Foreigners delay villa purchases at Thai resort destinations

Unsplash

Foreign buyers have become more cautious when purchasing luxury villas in popular resort areas of Thailand following stricter regulations. Authorities have intensified efforts to crack down on loopholes used to bypass land ownership restrictions. As a result, many prospective investors are delaying transactions or shifting toward condominium purchases, Bangkok Post reports.

Foreign-related property transactions in Thailand

Companies with foreign shareholders: key figures

Stronger oversight has been triggered by schemes that allow foreigners to effectively control land ownership in violation of Thai law. The Department of Business Development (DBD) identified 11,426 companies on Koh Phangan and Koh Samui with foreign shareholders. This accounts for nearly 68% of all registered businesses on the two islands. In addition, the agency flagged more than 7,000 companies suspected of using illegal nominee structures.

These arrangements are mainly found in real estate, tourism, and hospitality. They typically involve Thai nationals acting as formal shareholders. On paper, they appear as owners, but in many cases they cannot demonstrate the source of funds or tax history.

Who will be under scrutiny

Stricter oversight will apply to land transactions valued at 5 million baht ($153,000) or more, as well as cash transactions exceeding 2 million baht ($61,000). Authorities will examine the source of funds, income levels, and the financial standing of buyers to detect nominee ownership schemes.

Particular attention will be paid to Thai citizens married to foreigners, minor children of foreign nationals, as well as companies with foreign shareholders or directors. Buyers will be required to prove the origin of funds, while corporate structures must demonstrate transparent capital sources and consistency between land prices and registered capital.

Special inspection committees will be established in every province. They will monitor both new transactions and completed deals, including long-term land leases involving foreign legal entities.

How foreigners can acquire land in Thailand

Foreign nationals are not allowed to directly own land in Thailand, while foreign ownership in companies is capped at 49%. The law provides only limited exceptions, including inheritance and participation in specific investment promotion programs.

One of the few available options is purchasing land for residential construction, provided that at least 40 million baht ($1.2 million) is invested in designated business activities and approval is granted by authorities. The land plot must not exceed 1,600 square meters.

Using Thai nominees or corporate structures to conceal the true owner is considered illegal. Such violations carry penalties of up to two years in prison and fines of up to 20,000 baht ($612).

Foreign buyers shift from villas to condominiums

Market experts note that tighter controls are already affecting the luxury villa segment in tourist hubs such as Phuket and Koh Samui. While official data on properties acquired through nominee structures is unavailable, Juwai IQI estimates that around 60% of villa transactions in Phuket involve foreign buyers or tenants. In Koh Samui and Koh Phangan, the share of foreign buyers reaches 90%, equivalent to roughly 2,400–3,000 villas per island.

List Sotheby’s International Realty Thailand also confirms that international buyers account for the majority of activity in the high-end villa segment. Consultant Felix Desjardins noted growing hesitation among potential buyers, particularly those still in the decision-making phase. In some cases, demand is shifting toward condominiums, where ownership structures are generally clearer for foreign investors.

Thai law allows foreigners to purchase condominiums within a defined quota, making this segment more transparent and less risky.

Chinese nationals remained the largest group of foreign investors in Thailand’s residential property market in 2025. Available data covers condominiums only: Chinese buyers purchased 4,940 units worth a total of 18.5 billion baht ($558 million).

Risks for foreign buyers are increasing

Analysts at International Investment note that nominee ownership schemes are relatively common among foreign buyers. Tighter oversight may lead to a slowdown in villa purchases by foreigners and could result in the reassessment of previously completed deals if violations are detected.

Prospective buyers of land and villas in Thailand are advised to carefully review legal requirements and closely monitor regulatory changes. Scrutiny in the rental apartment market has also increased. Overall, regulation in Thailand’s property sector is tightening, even though recent policy signals had pointed toward liberalisation.

For investors, this environment increases transactional risk and the cost of market entry, as more time is required for due diligence on funding sources and ownership structures. At the same time, the importance of “clean” deals with transparent legal structures is rising, as they are likely to be considered more secure and more liquid in potential resale.