Circular 19097: Thailand Moves to Shut Down Nominee Land Ownership in 2026

On 25 August 2026, Thailand's Ministry of Interior sent provincial governors an urgent directive, Circular No. MorTor 0515.2/Wor 19097. It is only a few pages long and carries no dramatic headline, yet it changes the rules for tens of thousands of foreigners whose villas in Phuket, Samui and Pattaya are held through Thai companies.

The short version: the classic structure of a Thai company with 51% held by local shareholders is no longer passively tolerated. Land offices are now required to look for signs of nominee ownership on their own initiative, without a complaint or any trigger, and to refer cases to investigation committees.

Key Facts

• Circular No. MorTor 0515.2/Wor 19097, dated 25 August 2026, is addressed to provincial governors and widens investigations into land effectively controlled by foreigners through Thai nominees.
• Specialized agencies, including local police, join the investigation committees, with access to shareholder data, tax filings, and immigration and financial records. Previously a land office saw only the paperwork submitted when a transaction was registered.
• Proactive screening is now mandatory: land offices must review companies and partnerships for risk indicators and refer cases to a committee, which decides whether the structure counts as a foreign person.
• Two enforcement tracks: an order to dispose of the land, or mandatory criminal prosecution where intent to circumvent the law is proven.
• The legal basis is older than the circular. Thailand's Land Code dates from 1954, and a company with foreign participation above 49% is treated as a foreigner and cannot own land. Section 94 allows a forced-sale period set by the authorities, usually 180 days to one year.
• Penalties under the Foreign Business Act for nominee ownership: up to 3 years in prison, fines of 100,000 to 1,000,000 THB, plus a daily fine of 10,000-50,000 THB until the violation is corrected. Both the Thai nominee and the foreigner are liable.
• The 2026 circular builds on a 2023 circular that required checking the source of funds of Thai shareholders when a company with a foreign director buys land.
• The crackdown is wider than one document. Press reports describe a review of 36,277 foreign-linked landholding companies, and a May 2026 Department of Lands campaign (Urgent Circular No. 0515.2/W 10722, 15 May 2026) set a unified screening standard across all 77 provinces, with Phuket, Surat Thani, Chiang Mai, Krabi and Chonburi among the priority areas.

Story and Context

The ban on foreigners owning land in Thailand is older than most people reading this. It entered the Land Code in 1954 and has survived roughly fifteen governments, two constitutions and three construction booms. The code does contain a legal route: Section 96 bis lets a foreigner buy up to one rai of land for residential use, provided they invest at least 40 million THB in the Thai economy for a minimum of five years and obtain approval from the Minister of Interior. By market estimates, only a handful of such permits have ever been issued. The procedure exists on paper and barely works in practice.

So the market took another road. By the mid-2000s an industry had formed in Phuket and Samui. A law firm registers a Thai company, three Thai shareholders with passports and no capital receive 51%, and the foreigner holds 49% and the post of sole director with signing power. Control was secured through preference shares with different voting weight, signed blank share-transfer forms from the nominees, and a loan from the foreigner to the company for the purchase amount. A villa might cost 25 million THB while the company's registered capital was 2 million, and nobody blinked.

The first blow came in 2006, when the Ministry of Interior told land offices to verify the source of funds of Thai shareholders. Some deals stalled, but the market waited out a political crisis and returned to old habits. The 2023 circular formalized the source-of-funds check. The August 2026 document adds what earlier efforts lacked: investigators' access to tax, banking and immigration databases, and a duty to hunt for violations rather than wait for them.

That is the real shift. Risk used to be event-driven. It surfaced during a divorce, an inheritance, a dispute with the Thai partner, or a neighbor's tip-off. Now it is routine. A company with a foreign director, zero revenue, land on its balance sheet and Thai shareholders with no declared income is a set of indicators that any automated screening flags.

