Commercial Property Investment in Thailand: A Guide for Overseas Investors

Thailand's commercial property market offers genuine income and capital growth opportunities, underpinned by a growing economy, a booming tourism sector, expanding manufacturing base (particularly in the Eastern Economic Corridor), and Bangkok's emergence as a regional hub for multinationals seeking Southeast Asian headquarters. However, foreign investors face significant legal constraints on direct property ownership that make structuring commercial investments more complex than in most other markets featured in this series. Understanding these constraints is the starting point for any serious commercial property strategy in Thailand.

Legal Framework for Foreign Commercial Property Investment

The Foreign Business Act (FBA)

The Foreign Business Act B.E. 2542 (1999) restricts foreign participation in a wide range of business activities in Thailand, including most property-related businesses. Crucially, "owning land" is also restricted to Thai nationals under the Land Code. Foreign entities and individuals generally cannot own land (as distinct from buildings) in Thailand.

This fundamental constraint shapes every commercial property investment structure available to overseas investors:

Available structures include:

• Condominium-unit ownership — foreigners can own condominium units outright up to the 49% foreign quota. This is primarily residential but applies to mixed-use condominiums with commercial ground-floor units.
• Leasehold — long-term leases (typically 30 years, registerable and renewable) over commercial land and buildings are the most common route. Leasehold interests are enforceable and registerable at the Land Department.
• Thai company (Thai majority owned) — a Thai-majority company can hold land and commercial property; a foreign investor can hold shares in such a company, subject to FBA restrictions on business activities.
• PT PMA equivalent via BOI promotion — the Board of Investment of Thailand offers certain promoted activities that can allow majority foreign ownership in qualifying business contexts, but this is activity-specific.
• Real estate investment trusts (REITs) — Thai-listed REITs (see below) provide portfolio exposure without direct ownership.

Nominee arrangements — in which a Thai national holds property on behalf of a foreign investor — are illegal under Thai law and subject to criminal sanction. This practice is not recommended.

Commercial Property Sectors

Office

Bangkok's Central Business District (CBD) — comprising Silom, Sathorn, Wireless Road (Withayu), and Asoke — houses the headquarters of most major multinationals, banks, and government bodies. Grade A office stock in Bangkok is modest by global city standards; significant new supply has been added in areas like Ratchadamri and the extended CBD.

Occupancy rates in prime Bangkok offices have generally remained above 85%, supported by multinationals seeking Southeast Asian hubs and the growth of technology and financial services sectors. Rents in grade A Bangkok CBD offices range from THB 800–1,400 per sqm per month (as of 2026). Secondary offices in suburban areas command significantly lower rents.

Retail

Thailand's retail market is dominated by large shopping complexes — notably the Siam Paragon-CentralWorld corridor in Bangkok — alongside community malls, neighbourhood retail, and standalone units. Bangkok retail is sophisticated; second-tier cities (Chiang Mai, Phuket, Pattaya, Korat, Khon Kaen) offer community retail opportunities.

For overseas investors, leasehold interests in retail units within managed shopping developments represent the most accessible entry point. Direct land ownership for standalone retail development is generally not available.

Hospitality

Thailand's hospitality sector is one of Southeast Asia's strongest. The country received over 28 million international tourists in 2023 and is targeting continued growth. Hotel investment — particularly in Bangkok, Phuket, Koh Samui, and Pattaya — attracts significant foreign capital.

Hotels can be held through Thai companies (which can own land), and hospitality business operations can be conducted by foreign companies under certain BOI-promoted categories. Hotel investment requires a detailed understanding of the Hotel Act, fire safety standards, and the relevant local regulatory requirements. Leasehold hotel investments (where a foreign individual leases land and a Thai company operates the hotel) are also common.

Industrial and EEC

The Eastern Economic Corridor (EEC) is Thailand's most ambitious industrial policy initiative — a special economic zone covering Chachoengsao, Chonburi, and Rayong provinces that offers tax incentives, relaxed foreign ownership rules for certain industrial activities, and infrastructure investment (a new high-speed rail link connecting Bangkok's Suvarnabhumi and Don Mueang airports to U-Tapao). The EEC has attracted automotive manufacturers, aerospace maintenance, and electronics production.

Foreign investment in EEC industrial property can benefit from BOI promotions that relax standard FBA constraints. The Industrial Estate Authority of Thailand (IEAT) manages industrial estates; leasehold and some freehold (through promoted entities) interests are available.

Thai REITs

Thailand has an established REIT framework regulated by the Securities and Exchange Commission (SEC). Thai REITs (previously called Property Funds, now operating under the 2013 Trust for Capital Market Transactions Act) are listed on the Stock Exchange of Thailand (SET) and provide liquid exposure to commercial property — offices, retail, hotels, logistics — without the constraints of direct ownership.

For overseas investors unable or unwilling to navigate the structural complexities of direct commercial property acquisition, Thai REITs offer a transparent, regulated, and liquid alternative. As of 2026, the Thai REIT market includes trusts focused on logistics, retail, and hotels with yields typically in the range of 5–8%.

Dividend withholding tax of 10% applies to REIT distributions paid to non-resident investors, though double taxation treaty provisions between Thailand and various countries may affect the net position.

Investment Returns

Commercial property investment returns in Thailand (as of 2026, leasehold or indirect structures):

• Grade A office, Bangkok CBD: 6–8% initial yield on leasehold interest cost
• Community retail, Bangkok suburbs: 7–9%
• Hospitality (hotel or serviced apartment): highly variable, 6–12% gross depending on operator and location
• Industrial/logistics, EEC: 7–9%

These figures are indicative; actual returns depend heavily on lease structure, tenant quality, location, and whether the investment is held directly or through a managed vehicle.

Tax Considerations

Thailand does not impose a capital gains tax at the national level on real estate disposals by companies; individuals pay a withholding tax at the time of transfer calculated on the assessed value, land appreciation tax, and specific business tax (if applicable). Rental income from commercial property held by a Thai company is subject to corporate income tax (currently 20% for most companies, with reduced rates for SMEs and BOI-promoted entities).

Non-resident investors receiving Thai-sourced rental income through a Thai company structure will also face Thai withholding tax on dividends distributed from the company. Tax treaty analysis is advisable.

Important Caveats

Thailand's property laws, Foreign Business Act restrictions, BOI promotion criteria, and tax regulations are subject to change. The legal landscape for foreign investment has evolved considerably over the past 20 years and further reforms are under discussion. Nominee arrangements remain illegal and exposed investors to criminal liability. This guide is for general information as of 2026 and does not constitute legal, financial, or tax advice. Always obtain current advice from a qualified Thai lawyer and tax adviser before proceeding.

How Global Investments Can Help

Navigating Thailand's commercial property market requires specialised local expertise — in Thai property law, BOI promotion, and the EEC framework. Global Investments works with experienced Thai legal firms and commercial property advisers who support overseas investors across the Bangkok office market, Phuket hospitality sector, and EEC industrial investment. Contact us to discuss how we can help you access Thai commercial property effectively.