Agriculture in Thailand: Legal Structures for Foreign-Controlled Farms

TL;DR

Direct foreign ownership of Thai agricultural land is prohibited under the Land Code B.E. 2497 (1954), but three lawful structures allow foreign capital to participate in Thai farming: (1) BOI agricultural promotion under the Investment Promotion Act B.E. 2520 (1977), where Section 27 permits a promoted entity to own land for the promoted activity; (2) long-term leases under CCC Section 540 capped at 30 years; (3) Thai-majority joint-venture companies with foreigners as minority shareholders. The principal regulators are the Department of Agriculture (กรมวิชาการเกษตร), the Department of Agricultural Extension (กรมส่งเสริมการเกษตร), and the Department of Livestock Development. Pesticide, seed, fertilizer, and organic certifications are separate licence regimes, and fresh-produce exports require export licensing and sanitary/phytosanitary certificates.

The Land-Ownership Barrier

Section 86 of the Land Code B.E. 2497 (1954) prohibits foreign natural and juristic persons from owning land except where international treaties allow or by special statute. Foreign-controlled companies (under the Foreign Business Act B.E. 2542 (1999) 49 % cap) are likewise treated as foreign for Land Code purposes. Direct purchase of farmland by a foreigner or foreign-controlled entity is therefore void; nominee structures attempting to circumvent the prohibition risk Land Code criminal liability (Sections 96-113) and FBA prosecution.

Pathway 1: BOI Agricultural Promotion

The Board of Investment (BOI / สำนักงานคณะกรรมการส่งเสริมการลงทุน) grants promoted-activity status to qualifying agricultural projects under the Investment Promotion Act B.E. 2520 (1977). Eligible activities include:

• Large-scale crop production using approved technologies (precision agriculture, hydroponics, greenhouse).
• Livestock production (dairy, pig, poultry) above defined scale thresholds.
• Aquaculture and shrimp farming.
• Plant tissue culture and seed production.
• Smart-farming/IoT-enabled agriculture.
• Organic agriculture certified under approved standards.

BOI promotion provides:

• Section 27 — permission for the promoted entity to own land for the promoted activity even where the entity is foreign-controlled, subject to BOI conditions and the land being used for the promoted purpose.
• Section 31 — corporate income tax holiday (typically 3-8 years) for qualifying agricultural categories.
• Tariff exemptions on imported machinery and certain inputs.
• Permission to bring in foreign technicians under simplified Smart Visa or BOI work-permit channels.

The application is filed at BOI in English; approval timelines run 60-90 working days for standard categories. The Section 27 land permission is conditional — disposal of the project or non-use for the promoted activity triggers an obligation to dispose of the land within a defined period.

Pathway 2: Long-Term Lease (CCC Section 540)

Foreign or foreign-controlled investors can lease agricultural land for up to 30 years under CCC Section 540, registered at the local Land Office where the lease exceeds 3 years. Practical features:

• Registration at the Land Office is essential for enforceability against third parties and successors of the lessor.
• Renewal options are personal contractual rights and not registrable in advance — courts treat ex-ante "guaranteed renewal" clauses with caution.
• Lease can be combined with an option to acquire crops, produce, or processing facilities owned by the lessee.
• Buildings, fences, irrigation, greenhouses, and other improvements built on the leased land can be owned by the lessee under a separate Right of Superficies or Usufruct registration where appropriate.

Long lease is the most common structure for foreign agribusiness without BOI promotion, although the 30-year cap limits security for capital-intensive perennial crops (rubber, palm, fruit orchards).

Pathway 3: Thai-Majority Joint-Venture Companies

A Thai limited company with at least 51 % Thai shareholding (and majority Thai directors per the company's articles) can hold land under the Land Code. Foreign investors take up to 49 % of capital, frequently with class-share or preference-share arrangements securing economic rights. Practical guardrails:

• Avoid nominee shareholding — the Foreign Business Act B.E. 2542 (1999) Section 36 criminalises nominee structures and the Department of Business Development actively prosecutes after 2023 reforms.
• Land Office scrutiny — under MoI Regulations issued in 2006 and reinforced in 2020, the Land Office requires evidence of source of funds from Thai shareholders when a Thai-foreign joint-venture company acquires land.
• Real economic substance — Thai shareholders should be genuinely contributing capital and bearing risk, not merely nominal.

Sector Regulators and Licensing

Day-to-day operational regulation falls across several ministries and departments:

The Plant Variety Protection Act B.E. 2542 (1999) provides UPOV-style protection for plant breeders' rights; registration is at the Department of Agriculture. Pesticide registration follows the Hazardous Substances Act regime, with Thailand having phased out paraquat and chlorpyrifos in 2020 and continuing to update its controlled-substance lists.

Export Licensing and SPS Certification

Fresh produce and processed agricultural exports face two parallel layers:

• Export licensing for products listed under Export and Import of Goods Act B.E. 2522 (1979) notifications — rice exports, for example, require Department of Foreign Trade authorisation.
• Sanitary and Phytosanitary (SPS) certificates from the Department of Agriculture or Department of Livestock for fresh produce, plants, and animal products, satisfying importing-country requirements (e.g., EU, Japan, China).

The Agricultural Cooperatives Act B.E. 2542 (1999) provides a special vehicle for small-scale collective farming that can interact with BOI promotion via processing facilities.

Common Mistakes

Avoid these traps:

• Nominee Thai shareholders. Section 36 FBA prosecutions are real; ensure genuine economic substance.
• Relying on a 30-year lease "automatically renewable to 90 years." Renewal beyond 30 years is a personal right, not registrable; treat it as commercial expectation only.
• Treating BOI Section 27 land as freely transferable. The land is tied to the promoted activity; disposal triggers an obligation to off-load.
• Forgetting pesticide registration. Importing or using an unregistered pesticide is a Hazardous Substances Act offence.
• Skipping GAP/organic certification before export. EU, Japan and China importers require third-party certification.

FAQs

1. Can a foreigner farm rice in Thailand?

Not as a direct landowner. Through a BOI-promoted entity for high-tech rice production, a long lease of paddy land, or as a minority shareholder in a Thai-majority company, foreign capital can lawfully participate.

2. Does BOI Section 27 land ownership last forever?

It lasts as long as the land is used for the promoted activity and BOI promotion is current. Disposal of the project or change of use requires the company to dispose of the land within the period set by BOI.

3. Are there minimum scale thresholds for BOI agriculture?

Yes — each category has scale, capital, or technology thresholds. Smallholder farming generally does not qualify; the regime targets commercial-scale modern agriculture.

4. How is paraquat treated now?

Paraquat was banned under Hazardous Substances Act notifications taking effect 1 June 2020. Continued possession or use is a criminal offence; Thailand has not reversed the ban despite agribusiness lobbying.

5. Can foreign-owned farms export under their own name?

Yes, provided the entity is registered as an exporter and obtains the required SPS certificates and any product-specific export licences. The exporting entity does not have to own land — it can be a BOI processor or trading company.

Related Reading

• BOI Tax Incentives: Section 31/32 and Category Tiers
• Foreign Business Act 2025 Amendments
• What is the 49/51 Rule in Thailand?
• 30-Year Lease Renewal Options in Thailand: The Reality
• Nominee Company Prosecution: FBA Enforcement