Agricultural Land Leases Off Limit to Foreigners

Amendments to the Agricultural Land Lease Act effective as of 30 April 2016 introduce a broad prohibition on “foreigners” from leasing land for agricultural purposes.

The amendments define “foreigner” generally along the same lines as Thailand’s Foreign Business Act, with one major difference:  juristic entities (such as limited companies or partnerships) which have as little as 25% non-Thai ownership will be considered “foreign”.

The amendments do not apply to foreigners who are protected by treaty or receive Board of Investment promotion.

Significantly, there is no grandfathering clause in the amendments, thus they criminalize structures that were legal before the amendments went into effect.  Parties do, however, have three years to comply with the amendments, meaning “foreigners” will have a period to divest holdings that were legal under prior law.

While both landlords and tenants are subject to possible imprisonment and fines for violation of the amendments, the penalties are particularly harsh for foreign tenants, who face up to three years of imprisonment (compared to a maximum of three months for landlords) and fines up to THB 1,000,000  (compared to a maximum fine of THB 500,000 for landlords).