Acquiring a hotel in Thailand is one of the most attractive cross-border real estate moves in Southeast Asia, but it is also one of the most regulated. A hotel is not just real estate. It is a licensed business operating on land that foreigners cannot own outright, in a sector that is restricted under the Foreign Business Act B.E. 2542 (1999), on premises that must comply with the Hotel Act B.E. 2547 (2004), with a workforce regulated by the Emergency Decree on Management of Foreigners' Working B.E. 2560 (2017), and a fiscal footprint that is increasingly cross-checked between the Land Department, the Department of Provincial Administration, the Revenue Department and the Board of Investment.
This guide is written by Thai lawyers for foreign investors who want to buy a hotel in Thailand the right way: through a structure that holds at the Land Office, at the Hotel Registrar and at the Revenue Department, with a transferable licence on closing day and no hidden criminal exposure for unlicensed operation. It covers the legal framework, the choice between asset and share deals, the hotel licence categories, the due diligence checklist, the official fees, the closing sequence and the practical tax position of a Thai hospitality acquisition.
The legal framework that shapes a Thai hotel acquisition
Four statutes do the heavy lifting in any Thai hotel deal. The Land Code Promulgating Act B.E. 2497 (1954), in particular Sections 86 and 96 bis, prohibits foreign individuals and foreign-controlled Thai companies from owning land in Thailand, save for narrow treaty-based or BOI-based exceptions. The Foreign Business Act B.E. 2542 (1999) classifies hotel operation under List Three as a business in which Thai nationals are deemed not yet ready to compete with foreigners, requiring either Thai majority ownership, a foreign business licence under Section 17, or a BOI promotion certificate to lift the restriction. The Hotel Act B.E. 2547 (2004) requires every hotel operator to hold a licence issued by the Registrar at the Department of Provincial Administration (DOPA) or, in Bangkok, the Bangkok Metropolitan Administration, before guests can be lawfully accommodated for remuneration. The Civil and Commercial Code, in Sections 538 to 545 and Sections 1410 to 1416, governs the long-term lease of land and the separate ownership of buildings, which are the two structural building blocks of most foreign-led hotel acquisitions.
Below those statutes sits a layer of ministerial regulations that practitioners read every week. The Ministerial Regulation Prescribing the Types and Criteria for Hotel Business Operation B.E. 2551 (2008), as amended by Ministerial Regulation No. 2 B.E. 2566 (2023), defines the four categories of hotels and the corresponding building, fire-safety, room-size and floor-area requirements. The Building Control Act B.E. 2522 (1979) and its ministerial regulations govern the construction permit and the certificate of building usage (Or 6) without which no hotel licence can be issued. The Town Planning Act B.E. 2562 (2019) and the local town-planning ordinances determine whether a parcel sits in a zone where a hotel is permitted at all. Layered on top of these are the Revenue Code, the Excise Tax Act B.E. 2560 (2017) (for hotels with bars and entertainment venues), the Liquor Act for alcohol service, the Food Act B.E. 2522 for in-house F&B and the Public Health Act B.E. 2535 (1992) for pools, spas and wellness areas.
Why foreigners cannot simply "buy" a hotel in Thailand
The starting point for every foreign buyer is to accept that a hotel acquisition in Thailand has two independent legal layers that must each be solved: the real estate layer, which sits at the Land Office, and the business layer, which sits at the Hotel Registrar, the Department of Business Development and, where applicable, the Board of Investment.
The real estate layer: foreigners cannot own land
Section 86 of the Land Code states that aliens may acquire land only by virtue of a treaty granting that right, and Thailand currently has no such treaty in force with any country. Section 97 extends the same prohibition to Thai juristic persons in which more than 49% of the shares are held by foreigners or in which more than half of the shareholders are foreigners. In practice, this means that no foreign individual and no foreign-majority Thai company can register the freehold of the hotel land in its own name at the Land Office. The narrow Section 96 bis exception (residential land of up to one rai for a foreign individual investing at least 40 million THB in qualifying Thai assets, with Ministerial approval) does not apply to hotel land used for commercial accommodation.
