ended by divorce, death or annulment
  
• Written permission from parents to marry if either party is under the age of 20 years
  
• Certified translations of all documents into Thai from a professional translation

The Thai Land Code provides generally that foreign individuals or foreign companies are prohibited from owning land in the Kingdom. The rule results in obvious practical difficulties in common scenarios where foreign buyers wish to purchase real property (or real estate) in Thailand.

There are certain exceptions, most notably those concerning Thai companies and concessions granted to foreigners by the Board of Investment and the Industrial Estate Authority of Thailand.

In our experience, more usually relevant to our clients are the provisions allowing foreign buyers to lease land and buildings, own buildings that are constructed on leased land and own condominium units, subject to some restrictions which will be more fully explored below.

A Thai registered company may own land in Thailand. However, it must be considered a Thai company and majority Thai owned. In practical terms, this means that no more than 49% of the total issued shares of the company are owned by a foreign entity (a natural person or a company). The majority of shareholders must also be Thai nationals, or majority Thai owned companies.

Land Office officials are afforded broad discretion in determining whether a company registered in Thailand is a Thai company for the purposes of owning land. In our practical experience, this often translates into a refusal by officials to transfer the title of land to a Thai registered company with any foreign shareholding without conducting an investigation into the background of the transaction to ensure it is not an attempt to circumvent the rules.

The law relating to the lease of (non-commercial) property is generally governed by the Civil and Commercial Code which broadly provides the following:

• A contract for the lease of immovable property (land, houses, condominium units or other buildings) for 3 years or less is not enforceable unless made in writing and signed by the relevant parties. Leases for more than 3 years must be registered at the relevant land office or they will be unenforceable for any period beyond 3 years.
• A lease of immovable property may be made to a foreign entity for a period of up to 30 years. Provision for an additional 30-year extension may be included in the lease, but see the further discussion of the enforceability of such provisions below.
• A lease is automatically terminated at the end of the agreed lease period and no notice period is required. However, in the event a lessee retains possession of the property following the end of the lease term and there is no objection from the lessor, a lease will be deemed extended for an indefinite period and subject to termination by either party following a notice period of at least one rental period of not more than two months.

Not in the absence of a good reason. A lease can be terminated before the expiry of the term by a lessor on the basis of non-payment of rent or some other serious breach of the terms of the lease agreement by the lessee.

In the event of early termination by a lessee, and in the absence of any serious breach by the lessor, the lessee is generally responsible for any actual loss suffered by the lessor until a replacement for the lessee can be found or a reasonable period of time has elapsed.

As discussed, the Civil and Commercial Code allows for the lease of immovable property for a maximum term of 30 years. However, provisions to extend a lease for a further 30 years are commonly seen in leases. The question of whether or not such provisions are enforceable is a common one.

In our view, even if such provisions are ultimately enforceable, they should be treated as if they are unenforceable. The reasoning is that any such agreement will likely be treated by a court as a private agreement between the original parties and separate from the lease. Given a period of 30 years, it is not difficult to imagine a scenario where the original lessor sells or otherwise transfers the property and how issues of enforceability against a new owner might therefore arise.

Foreign ownership of condominiums in Thailand is permitted under provisions of the Condominium Act B.E. 2522 (1979), in the event certain conditions are met. The rules permit all foreign entities, both natural persons and companies, to own condominium units.

The conditions to be met are as follows:

• Foreign ownership in the relevant condominium project does not exceed, in the aggregate, 49% of the total saleable area of all condominium units in the building. Evidence of this must be obtained from the condominium juristic person and presented to the relevant land office before any transfer of title can take place.
• Where the purchaser is a foreign natural person (as opposed to a foreign company), that person is either a permitted resident of Thailand under provisions of the Immigration Act, or is permitted to reside in Thailand under provisions of the Investment Promotion Act.
• Alternatively, in the event the residency conditions are not satisfied, or the purchaser is a foreign company (not registered in Thailand), evidence must be produced that the funds for the purchase of the condominium unit were transferred into Thailand in foreign currency or that the funds were withdrawn from a non-resident’s bank account or from a foreign currency account. In any event, evidence of transfer or withdrawal in an amount not less than the full purchase price of the condominium unit must be presented to the relevant land office before any transfer of title can take place.

Although this is only a brief overview of some of the most common questions raised when foreign individuals or companies attempt to acquire property in Thailand, it should be clear that, particularly given the onerous restrictions on foreign ownership, this can be a difficult and complex space to navigate for prospective foreign buyers.

Our property specialists, and, in particular, the co-founder of our firm, Sirichot Chaiyachot, have many years of practical experience in dealing with such issues and the necessary expertise to guide a transaction to a successful conclusion from beginning to end. For further information or assistance, please contact the LAFS property practice at info@lafs-legal.com. 

The Civil and Commercial Code provides that in circumstances where no will is provided (or a will is provided but held invalid), an estate is distributed among what are called ‘statutory heirs.’ There are six classes of statutory heir and each class is entitled to inherit in the following order of preference:

• Descendants
  
• Parents
  
• Brothers and sisters of full blood
  
• Brothers and sisters of half blood
  
• Grandparents
  
• Uncles and Aunts

No heir in any lower class is entitled to inherit in the event an heir of any higher class survives. However, a spouse is treated as a special class entitled to inherit in a proportion that varies between an equal and a full share of any estate dependent upon the existence of the remaining surviving classes in any particular circumstance.

