Starry Research | ‘Land Purchase and Factory Construction’ Series, Issue1: A Comprehensive Analysis of Thai Land Types and Land Title Deeds

Preface

For most manufacturing enterprises, ‘purchasing land and constructing factories’ is a mandatory subject for investment in Thailand. The Thai government has enacted relevant legislation governing both ‘land’ and ‘factories’, and the competent government authorities have also issued corresponding ministerial regulations and other legal documents to regulate and supervise such activities, which are characterized by strict oversight and detailed compliance requirements. In practice, ‘purchasing land and constructing factories’ is also one of the most common pitfalls for overseas enterprises investing in Thailand. Issues such as incorrect land classification, defective land ownership, and missing factory construction procedures may all result in a total loss of project investment.

To this end, in addition to the ‘BOI Series’ , we are launching the ‘Land Purchase and Factory Construction’ series to help enterprises investing in Thailand identify key compliance points, establish a correct understanding of the relevant issues, consolidate the compliance foundation of project investment, and provide guidance for enterprises going overseas.

The topic of this article is ‘A Comprehensive Analysis of  Land Types and Land Title Deeds in Thailand’, which primarily introduces the specific classifications of land under Thai law and their corresponding colors, as well as the types and characteristics of land title deeds corresponding to land ownership rights.

Thai Land Authority

The competent authority for land in Thailand is the Department of Lands (the ‘DOL’, also known as ‘Land Office’), which is a department under the Ministry of Interior. Its predecessor was the Land Registration Office established by the Ministry of Agriculture in 1901. After several changes in name and supervisory authority, it was officially renamed as the Department of Lands under the Ministry of Interior on August 19, 1939, and has retained this name to the present day.

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The Department of Lands has established the Bangkok Metropolitan Land Office and its branch offices in Bangkok, as well as provincial land offices and their branch offices in each province of Thailand, which are responsible for supervising the registration, use, and transfer of land in Thailand.

Types of Thai Land

Thai land is primarily divided into state-owned land and privately-owned land.

State-owned land: Pursuant to Section 2 of the Land Code, land that does not belong to any private owner is regarded as state property. Such land is supervised by government agencies including the Ministry of Finance, the Land Development Department, and the Department of Agricultural Extension. State-owned land is regarded as public property and is used for public purposes or collective interests, such as national parks, forest reserves, and state-owned land.

Privately-owned land: Refers to land that individuals are legally entitled to own, use, and engage in lawful transactions (such as purchasing, selling, leasing, or transferring ownership).

In addition, Thai land is classified into ‘color zones’ pursuant to urban planning regulations, with a total of 13 designated colors. Each color represents a specific land use category, which plays a key role in determining the types of construction permitted. For example, land designated as a ‘purple zone’ is generally permitted for the construction of industrial factories. However, such permission is not absolute and may be subject to the discretion of the relevant authorities and other specific conditions applicable to particular plots of land.

Conditions and Qualifications for Land Purchase in Thailand

Must be a Thai national individual or legal entity: Currently, Thai law does not permit foreigners to legally own land in Thailand. Therefore, only natural persons or legal entities holding Thai nationality are generally eligible to own land ownership rights. However, Thai law permits foreigners to purchase condominium units, provided that the total area of condominium units held by foreigners shall not exceed 49% of the total saleable area of the condominium.

Thai law does not impose specific age restrictions on natural persons holding land ownership rights; persons of any age may own land. However, if the landowner is a minor, certain issues may arise when performing legal acts related to the land, for example, court approval may be required when selling the land.

For non-Thai nationals, land ownership rights must be granted pursuant to specific legal provisions (e.g., BOI, IEAT): For example, pursuant to the Investment Promotion Act, promoted persons or entities may be granted the right to own land for the purpose of carrying out approved investment activities or business operations.

The land to be purchased must not be state-owned public land: Land designated as public domain may not be sold or transferred, as it is state-owned and protected, and is reserved for public use purposes.