The lawful alternatives are well established. The investor may use a Thai-majority Thai limited company (foreigners up to 49% of the shares) that buys the land outright, with carefully drafted shareholder agreements, preferred shares and voting controls to protect the foreign investor's economic interest. The investor may take a registered long-term lease over the land, capped by Section 540 of the Civil and Commercial Code at 30 years per registration, renewable by mutual agreement, with the building owned separately under Section 1410 by the operating company. The investor may obtain BOI promotion, which under Section 27 of the Investment Promotion Act B.E. 2520 (1977) can authorise the promoted company to own the land genuinely required for the promoted activity. Where the building is a sectionalised condominium-hotel, foreigners can collectively hold up to 49% of the units under the Condominium Act B.E. 2522 (1979). What investors cannot do, and must not do, is use a Thai nominee shareholder to circumvent Section 86; that is a criminal offence under Sections 36 and 37 of the Land Code, with imprisonment and forced disposal of the land.
The business layer: hotels are restricted under List 3 of the Foreign Business Act
The Foreign Business Act B.E. 2542 (1999) classifies hotel operation, except hotel management services, under List Three, item 21. A foreign-majority company may not operate a hotel in Thailand unless it obtains a foreign business licence from the Director-General of the Department of Business Development under Section 17 (rare, discretionary and slow), or unless it is granted a BOI promotion certificate under Section 12 of the Investment Promotion Act, which lifts the FBA restriction by operation of law. As a result, the two mainstream structures used by foreign hotel buyers are: a Thai-majority operating company holding the licence, with foreign minority equity protected through preferred shares and contractual rights; or a BOI-promoted operating company in which foreigners may hold up to 100% of the equity, subject to BOI conditions.
BOI promotion for hotel investments
The Board of Investment promotes hotel projects under Activity 7.6 (Hotels) of the current investment promotion list, with size-based investment thresholds. The standard thresholds at the time of writing are an investment of not less than 2 million THB per room (excluding land and working capital) for hotels with 100 rooms or more, an investment of not less than 500 million THB total (excluding land and working capital) for hotels with fewer than 100 rooms, and a separate SME track for 20 to 99 rooms with an investment of at least 1 million THB per room. Promoted hotels typically benefit from a corporate income tax exemption (subject to caps on the value of net profit), import duty exemption on machinery, the right to bring in foreign experts and managers under Sections 24 to 26 of the Investment Promotion Act, and, where genuinely needed for the project, the right to own land for the promoted activity under Section 27. The exact incentives depend on the location (areas with lower per capita income receive deeper benefits), the category, and any sustainability or upgrade conditions imposed in the promotion certificate.
Asset purchase or share purchase: the structural choice
Once the foreign ownership question is solved, the buyer must decide whether to acquire the assets of the hotel (the land, building, FF&E, contracts, brand, licences) or the shares of the Thai company that owns and operates the hotel. The choice is rarely neutral; it changes the tax, the licence transfer mechanics, the historic liability profile and the timing of closing.
| Aspect | Asset purchase | Share purchase |
|---|---|---|
| What is acquired | Land (or lease), building, FF&E, inventory, contracts, IP, goodwill | 100% (or majority) of the shares of the Thai operating/owning company |
| Historic liabilities | Generally remain with the seller, except where statute attaches the liability to the asset (e.g. property tax, certain employment claims) | Inherited by the buyer with the company (tax, employment, litigation, supplier disputes, environmental) |
| Hotel licence | Re-application or transfer required; licence does not pass automatically with the building | Stays with the company; manager change must be notified, qualifications under Section 16 of the Hotel Act re-verified |
| Land Office transfer fees | 2% transfer fee, 0.5% stamp duty or 3.3% specific business tax (SBT) where applicable, withholding tax on the seller | No Land Office transfer; only 0.1% stamp duty on the share transfer instrument |
| VAT | 7% VAT on movables (FF&E, inventory) where the seller is VAT-registered; sale of land is not VATable | No VAT on the share transfer |
| Step-up of tax basis | Yes. Depreciation reset on building and FF&E at acquisition price | No. The company retains its existing tax basis |
| Employees | Transfer requires written consent of each employee under Section 13 of the Labour Protection Act B.E. 2541 (1998); accrued rights move to buyer | Employment contracts continue automatically; no individual consent needed |
| Counterparty consents | Most contracts (HMA, OTAs, suppliers, banks) need novation or assignment | Change-of-control clauses must be reviewed; some HMAs and loan agreements still require consent |
| Closing timeline | Longer, driven by Land Office and licence re-issuance | Shorter, driven by share-transfer formalities and DBD update |
In practice, foreign buyers tend to prefer asset deals for older properties with messy corporate histories, undocumented loans, prior tax disputes or unresolved litigation, even though they cost more in transfer taxes. They tend to prefer share deals when the target company is clean, is BOI-promoted, holds a valuable hotel licence with rights that would be slow or uncertain to re-obtain (notably entertainment-venue rights or grandfathered building permits), or when avoiding land transfer triggers under existing financing is critical.