In circumstances where the deceased left a valid will, an estate will generally devolve on the named beneficiary or beneficiaries. The most straightforward form of will is a simple will where two witnesses are required to be present when the will is executed. This is the type of will we generally recommend to our clients to ensure their wishes are carried out.

In order to be valid, a will primarily must be made by a testator who is:

• A natural person (as opposed to a juristic person)
  
• Not acting under the effects of mistake, duress or fraud
  
• 15 years or older
  
• Not incompetent or of unsound mind

Irrespective of whether or not a deceased left a valid will or died without leaving a will, an estate administrator will need to be appointed by the Thai court in order to practically distribute an estate of any significant value.

A petition is filed with the provincial court having jurisdiction over the area the deceased was domiciled at the time of death. The petition must be filed by an heir, an ‘interested party’ (e.g., a nominated administrator or a creditor), or by a public prosecutor.

Following the filing of a petition, the court will set a date for the hearing of evidence by the petitioner and, if satisfied, will render an order allowing the petitioner to administer the estate either in accordance with the deceased’s wishes or, in the absence of a valid will, in accordance with the statutory rules above. The process generally takes approximately 90 - 120 days from the date of filing the petition but can take significantly longer if contested.

As in many other jurisdictions, the manner in which an estate is ultimately distributed in the absence of a valid will may be undesirable or even contrary to the wishes of a potential testator. In the event our clients own property in Thailand, our advice is always to ensure the proper draft and execution of a will that accords with Thai law specifically in relation to that property.

This is not only to ensure the estate is distributed in accordance with the client’s wishes, but to avoid any issues with validity or enforceability in the Thai court which plays a significant role in the distribution of any valuable estate. Any property held outside Thailand should generally be dealt with in a separate will that complies with the rules of the jurisdiction in which it is located.

Other important considerations that should be taken into account include:

• The provision of trusts, which are not enforceable as a matter of Thai law and are a common source of issues when attempting to enforce provisions of wills drafted in accordance with the rules of a foreign jurisdiction.
• The identity of an executor or administrator whose role should be made explicit in any Thai will. The expectations and obligations of the role should be made clear to any executor in advance, particularly if they do not reside in Thailand, since they will need to physically attend the Thai court. The naming of a substitute executor is also good practice.
• While a Thai will does not need to be written in Thai to be valid, it will need to be professionally translated and officially certified before it is submitted to a court along with any petition to appoint an administrator. With this in mind, we draft and execute Thai wills for our clients simultaneously in Thai and English.

The Inheritance Tax Act B.E. 2558 (2015) provides that the following persons are subject to inheritance tax:

• Thai natural persons
  
• Non-Thai natural persons domiciled in Thailand
  
• Non-Thai natural persons inheriting an asset(s) located in Thailand
  
• Juristic persons (companies) registered in Thailand which are majority Thai owned or managed
  

There are important exemptions from the Act, the most significant being the following:

• Inheritance that does not exceed 100 million Thai Baht in value
  
• Being a legal spouse of the deceased
  
• Being a recipient of an inheritance where the deceased passed away before the enforcement of the Inheritance Tax Act (1st February 2016)

In the event the value of an inheritance exceeds the threshold of 100 million Thai Baht, only that part which exceeds the threshold will be subject to inheritance tax. The rates are as follows:

• 5% for parents and descendants
  
• 10% for all other beneficiaries

The following assets are subject to inheritance tax:

• Immovable property
  
• Securities as defined by the law on securities and exchange
  
• Deposits or any other monies with the same characteristics capable of being withdrawn or claimed from a financial institution or person who has received such monies
  
• Registered vehicles
  
• Financial assets prescribed by Royal Decrees

It should be noted that even in the event an estate is not subject to inheritance tax, there may be other tax issues that need to be addressed, particularly with regard to the sale of assets and the transfer of funds out of Thailand.

Succession and estate planning in Thailand is a potentially difficult and complex space, especially when there are multiple legal jurisdictions and foreign persons or other legal entities involved.

Our lawyers have years of practical experience in dealing with precisely these kinds of issues and providing clients with expert advice and guidance. Please contact the LAFS property practice at info@lafs-legal.com  if you need assistance with any of the following:

• Estate planning or the draft and execution of wills in accordance with Thai law
  
• Assistance with the estate of a relative who has passed away in Thailand
  
• Applying to the Thai court for the appointment of an administrator or executor (a process sometimes referred to as a grant of letters or probate in foreign jurisdictions)
  
• The conduct of those applications, including the preparation of an applicant to give evidence at any hearing
  
• Contested wills or challenges to the administration or distribution of an estate
  
• Assistance in dealing with banks, the land office or other institutions during the distribution of an estate
  
• The preparation of estate accounts and the practicalities of the distribution of an estate to beneficiaries

Advice on inheritance tax issues or any other tax issues related to the distribution of an estate and the transfer of proceeds outside Thailand