This information is for reference only and is not legal advice. Consult a licensed lawyer before any transaction.
Hire of Immovable Property for Commerce and Industry Act
Hire of Immovable Property for Commerce and Industry Act B.E. 2542 (1999)
The information is reviewed and updated monthly against official sources.
In short
A 1999 statute permitting registered leases of land and buildings for commercial or industrial use for longer than 30 and up to 50 years, renewable, that are transferable, inheritable and mortgageable, subject to area limits and an investment threshold for foreign hirers.
Section 3: Definitions and scope of a commercial/industrial hire
The law covers only leases of land or buildings used for commerce or industry whose term is longer than 30 years and does not pass 50 years. Shorter leases stay under the ordinary Civil and Commercial Code. The Director-General of the Department of Lands is the registering authority for this special regime.
Section 3 (duration): Maximum lease term of fifty years
Unlike the standard 30-year cap on ordinary leases, this regime allows a single registered term above 30 years, up to a ceiling of 50 years. This gives long-horizon commercial and industrial projects far greater security of tenure than a normal lease, while keeping the property in the owner's name.
Section 4: Written form, registration and renewal
The hire is valid only if made in writing and registered with the competent land official. The parties may agree to renew, but the renewal cannot extend the lease beyond 50 years counted from the date that renewal agreement is concluded. Without registration the long term simply does not take effect.
Section 5 (ownership retained): Owner keeps title; the hirer holds only a lease right
Registration does not transfer ownership: the lessor remains the legal owner of the land or building throughout the term. The hirer obtains a registered, protected right to use the property for the agreed commercial or industrial purpose, not a freehold interest in it.
Section 5 (area over 100 rai): Director-General approval for plots over 100 rai
Where the leased land exceeds 100 rai (about 16 hectares), prior approval of the Director-General is required and the use must follow the type of commerce or industry fixed by ministerial regulation. Registrations that breach these conditions on purpose or use may be cancelled by the Director-General.
Section 5 (foreign-investor conditions): Investment threshold and inward foreign currency for alien hirers
Where a foreigner is the hirer, sub-hirer or transferee, the underlying commercial or industrial investment must be at least 100 million baht, excluding the rent itself. That capital has to enter Thailand as foreign currency, drawn from a foreign-currency account or a non-resident baht account, in line with the prescribed conditions.
Section 6: Lease right may be mortgaged
The registered hire right can itself serve as security: it may be used as the object of a mortgage, with the ordinary mortgage rules of the Civil and Commercial Code applying. This lets a long-term commercial tenant raise financing against the value of the lease rather than against the land's freehold.
Section 7: Inheritance and transfer of the lease
A right of hire under this act passes to the hirer's heirs and does not lapse on the hirer's death, unlike an ordinary personal lease. The hirer may also sub-let or assign the right in whole or in part, except where the contract itself expressly forbids such transfer.
Section 8: Registration required for changes, subleases and transfers
Any amendment of the hire, a sublease, the creation of a mortgage over the right, or a transfer must be made in writing and registered to be enforceable against third parties. Without that registration such dealings have effect only between the immediate parties and not against outsiders.
Section 9: Civil and Commercial Code applies by default
On matters this act does not specifically address, the general hire-of-property provisions of the Civil and Commercial Code apply. The special statute is therefore an overlay: it extends term and security features but leaves routine landlord-and-tenant questions to the ordinary code.
Section 10: Land Code procedures govern registration
Registration, official acts and related procedures under this act follow the rules of the Land Code, carried out by Department of Lands officials. Standard land-office practice, fees and documentary checks therefore apply when a commercial or industrial hire is registered or later amended.
Section 11: Ministerial regulations and fees
The Minister of Interior is empowered to issue ministerial regulations setting fees, permitted business categories, area conditions and other details needed to carry out the act. These regulations flesh out practical thresholds, including the approvals tied to large plots and to foreign hirers.
Practice note (BOI / IEAT): Relation to BOI and Industrial Estate land rights
In practice this act is rarely used by foreign investors. Businesses promoted by the Board of Investment or operating in zones of the Industrial Estate Authority usually secure land under those separate laws, which can allow outright ownership of land for the promoted activity, making the special long lease a fallback rather than the main route.
Use restriction: Property must be used for the stated commerce or industry
The long lease is granted strictly for the commercial or industrial purpose declared at registration. The property cannot be diverted to residential or unrelated use, and using it contrary to the registered purpose exposes the registration to cancellation by the Director-General under the act's compliance powers.