The hotel licence under the Hotel Act B.E. 2547
Operating a hotel in Thailand without a valid licence is a criminal offence. Under Section 59 of the Hotel Act B.E. 2547 (2004), running an unlicensed hotel exposes the operator to imprisonment of up to one year, a fine of up to 20,000 THB, or both, and an administrative fine of up to 10,000 THB per day for as long as the violation continues. The licence is therefore not an administrative formality; it is the central asset that the buyer is acquiring, directly in a share deal and through transfer or re-issuance in an asset deal.
The four categories of hotel licence
The Ministerial Regulation Prescribing the Types and Criteria for Hotel Business Operation B.E. 2551 (2008), as amended by Ministerial Regulation No. 2 B.E. 2566 (2023), divides hotels into four categories based on the services offered. The category determines the building, room-size and fire-safety standards, the application fee and, in practice, the price the property can command.
| Category | Services included | Minimum room size | Typical use |
|---|---|---|---|
| Type 1 | Guest rooms only (no F&B, no entertainment, no conference) | 8 sqm | Small hotels, hostels, budget rooms |
| Type 2 | Guest rooms with a dining room, restaurant or kitchen | 8 sqm | Standard mid-scale hotels with on-site F&B |
| Type 3 | Guest rooms, dining and either an entertainment venue under the Entertainment Place Act, or a conference room | 14 sqm | Resorts, MICE-oriented hotels, lifestyle hotels with bars |
| Type 4 | Guest rooms, dining, entertainment venue and conference room | 14 sqm | Full-service upscale and luxury hotels |
Two operational rules deserve particular attention for buyers. First, an entertainment venue on the hotel premises (a bar, nightclub or licensed venue under the Entertainment Place Act B.E. 2509) is permitted under the hotel licence only if the property has more than 80 rooms, which is why some 60-room boutique resorts cannot lawfully sell their lobby bar as a "nightclub". Second, certain secondary licences attach to the hotel and must be transferred or re-applied for in parallel: the liquor licence under the Liquor Act, the food licence under the Food Act, the entertainment-place licence, the swimming-pool licence under the Public Health Act B.E. 2535, the spa establishment licence (where applicable) and, since the 2018 reform, the Wellness Centre / Massage for Health licence.
Building, fire-safety and zoning prerequisites
No hotel licence can be issued without a building that meets the Ministerial Regulation under the Building Control Act B.E. 2522. The single most common deal-killer in due diligence is a property that was built as a residential apartment block or as a serviced residence, and is now being sold as a "hotel" although the building permit (Or 1) and certificate of building usage (Or 6) describe a different use. The fix is rarely cheap: it requires a change-of-use application, which in turn requires the building to comply with the more demanding hotel rules on fire egress, fire stairs, sprinklers, smoke detectors, fire pumps, two-stage emergency lighting, structural load and parking ratios. The Ministerial Regulation No. 2 B.E. 2566 (2023) softened some thresholds for small accommodations of up to eight rooms or 30 occupants, allowing them to operate under a notification regime instead of a full hotel licence, provided they comply with prescribed fire-safety and notification rules; that exemption does not, however, fit most acquisition targets.
Zoning is the second prerequisite. Under the Town Planning Act B.E. 2562 (2019) and the relevant local town-planning ordinance, hotels are not permitted in every zone. Several beachfront municipalities, conservation zones and heritage districts in Bangkok, Phuket, Krabi, Chiang Mai and Koh Samui restrict either hotel use entirely or impose floor area ratio (FAR), height and setback rules that affect room count and renovation potential. A buyer should never sign a sale and purchase agreement without a written confirmation from the local planning office.
