The principle: a buyer inherits the structure
When a villa is sold with a company, what changes hands is usually the company, not the land. The buyer takes the shares and, with them, the company's entire history: its filings, its loan accounts, its previous shareholders, the way its original purchase was funded, and any private documents created along the way. The land does not move. The title does not change. Everything that made the arrangement fragile continues to exist, now owned by someone new.
That is why an assurance that the structure has been in place for fifteen years without difficulty is not comfort. It means fifteen years of history the buyer is acquiring untested. It is also why a change of ownership is a moment of exposure in itself: transferring shares and changing directors requires amendment filings, and since 1 April 2026 the Department of Business Development has applied source-of-funds verification to amendment filings as well as to incorporations.
Signals worth noticing early
Long before formal diligence begins, a buyer can usually tell whether a transaction deserves care. The signals are not proof of anything; they simply indicate where to look.
- The property is a house or a villa on land, and the seller is a foreigner, but the sale is described as a transfer of shares.
- The agent explains the structure in reassuring generalities and discourages independent legal review.
- The company is described as holding the property and nothing else, with no trading activity.
- The Thai shareholders are said to be nominal, silent, friendly, or connected to the agent or developer.
- A renewable lease is offered as ninety years, or as effectively freehold.
- A deposit is requested at the viewing, with a reservation form and a short deadline.
- The seller cannot readily produce the title deed, the company affidavit or the last set of audited accounts.
None of these means the transaction should not proceed. Taken together they mean the buyer should slow the process down and put the questions in writing before any money is committed.
What to require before exchange
A buyer's position is protected by documents and by their own lawyer, in that order. The essential requirement is Thai counsel instructed by the buyer, independently, and not recommended by the selling agent or the developer. That lawyer should see the title document and a current search against it, the company affidavit and shareholder list, the share certificates and transfer history, audited accounts and filing history, and evidence of how the original purchase was funded.
| What to obtain | What it tells the buyer |
|---|---|
| Current title search at the Land Department | Who owns the land and what leases, usufructs or mortgages are registered against it |
| Company affidavit and shareholder list | Who the shareholders and directors are today, and whether the register is current |
| Share transfer history | How the shareholding has moved, and whether transfers were properly recorded |
| Audited accounts and filing history | Whether the company has behaved like a company, and what loans sit on its balance sheet |
| Evidence of the original purchase funding | Whether the Thai shareholders contributed capital that was genuinely theirs |
| Loan agreements and shareholder balances | What is owed, to whom, and whether it will survive the sale |
| Any side agreements or undated instruments | Whether the registered position reflects the real one |
A seller who declines to provide these has answered the buyer's question. A buyer who accepts an incomplete answer because the property is desirable is making a decision, and should at least make it knowingly and with their lawyer's written view in hand. Buyers should also insist that any deposit is held on terms permitting its return if the legal review is unsatisfactory, and that the review period is written into the reservation document rather than promised verbally. Agents will often say that another buyer is waiting. That may well be true, and it is still not a reason to commit money before the title search and the company records have been read by a lawyer acting for the buyer.
Ask what the buyer will actually own
It is worth reducing the transaction to a single sentence and testing whether the answer is satisfactory. After completion, what exactly will the buyer hold, and where is it registered. If the answer is a registered condominium unit in the buyer's own name within the foreign quota, with foreign exchange transaction evidence for the remittance, that is a clean position. If it is a registered lease, the buyer should know the exact term registered, the identity of the landowner, and what any renewal promise is really worth.
If the answer is shares in a company that holds land, the buyer needs to understand that they will not own the land, that the company must be genuinely Thai in substance to hold it lawfully, and that the buyer's own position as a foreign shareholder is subject to the same law as the seller's. Where the honest answer is that the buyer will control the property through an arrangement that does not reflect the register, the correct conclusion is not to negotiate a discount. It is not to proceed.
Price is not the remedy
Buyers sometimes conclude that a structural problem can be handled by paying less. In some transactions a discount is appropriate for a genuine and quantifiable defect. A structure that may be unlawful is not that kind of defect, because the exposure it carries is not financial in nature and cannot be extinguished by price. Criminal liability under section 36 of the Foreign Business Act attaches to the parties, not to the balance sheet, and it attaches to the Thai participants as well as to the foreigner. Compulsory disposal of the land has been reported as a consequence in practice.
Warranties and indemnities from the seller are similarly limited. They are only as good as the seller's willingness and ability to pay years later, in a jurisdiction where the buyer would have to enforce them, and they do not undo the buyer's own position. They are worth having and they are not a substitute for the asset being sound.
The lawful alternatives are worth revisiting
A buyer who reaches this point often finds that their actual requirement can be met lawfully in a different form. A condominium in freehold within the 49 percent quota, purchased with funds remitted from abroad and evidenced by the bank, gives registered ownership in the buyer's own name. A properly registered lease over a house, priced as the thirty years it actually is, gives long occupation on a lawful footing. Where a genuine business is involved, Board of Investment promotion may carry land rights for the promoted activity.
Reframing the search around what the family genuinely needs, rather than around replicating freehold, often produces a better outcome than the original transaction would have. It is a conversation worth having with counsel before the search resumes rather than after another deposit is paid.
When to walk away
There are three answers that should end a transaction. The first is a refusal to allow independent legal review on a sensible timetable. The second is an inability or unwillingness to produce the core documents, particularly the title search, the company records and evidence of how the purchase was originally funded. The third is a lawyer's written advice that the structure is or may be unlawful, which no discount, warranty or reassurance should override.
Buyers who have already exchanged, or already completed, on a structure they now doubt should instruct qualified Thai counsel immediately and give them the complete picture, including anything they were told during the sale. Asia Global Partners is a private office and not a law firm, and gives no legal advice. The office coordinates independently instructed Thai counsel and valuers for buyers, keeps the diligence timetable honest against a seller's pressure, and remains the client's single accountable relationship through the transaction.
This article is general information for buyers and is not legal advice; every transaction turns on its own facts. Asia Global Partners is a private office and not a law firm. Instruct independent qualified Thai counsel before committing to any purchase, and verify title and registered rights with the Land Department and company records with the Department of Business Development.
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This briefing is general information, not legal, tax or investment advice. Thai rules change frequently and individual cases differ. Verify current requirements with the relevant authorities, including the Immigration Bureau, the Board of Investment, the Land Department, the Department of Business Development and the Revenue Department, and take advice on your own facts before acting.
Where you stand is a question worth answering.
A briefing can describe the landscape; it cannot tell you about your own title, your own shareholder register or your own filings. A confidential review does, formed by independently instructed Thai counsel and coordinated by this office. Owners who look while nothing is happening keep the widest set of lawful options.