Procedures for Land Ownership Transfer

The steps for processing the transfer of land ownership at the Department of Lands are as follows:

·       Submit the application form, evidence of legal entity, and other relevant documents;

·       Submit the documents to the public service counter for preliminary verification; once passed, a queue number will be issued to proceed to the registration counter;

·       In the presence of the registrar, both the transferor (seller) and the transferee (buyer) must sign the relevant transfer documents;

·       The official will assess the land value to calculate the official land transfer fees, including the land transfer official fee and other related charges (primarily taxes and levies), and will issue a fee estimate sheet;

·       Pay the official land transfer fee and related charges at the finance section; the payer will receive a blue receipt and a yellow receipt;

·       Submit the yellow receipt to the registrar; the blue receipt is retained by the buyer, while the seller retains the original yellow receipt;

·       The registrar will update the title deed (printed on the reverse of the document) and submit it for verification. Once confirmed, the new land title deed and sale and purchase agreement (Tor Dor 13) will be issued, marking the completion of the ownership transfer, and the buyer will become the legally recognized owner of the land.

Types and Differences of Land Title Deeds

Thai land title deeds are distinguished by different colors according to the nature of the ownership rights, as detailed below:

Red Title Deed (Nor Sor 4 Jor) (Chanote)

The Red Title Deed (Nor Sor 4 Jor) indicates that the land owner holds a permanent title to the land, and the land may be freely bought, sold, transferred, and mortgaged. It is the most formal, complete, and legally authoritative land ownership certificate in Thailand.

The Red Title Deed will specify in detail the title deed number and land location (including the sub-district, district or municipality, and province), the information of the current owner, as well as detailed information on the land (such as the area, shape, dimensions, width, length, boundary lines adjacent to surrounding properties, and reference points of the land at the time of issuance of the title deed, etc.).

The Red Title Deed also records the history of ownership changes, including transactions such as sales, mortgages, leases, subdivisions, and inheritances. The relevant land ownership information can be verified at the Department of Lands office.

In addition to the above-mentioned title deed, there is another type of ownership certificate with a red heading, namely the Condominium Unit Ownership Certificate (or Chor 2).

The Chor 2 is a legal document certifying the ownership of a condominium unit pursuant to the Condominium Act. It is issued by the Department of Lands and certifies the ownership of a particular condominium unit (condominium property). It is analogous to a land title deed. This document provides detailed information regarding the condominium unit, including the land area on which the building stands, the floor on which the unit is located, the usable area within the unit (including the balcony), the layout and design of the unit, the clear height from floor to ceiling, parking spaces, as well as rights to common property and other appurtenances.

Green Title Deed (Nor Sor 3 Gor)

Compared to the Red Title Deed, the Green Title Deed is not a complete ownership certificate. However, the Green Title Deed still grants the land holder the right to develop, utilize, purchase, sell, transfer, mortgage, lease, or evict trespassers from the land.

The land location of a Green Title Deed is generally determined through aerial survey maps, which means it does not have boundary markers or boundary posts as found in a land title deed. Instead, the boundaries are determined based on existing fences, boundary lines established by the landowner, or prominent geographical features (such as ridges, canals, or large trees). This method leaves room for potential discrepancies in land boundary lines.

The law stipulates that the holder of a Green Title Deed must actively utilize the land;

A Green Title Deed may be upgraded to a Red Title Deed (Chanote). After completing the required aerial photographs, location information, area measurements, and boundary delineations, the landowner may submit an application to the Department of Lands requesting an upgrade to a Red Title Deed (Chanote). If no objections are raised, the Department of Lands may approve the application, and the deed may be upgraded to a Red Title Deed (Chanote) upon the expiry of the statutory review period.

Black Title Deed (Nor Sor 3)

The Black Title Deed is a document issued by the Department of Lands certifying the right to use the land. However, plots covered by a Black Title Deed typically do not have clear aerial photographs, have unclear boundaries, and the plot area may be disputed. For any sale, transfer, or mortgage, it is necessary to apply for a land survey and issue a public notice; the transaction may only proceed if no objections are raised within 30 days.

Where the requisite conditions are met, a Black Title Deed may be upgraded to a Green Title Deed and ultimately to a Red Title Deed.

Blue Title Deed (Sor Por Kor 4-01)

The Blue Title Deed is a land utilization certificate issued by the Agricultural Land Reform Office pursuant to the Agricultural Land Reform Act, with the purpose of allocating land to farmers who do not have land to cultivate. The land must be used strictly for agricultural purposes and may not be used for commercial purposes. Land covered by a Blue Title Deed may not be sold or transferred to others, and may only be inherited.