Legal due diligence: the buyer's checklist
Hotel due diligence in Thailand is broader than commercial-real-estate due diligence elsewhere because so many of the asset's value drivers (licence, brand, OTAs, employees) are non-real-estate items.
Land and title
The starting point is the land title deed. The Land Office register should be ordered for every parcel, in original at the provincial Land Office. Only Chanote (Nor Sor 4) and Nor Sor 3 Gor titles offer the level of certainty hotel investors need; weaker possessory documents (Nor Sor 3, Sor Khor 1, Por Bor Tor 5) carry boundary, occupation and registration risks and are rarely acceptable. The buyer's lawyer must verify the registered area against the actual surveyed area, the existence of registered usufructs, mortgages, leases, servitudes and the chain of title for at least ten years. Encroachments, public road rights of way, beachfront setbacks (under the Land Code, the Public Land Act and local ordinances), and the location of the property in protected forest areas (Sor Por Kor / Por Bor Tor 5 land), national parks or military zones must be confirmed in writing.
Hotel licence and operational permits
The hotel licence file held by the Registrar at DOPA (or the BMA in Bangkok) should be inspected in full, including the licence itself, any conditions attached to it, the building permit (Or 1), the certificate of building usage (Or 6), the fire-safety certification, the EIA report (where the project crossed the Environmental Impact Assessment threshold under the Enhancement and Conservation of National Environmental Quality Act B.E. 2535), and every secondary licence (liquor, food, entertainment, pool, spa, sign tax, advertising). Any inconsistency between the licensed room count and the actual room count, between the licensed services and the actual services offered, or between the registered manager and the actual manager, is a red flag. So is any pending administrative complaint or warning from the Registrar.
Corporate and contractual due diligence (share deal)
Where the deal is a share purchase, the company file at the Department of Business Development must be reviewed back to incorporation, with all changes of directors, capital and shareholders. Particular attention is paid to the foreign shareholding ratio (and any history of nominee structures), the BOI promotion certificate and its conditions, the corporate guarantees and intercompany loans, the hotel management agreement, any franchise agreement, the OTA and travel-agent contracts, the employment contracts for senior management and key revenue staff, the leases for hotel-owned restaurants and concessions, and any pending or threatened litigation. Change-of-control clauses are read line by line; many international hotel management agreements give the operator a right to terminate or to be paid a transfer fee on a change of control of the owner.
Tax and financial due diligence
The seller's audited accounts for the last five fiscal years are reviewed against the corporate income tax returns (PND 50), VAT returns (PP 30), withholding tax returns (PND 1, 3, 53, 54), specific business tax filings, social security contributions and the local property and signboard tax filings. Hotels are a frequent target for Revenue Department audits in Thailand; a clean tax history, with documented support for related-party transactions, transfer pricing and the deduction of management fees, is a significant value driver in a share deal. In an asset deal, withholding tax on the seller's gain (1% of the higher of declared price or the official appraisal value, for a Thai company seller) and the seller's specific business tax (3.3% of the higher of declared price or the appraisal value where the property has been held for less than five years and is not the seller's domicile) are normally borne by the seller but must be verified at the Land Office on closing.
Operational, HR and ESG due diligence
For an operating hotel, occupancy, ADR, RevPAR, GOP and EBITDA over the last 24 to 36 months are stress-tested against the local STR data and the property's competitive set. The state of the FF&E (room renovations, lifts, kitchen, laundry, IT, PMS, locking system) is assessed by a hospitality-specialised technical advisor; deferred maintenance is one of the silent enemies of Thai hotel valuation. On the human-resources side, the Labour Protection Act B.E. 2541 (1998) entitles dismissed employees to severance pay scaled by length of service (up to 400 days for ten years and more), which becomes a quantifiable liability whenever a buyer plans to rebrand and reduce headcount. ESG-related items (waste-water permits under the Factory Act and the Public Health Act, energy efficiency, food safety, beach access, treatment of marine wildlife in island resorts) increasingly feature in the buyer's investment committee memorandum and should be diligenced accordingly.
