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Legal rules to know when moving to Thailand
Moving to Thailand attracts retirees, entrepreneurs and families looking for stability and opportunities every year. But behind this appeal lies a strict legal framework. It is essential to be familiar with legislation such as the Immigration Act of 1979, the Civil and Commercial Code and the Foreign Labor Act of 2008.
Visas, employment, property, taxation and marriage: every aspect of the move must be handled with care. An administrative error can have serious consequences, including deportation. Understanding Thai legislation, which is regularly updated, and seeking the advice of a qualified lawyer are essential precautions.
This article outlines the essentials you need to know if you are planning on settling in Thailand.
Table of Contents
The relevant visas for moving to Thailand
The 1979 Immigration Act is the key legislation for foreigners in Thailand. It sets out the conditions for entry, stay and visa renewal. Each type of visa corresponds to a specific situation. A retirement visa (O or O-A), for instance, requires applicants to be at least 50 years old and to provide proof of sufficient financial resources, such as having at least 800,000 THB in a local bank account or a monthly income of at least 65,000 THB. Articles 34 and subsequent articles of this law set out the penalties for overstaying, which include daily fines and a ban on re-entering the country for up to 10 years.
If you are planning to move to Thailand, it is important to familiarize yourself with the various visa options available, ranging from the Non-B visa for workers and entrepreneurs, to the LTR (Long-Term Resident Visa) for international talent, as well as long-term investors, and the Digital Nomad Visa (DTV), which is currently being developed and is intended for digital professionals.
Therefore, living in Thailand requires careful consideration of the eligibility criteria and administrative compliance requirements. The LTR was introduced by the Board of Investment (BOI) and is based on a 2022 ministerial notification. It imposes an annual income threshold of USD 80,000 and requires applicants to have a validated professional history.
Moving to Thailand without a clear visa strategy is strongly discouraged. A mistake or poorly managed renewal could result in heavy penalties or even deportation. Although difficult to obtain, a residence permit offers a more stable long-term solution for expatriates who have lived in Thailand for several years.
Taxation applicable when moving to Thailand
Tax residence and income tax
From a tax perspective, moving to Thailand requires careful reading of the Revenue Code. Tax residence is established after 180 days spent in the calendar year. The tax framework is subject to rapid change, as evidenced by recent announcements of reforms aimed at taxing repatriated foreign income.
Section 41 of the Thai Revenue Code imposes tax on the worldwide income of tax residents. However, a recent reform has extended this rule to include repatriated foreign income, including that from previous financial years.
Personal income tax ranges from 5% to 35%. Property tax should also be considered if you own real estate. Moving to Thailand therefore requires a review of your personal tax situation and, if applicable, your international investments.
Setting up a business and corporate taxation
There are some essential rules you need to know about setting up a business and taxation if you are moving to Thailand.
Any company set up in Thailand by a foreign national must comply with the Foreign Business Act of 1999. This law restricts certain sectors to Thai nationals unless an exemption is granted through a BOI promotion or friendship treaty. Section 4 of the Act defines ‘foreign business’ and explicitly prohibits certain activities, such as legal services and property management.
Additionally, a key rule limits foreign ownership of shares in non-exempt companies to 49%. Above this threshold, special authorization is required; without it, the company is considered illegal.
Therefore, moving to Thailand to start a business requires meticulous legal preparation. It is essential to analyze the tax regime applicable to your activity, particularly with regard to VAT and corporation tax, to ensure the viability of your business structure.
Real estate ownership when moving to Thailand: myth or reality?
The Land Code (Section 86) prohibits direct land ownership. However, this does not mean that it is impossible to use or secure land when moving to Thailand.
Long-term leases as alternatives to direct land ownership
Although direct land ownership is prohibited when moving to Thailand, there is a common alternative which is a 30-year renewable land lease registered in the land registry, as provided for in the Civil and Commercial Code. Articles 537 and the following authorize leases of up to 30 years, renewable by amendment. It is essential to mention the maximum term in the contract and to register it with the Land Department for it to be valid.
Ownership of buildings
If the building permit (Building Permit Form Aor 1) is issued in the name of the foreign national who moved to Thailand, they become the full owner of the walls, regardless of the land status. This principle stems from the legal autonomy of the building recognized by Articles 139 and 147 of the Civil and Commercial Code. The owner of the land is not automatically the owner of the building when the permit and construction costs are paid by a third party. This solution is particularly relevant when the foreign national holds a long-term lease or a right of superficies; it allows them to sell, mortgage and transfer the walls separately, subject to compliance with the terms of the lease and the registration requirements of the Land Department.
Acquisition of a condominium
Under the Condominium Act of 1979, foreigners that moved to Thailand may own up to 49% of the total area of a building in freehold, provided that the funds are transferred from abroad. Section 19 of this Act requires proof of the transfer of funds via the Foreign Exchange Transaction Form (FETF).