It is also worth separating myth from fact. The popular 30+30+30 lease is not 90 years of ownership. Under the Civil and Commercial Code, only the first 30 years can be registered at the Land Department. Renewal options are a contractual right against a specific lessor. They do not automatically follow the land when it is sold, and they do not always pass to the lessor's heirs. Thai courts have repeatedly voided arrangements where a prepaid long-term lease effectively disguised a sale. That does not mean leases should be avoided, but selling one as 'practically 90 years of ownership' is misleading, and a buyer should calculate the economics on 30 years.

In 2024 the cabinet asked for work on extending the maximum lease term to 99 years and raising the foreign quota in condominiums from 49% to 75%. After public criticism, the initiative did not reach parliament in that form. It would be unwise to plan a purchase around its revival.

The practical view: for a private buyer of a home, a Thai company in 2026 is a poor idea at any budget. Running the structure costs 30,000 to 60,000 THB a year for accounting and mandatory audit alone, adds annual reporting, and produces an asset that the next buyer will discount for legal risk. A condominium unit within the 49% foreign quota of total saleable building area gives true freehold in the foreigner's own name, the only form of real ownership open to a non-resident without caveats. For land under a villa, the realistic option is a registered 30-year lease with a sober financial model.

There is one exception. If you run a genuine business in Thailand with real revenue and Thai partners who have invested their own money, and the land is needed for production, a hotel or a restaurant, your company is not a nominee structure and screening will not stop it. The problem is not Thai companies as such but empty shells built to hold a single villa.

FAQ

What exactly did the 25 August 2026 circular change?

It widened the make-up of investigation committees to include specialized agencies such as the police, gave them access to shareholder, tax, immigration and financial data, and obliged land offices to identify companies showing signs of nominee ownership on their own.

Can a villa bought through a company ten years ago be taken away?

There is no confiscation as such. If a company is ruled a foreign person, the governor can order the land sold within a set period. Under Section 94 of the Land Code this is usually 180 days to one year. The proceeds stay with the owner, but selling against a deadline rarely achieves a full market price, and discounts can be significant.

What penalties do Thai nominee shareholders face?

The same as the foreigner: up to 3 years in prison, a fine of 100,000 to 1,000,000 THB, and a daily fine of 10,000-50,000 THB until the breach is corrected. This is why finding a Thai shareholder on the old terms is becoming harder and more expensive.

Can a foreigner own an apartment in Thailand directly?

Yes. A unit in a registered condominium can be held in full ownership by a foreigner, provided foreign ownership does not exceed 49% of the building's total saleable area and the funds are brought in from abroad in foreign currency, with a Foreign Exchange Transaction (FET) form issued by a Thai bank.

How secure is a 30-year land lease?

The registered 30 years are protected and survive a change of land owner. Renewal options are a contractual obligation of a specific lessor and may not be honored. Plan to recover your investment within the first term and treat any extension as a bonus.

What should owners with a villa already held through a company do?

Start with an audit: who the Thai shareholders are, whether their income is documented, whether the company files accounts and undergoes audit, and whether paperwork exists for the director's loan. Remedies include converting to a registered lease from the company to the individual, restructuring through a Thai-citizen spouse with a declaration of no claim on the funds, or selling. Each option has tax consequences that should be calculated before acting, not after.

Is personal presence at the land office required?

Yes. Registering a transaction or changing rights requires either appearing in person or a notarized power of attorney legalized for use in Thailand. Land offices in Phuket can be booked weeks ahead in high season, so plan the trip early.

Will the foreign quota be raised to 75%?

The idea was discussed in 2024 together with 99-year leases and was shelved after public criticism. Basing an investment decision on its return would be premature.

If your land is currently held through a Thai company, the most useful step in the coming month is to request the full set of financial statements for the past three years from the company's accountant and check whether the Thai shareholders' income was documented when they contributed their share capital. That is the first thing an investigation committee examines.

Source: The CITY Asia

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