The transaction process: from term sheet to closing
A typical Thai hotel acquisition runs over four to six months for a share deal and six to nine months for an asset deal, although BOI applications, EIA renewals, change-of-use building permits or a full re-application for a hotel licence can extend the timetable significantly.
The process usually begins with a non-binding term sheet or letter of intent defining the basic deal terms, the exclusivity period, the due diligence access and the confidentiality obligation. A bilingual non-disclosure agreement governed by Thai law is signed before any data room is opened. The buyer then conducts its legal, tax and operational due diligence, ideally via a structured data room with a Q&A protocol. The findings drive the negotiation of the sale and purchase agreement: the price (usually expressed as enterprise value with a working capital adjustment for asset deals, or net asset value with a locked-box mechanism for share deals), the conditions precedent (regulatory approvals, BOI consent where applicable, third-party consents under HMAs and loans), the representations and warranties (with or without W&I insurance), the indemnities and the post-closing covenants (non-compete, non-solicit, transition services).
The execution phase follows with the signing of the SPA, the satisfaction of conditions precedent, and finally closing. On closing day, in an asset deal, the parties meet at the Land Office to register the transfer of land and buildings, pay the official fees from the cashier's cheques agreed in the SPA, exchange the keys, FF&E inventory and operating cash float, and submit the application for the new hotel licence (or for the transfer of the existing licence). In a share deal, the parties meet at the company's registered office to sign the share transfer instruments, update the share register, hold the directors' resolutions (new directors, new authorised signatories, new bank signatories), file the change with DBD, and notify the BOI, the Hotel Registrar and the bank.
Official fees, taxes and timing benchmarks
The table below summarises the principal official fees and taxes a buyer should expect on a Thai hotel acquisition. The figures are drawn from the Land Code, the Revenue Code and the Hotel Act fee schedule and are the headline figures used by professionals; the exact amounts depend on the appraisal value, the sale price and the structure.
| Item | Rate / amount | Authority |
|---|---|---|
| Land transfer fee (asset deal) | 2% of the official appraisal value | Land Department |
| Specific Business Tax (where land held under 5 years) | 3.3% of the higher of sale price or appraisal value | Revenue Department |
| Stamp duty (where SBT does not apply) | 0.5% of the higher of sale price or appraisal value | Revenue Department |
| Withholding tax on the seller (corporate seller) | 1% of the higher of sale price or appraisal value | Revenue Department |
| Lease registration fee | 1% of total rent over the lease term + 0.1% stamp duty | Land Department / Revenue Department |
| Stamp duty on share transfer | 0.1% of the higher of paid-up value or sale price | Revenue Department |
| Hotel licence application fee | From a few hundred to several thousand THB depending on category and rooms; calculated under the Ministerial Regulation Prescribing Fees | DOPA / BMA |
| Hotel licence annual fee | Charged per room band, payable annually; specified by Ministerial Regulation | DOPA / BMA |
| Land and Building Tax (Land and Building Tax Act B.E. 2562) | Up to 0.7% of the appraisal value, depending on use; commercial-use rate applies to operating hotels | Local administrative organisation (Tessaban / OBT) |
For BOI-promoted hotels, additional savings may be available, including import-duty exemption on machinery and equipment under Section 28 of the Investment Promotion Act, corporate income tax exemption for up to eight years (subject to a cap based on the qualifying investment) under Section 31, exemption of dividends paid out of exempt profits under Section 34, and the right to remit foreign currency abroad under Section 37. These benefits are conditional on compliance with the BOI's reporting obligations throughout the promotion period.
