Sap-Ing-Sith — Real estate investments without Thais

PUGNATORIUS Ltd.
Sep 26 · 3 min read

End of October 2019, a new law will be effective that disrupts Thailand’s property industry. The Sap-Ing-Sith Act creates a new property acquisition structure for mainly foreign investors in the land of smile. #SapIngSith

The Sap-Ing-Sith right mirrors the positive aspects of Thailand’s Land Code while it avoids the negative aspects — from a foreign investment perspective. The Thai viewpoint is obviously different and as soon as the content of the new legislation is better known in Thailand, it is not a big surprise when certain concerns are raised in public.

The Sap-Ing-Sith right is created to avoid any restrictions on Thailand’s foreigner legislation. Foreigners can own this new right to benefit for 30 years same same as the holder of legal title in the land. Legal ownership is still reserved for Thai persons only. However, under the Sap-Ing-Sith structure, Thais remain naked ownership, stripped off from normal ownership rights.

The Sap-Ing-Sith investments should soon replace any leasehold structures. Under the lease, the landlord and keeps control over the property has strong participation rights, is required for a transfer of the investment and any other restructuring. All this becomes not necessary under the new model. The beneficiary of the Sap-Ing-Sith can do what he wants. No consent required and he just has to inform the landowner in case of substantial damage to the property.

The foreign property investor does not need Thai participation even compared with the minority shareholding in a Thai landowning Co., Ltd. As a Sap-Ing-Sith holder, he needs no Thai company, he needs no Thai majority shareholders, no shareholders agreement with Thai partners, no protection against Thai dominance and co-determination rights.

The Sap-ing-Sith can be transferred without Thai consent, is subject to inheritance, can be mortgaged without the Thai landowner’s participation and gives — for 30 years — substantial the same right as a holder of the legal title.

The Sap-Ing-Sith Act will be applicable law end of October 2019, if the government does not use its superpower rights under Section 44 to stop it. And the new law might be abrogated in later years if it is not acceptable to Thai society. As of today, it seems to be an offer you can’t refuse.

#SapIngSith — All the details are described at:

PUGNATORIUS Ltd.

Written by

Bangkok-based specialist provider of bespoke transactional legal and tax advice on foreign investments in Thailand.

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