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Labor law and social protection applicable when moving to Thailand
Work permits
According to the Alien Work Permit Act B.E. 2551 (2008), foreigners that moved to Thailand may not work in Thailand without a permit issued by the Ministry of Labor. Section 12 expressly prohibits unauthorized employment and is punishable by a fine of up to THB 100,000, as well as possible visa revocation. A Non-Immigrant B visa is usually granted on the condition that there are at least four Thai employees for every foreign employee, unless an exemption is granted to companies certified by the Board of Investment (BOI).
Social security compulsory scheme
All employees, including foreign nationals that moved to Thailand, are covered by the compulsory social security scheme established by the Social Security Act B.E. 2533 (1990). Employers must register their employees with the Social Security Office (SSO) within 30 days of hiring them. The scheme provides coverage for medical care, maternity care, disability benefits, daily allowances, retirement benefits and death benefits.
Social security contributions
Mandatory contributions amount to 5% of the employee’s gross monthly salary, up to a maximum of THB 750, and are matched by an equal contribution from the employer. This system provides solidarity-based coverage, financed equally by all participants.
Self-employed workers are not automatically enrolled. However, section 40 of the Social Security Act allows them to voluntarily join a partial scheme, with contributions ranging from THB 70 to THB 432, depending on the level of protection chosen (i.e. death, disability or retirement).
Legal aspects of family life for a move to Thailand
- For spouses
There are significant legal implications to moving to Thailand and marrying a Thai national. Although marriage entitles the spouse to an O visa, it does not change the rules on land ownership. According to Section 86 of the Land Code, foreigners are prohibited from owning land in Thailand, either directly or indirectly, even if they are married.
In the event of divorce, the rules set out in the Civil and Commercial Code (Articles 1471 to 1535) apply. Unless a marriage contract specifies otherwise, property acquired during the marriage is subject to the legal regime of limited community property.
- For children
Under Article 7 of the Nationality Act, children born to a Thai parent automatically have Thai nationality. They must be registered with both the local authorities and the consulate of the foreign parent’s country of origin. For recognition abroad, civil status documents must be authenticated by the Ministry of Foreign Affairs (MFA). These elements are to keep in mind if you plan on having to children after moving to Thailand.
Legal security in everyday life after moving to Thailand
Thailand’s legal system is based on civil law, which is influenced by continental law. As Thai is the official language, legal texts can be difficult to understand without interpretation. To avoid unnecessary disputes or litigation, it is advisable to consult a lawyer approved by the Thai Bar Association after moving to Thailand.
The Thai Penal Code provides for severe penalties in criminal law, including life imprisonment. In civil law, the Civil and Commercial Code stipulates that contracts exceeding THB 2,000 must be in writing (Article 9). Therefore, it is essential to exercise caution when entering into contracts on a daily basis.
Conclusion
Moving to Thailand can have long-lasting personal and professional consequences. While the country offers an attractive lifestyle and a dynamic economy, its legal environment is strict and must be carefully understood.
A preliminary legal audit is therefore highly recommended. This will help to ensure compliance with the Immigration Act of 1979, the Foreign Business Act of 1999, the Civil and Commercial Code, the Condominium Act of 1979, and the Thai Revenue Code. With the right legal support, not only will your project flourish, it will also be secure at every stage.
FAQ
Yes, but the process is demanding. To qualify, you must have held a non-immigrant visa for at least three consecutive years, prove that you have a minimum income and either pass a Thai language test or provide proof of proficiency in the language.
Yes, but you must comply with the Foreign Business Act. Certain activities are reserved for Thais. Sometimes it is necessary to obtain approval from the Board of Investment (BOI) or to rely on a bilateral treaty, such as the Treaty of Amity for Americans. It is essential to have a legal structure that complies with the Thai/foreign employee ratio and ensures that foreign ownership of shares is limited to 49% in non-exempt companies. The assistance of a local business lawyer is essential for securing this type of project.
Yes, provided it is properly drafted and registered. The most commonly used solution for securing occupation of a property is a 30-year lease, renewable once. To be enforceable against third parties, the contract must be registered with the Land Department. Therefore, a legal review of the lease is strongly recommended.
Yes, under certain conditions. A marriage contract concluded abroad must be legalized and translated into Thai, then registered with the local authorities. This can have legal implications in Thailand, particularly with regard to the separation of property. However, in the event of a dispute, Thai courts will primarily apply the provisions of the local Civil and Commercial Code. Therefore, it is advisable to draw up a contract that complies with Thai law and is written in Thai.
Thai law applies to property located in Thailand, even if the deceased was a foreigner. In the absence of a valid will, succession follows local rules (Article 1620 of the Civil and Commercial Code). It is therefore crucial to draw up a separate will in Thailand, in order to avoid ambiguity and ensure that your wishes are respected.