Risks to manage when buying a hotel in Thailand
The most expensive mistakes in Thai hotel acquisitions are repeatable. The first is operating without a valid licence during a transition period, which exposes both the seller and the buyer to criminal liability under Section 59 of the Hotel Act. The licence question must be solved before guests are checked in under the new ownership, not after. The second is the nominee structure trap: a Thai-majority company on paper that is in fact controlled by foreign capital through undisclosed loans, voting agreements or non-arm's-length pre-emption rights. The Land Code, the FBA and recent Department of Business Development circulars treat nominee arrangements as a criminal offence, with imprisonment, fines and forced unwinding. The third is building non-compliance, particularly in resorts that were built as residences and gradually converted to hotel use without the change-of-use approval; the cost of bringing such a property up to hotel-grade fire standards can exceed 30% of the building value. The fourth is the hidden tax exposure of an old Thai hotel company, where related-party charges, undocumented loans from the founder and informal cash transactions can crystallise into multi-year tax assessments after closing. The fifth is the HMA change-of-control trap: international operators routinely build in significant termination fees or right-to-rebrand triggers that are invisible to a non-specialist buyer. The sixth is EIA non-compliance for projects above the EIA threshold (typically 80 rooms or more, or hotels in environmentally sensitive areas), where retroactive approvals can take many months and are sometimes refused.
Practical tips for foreign buyers
Before signing anything, foreign investors should commission a short structuring memo from Thai counsel that compares the Thai-majority company route, the long-term lease route and the BOI route on the specific facts of the deal. They should require the seller to grant a full data room, including the original title deeds, the building permit, the certificate of building usage, the hotel licence, the EIA report (where applicable), the last five years of audited accounts and tax returns, and the HMA and franchise agreements. They should ensure that the SPA contains specific representations on the validity and transferability of the hotel licence, the absence of nominee arrangements, the building's compliance with the Building Control Act, the absence of undisclosed liabilities and the survival of the BOI promotion through the transaction. They should structure the price as a combination of a base price and an escrow or holdback for a defined period to cover the residual tax and licence risks. Where a renovation is planned, they should obtain an opinion in advance from the local planning office and from a fire-safety consultant on the realistic cost and time of compliance.
How Juslaws & Consult helps
Juslaws & Consult is a Thai law firm with a dedicated property, hospitality and corporate practice. We advise foreign buyers on the lawful structuring of hotel acquisitions in Thailand, draft and negotiate term sheets, share and asset purchase agreements, hotel management agreements and franchise agreements, run end-to-end legal due diligence, prepare and file BOI applications and foreign business licences, secure or transfer hotel licences and secondary permits with the Department of Provincial Administration, and represent investors in tax assessments, employment claims and post-closing disputes. We act for owners, operators, lenders, family offices and institutional investors across Bangkok, Phuket, Krabi, Koh Samui, Chiang Mai, Hua Hin and Pattaya, and we work in English, French and Thai.
Frequently Asked Questions
Can a foreigner own a hotel outright in Thailand?
A foreign individual or a foreign-majority company cannot own the hotel land outright. Foreigners can own up to 49% of a Thai limited company that owns the land and the building, can hold a registered 30-year lease over the land while owning the building separately under Section 1410 of the Civil and Commercial Code, can hold up to 49% of the units in a registered condominium, and can, where BOI promotion is granted under Section 27 of the Investment Promotion Act, own land genuinely required for the promoted hotel activity. The operating company must in addition comply with the Foreign Business Act, which restricts hotel operation under List 3.
Is the Hotel Act licence transferable when the property is sold?
The licence is transferable to a buyer who meets the qualifications and is not subject to the prohibitions of Section 16 of the Hotel Act, with the approval of the Registrar and in accordance with rules and procedures set by the Minister. In a share deal, the licence remains with the company; only the manager change and shareholder change must be notified. In an asset deal, the licence does not pass automatically with the building and must be transferred or re-applied for.
Should I buy the hotel through an asset deal or a share deal?
It depends on the target's history. Asset deals isolate the buyer from the seller's historic liabilities (tax, employment, litigation), allow a step-up of the depreciable base, but trigger the full Land Office transfer fees and require licence transfer and employee re-engagement. Share deals are faster, avoid land transfer fees and keep the licence in place, but the buyer inherits the company's entire history. Clean BOI-promoted Thai companies tend to be acquired as share deals; older properties with messy histories tend to be acquired as asset deals.
Do I need BOI promotion to buy a hotel in Thailand?
