Close your eyes for a second. You’re sitting on the terrace of a private pool villa in Koh Samui. The sun is setting over the Gulf of Thailand, you have a cold drink in hand, and the only sound is the gentle rustle of coconut palms.
It’s the dream, right?
But then you wake up and remember the paperwork. If you are a foreigner looking into buying a villa in Koh Samui, you have probably hit a wall of confusing legal terms. Agents are throwing words around like “Chanote,” “Leasehold,” “Freehold,” and “Thai Company.”
One agent tells you, “Just set up a company, it’s easy!”
Another says, “No, the law is changing, stick to a lease!”
Who do you trust?
At Sukhothai Inter Law, we have helped international investors navigate Thai property laws for over 25 years. Today, we’re going to sit down—just like we would with a friend over coffee—and explain the Leasehold vs. Freehold debate in plain English.
The Elephant in the Room: You Can’t Own the Land
Before we dive into the options, let’s get the hard truth out of the way: Under Thai law, foreigners generally cannot own land in their own name.
There are very rare exceptions (like huge BOI investments), but for 99% of villa buyers, you cannot just walk into the Land Department and put your name on a land title deed.
However, you can own the building (the structure itself). This separation between “Land” and “House” is where the two main options come from.
Option 1: Leasehold (The “Safe & Simple” Route)
What is it?
Leasehold is exactly what it sounds like. You are renting the land from the Thai owner for a long period, usually 30 years. You register this lease at the Land Department, which gives you legal rights to use the land and build on it.
The “30+30+30” Myth
You will often hear agents say, “Don’t worry, it’s a 90-year lease!”
Be careful here. Thai law currently only guarantees a maximum lease term of 30 years.
The additional “renewal” terms (the +30+30) are contractual promises between you and the landlord. If the landlord sells the land or passes away, those future promises can be legally tricky to enforce unless structured perfectly.
Pros of Leasehold:
100% Legal: There is no grey area. The law explicitly allows foreigners to hold a 30-year lease.
Lower Transfer Fees: Registration fees are much lower (1.1% of the lease value) compared to freehold transfers.
Simplicity: No need to file annual balance sheets or manage a company.
Cons of Leasehold:
It’s a Depreciating Asset: Unlike land that goes up in value, a lease goes down in value as the years tick away.
Renewal Risk: You are relying on the landlord’s cooperation in 30 years to renew.
Option 2: Freehold via a Thai Company (The “Control” Route)
What is it?
Since a Thai entity can own land, many foreigners set up a Thai Limited Company to buy the villa. The company owns the land, and you (the foreigner) control the company as the director.
Is it legal?
This is the most debated topic in Thai real estate. It is common practice, but the Thai government strictly forbids using “Nominee Shareholders” (Thai people who hold shares just to help you bypass the law but have no real investment).
If your company is active, pays taxes, and has legitimate business activity (like renting out the villa), this structure is much safer and more robust.
Pros of Company Freehold:
Perpetual Ownership: The company owns the land forever. There is no 30-year clock ticking.
Control: As the director, you sign for everything. You can sell the land or pass it on to your heirs by transferring the company shares.
Capital Appreciation: If land prices in Koh Samui skyrocket, your company benefits from that value growth.
Cons of Company Freehold:
Higher Maintenance: You must file annual financial statements and pay taxes (we can help with this!).
Nominee Risk: You need to structure the shareholders correctly to avoid legal scrutiny.
Higher Setup Costs: Buying a villa this way is more expensive upfront.
The “Secret” Third Option: Superficies
Here is something many agents won’t tell you about. You can combine the best of both worlds using a legal right called Superficies.
Lease the Land: You take a 30-year lease on the plot.
Own the House: You register a “Superficies” or simply transfer the building permit into your name.
This means you own the bricks and mortar Freehold, while the land is Leasehold. This gives you much stronger rights than a simple lease, as the landlord cannot easily kick you off land that has your house on it!
Comparison Table: At a Glance
| Feature | Leasehold | Company Freehold |
| Ownership | You own the “Right to Use” | The Company owns the Land |
| Duration | Max 30 Years (Guaranteed) | Forever (Perpetual) |
| Maintenance | Low (No annual filings) | Medium (Audit + Tax filings) |
| Safety | High (Legally clear) | Medium (Must avoid nominees) |
| Resale | Harder as lease shortens | Easier (Sell the company) |
| Cost | Cheaper registration | Higher taxes & setup fees |
Which One Should You Choose?
Choose Leasehold if: You are buying a holiday home for retirement, want zero hassle, and don’t care about leaving the asset to your great-grandchildren.
Choose Company Freehold if: You are an investor looking for ROI, you plan to rent the villa out as a business, or you are buying a high-value luxury property (20M THB+) where capital appreciation matters.
The “Must-Do” Step: Due Diligence
Whether you choose Leasehold or Freehold, never sign a contract without Due Diligence.
In Koh Samui, we frequently see issues with:
Access Rights: Does the villa actually have a legal road to it? (Servitude rights)
Title Deeds: Is the land actually Chanote (top title), or is it agricultural land where building is illegal?
Developer Debts: Is the land mortgaged to a bank?
At Sukhothai Inter Law, we act as your shield. We check the title deed, verify the developer, and structure your contract to protect your money.
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Ready to discuss your Koh Samui villa purchase?
Koh Samui Office: 119/2 Moo 1, T.Bophut, A. Koh Samui, Surathani, 84320
Bangkok Office: 17 Chan 35, Chan Road, Sathorn, Bangkok 10120
Pattaya Office: 33/35 Moo 11, Soi Kohpai, (Soi 6 Theprasit) T. Nongprue, A. Banglamung, Chonburi, 20150
📞 Phone: +662 212 6866-7
📱 Whatsapp: +66846764436
📧 Email: info@sukhothaiinterlaw.com