BOI promotion is not legally required, but it is the only realistic way to operate the hotel through a 100% foreign-owned company while complying with the Foreign Business Act, and it can authorise foreign land ownership under Section 27 of the Investment Promotion Act. For a hotel with at least 100 rooms or a total investment above 500 million THB excluding land and working capital, BOI promotion under Activity 7.6 is generally available and economically attractive due to the corporate income tax holiday and the import duty exemption.
What hotel category will my property fall under?
Under the Ministerial Regulation B.E. 2551 (2008), as amended in 2566 (2023), a hotel offering rooms only is Type 1 (minimum 8 sqm rooms), a hotel offering rooms with F&B is Type 2 (minimum 8 sqm rooms), a hotel offering rooms, F&B and either an entertainment venue or a conference room is Type 3 (minimum 14 sqm rooms), and a hotel offering rooms, F&B, an entertainment venue and a conference room is Type 4 (minimum 14 sqm rooms). Entertainment venues on hotel premises require more than 80 rooms.
What happens if the property is operating without a valid hotel licence?
Operating an unlicensed hotel is a criminal offence under Section 59 of the Hotel Act B.E. 2547, punishable by imprisonment of up to one year, a fine of up to 20,000 THB, or both, and an administrative fine of up to 10,000 THB per day for each day the violation continues. Buyers should never close on a property that is being held out as a hotel without a valid licence, except through a structured solution that suspends or cures the unlicensed operation before closing.
What is the official cost of registering the land transfer?
On the Land Office side, the principal items are the 2% transfer fee (assessed on the official appraisal value), 3.3% Specific Business Tax where applicable (on the higher of sale price or appraisal value), 0.5% stamp duty when SBT does not apply, and 1% withholding tax on a corporate seller. Allocation between buyer and seller is a matter of contract; the Land Office collects on the day. For a registered lease, the registration fee is 1% of total rent over the term, plus 0.1% stamp duty.
How long does it take to close a hotel acquisition in Thailand?
A clean share deal typically closes in four to six months from the term sheet, including due diligence, drafting and conditions precedent. An asset deal typically closes in six to nine months, with hotel licence re-issuance, building permit verification and Land Office formalities driving the timetable. BOI applications, change-of-use building permits or a fresh EIA can extend the timeline by several months.
Can the existing employees be replaced after closing?
Employees can be terminated, but the Labour Protection Act B.E. 2541 (1998) entitles dismissed employees to severance pay scaled by length of service, plus accrued leave, notice in lieu and statutory damages where dismissal is found to be unfair. In an asset deal, the transfer of employees to the buyer requires the written consent of each employee under Section 13 of the Labour Protection Act; without that consent, the seller remains the employer and is responsible for severance. Workforce restructuring should be modelled into the price.
What is the role of the Environmental Impact Assessment (EIA)?
Hotels exceeding the threshold set under the Enhancement and Conservation of National Environmental Quality Act B.E. 2535 (typically 80 rooms or more, or any hotel in environmentally sensitive areas) require an approved EIA before the building permit can be issued. The EIA approval, the conditions imposed, and any subsequent monitoring reports must form part of the due diligence; non-compliance is a frequent ground for administrative action and, in some cases, refusal to renew the hotel licence.
Are nominee structures still used to circumvent foreign ownership rules?
Nominee arrangements, in which Thai shareholders hold land or shares for the economic benefit of a foreigner, are unlawful under Section 113 of the Land Code and under the Foreign Business Act, and are now actively investigated by the Department of Business Development and the Department of Special Investigation. The risks are criminal liability, forced disposal of the land, denial of further permits and reputational exposure for both the foreigner and the Thai counterpart. The legitimate alternatives (Thai-majority company with preferred shares, registered lease, BOI promotion) are well tested and cheaper than the cost of a nominee dispute.
Can I rebrand and renovate immediately after closing?
Yes, subject to three caveats. The hotel management agreement (if one exists) often requires the operator's consent and may trigger a termination fee. The change of brand may require an update to the licence file, particularly where signage and trade marks are involved. Significant renovation work that alters the building's structure or layout requires a building modification permit under the Building Control Act and may require re-confirmation by the Hotel Registrar that the premises continue to comply with the Ministerial Regulation B.E. 2551 (2008).
Can Juslaws & Consult run the entire transaction for a foreign buyer?
Yes. Our hospitality team handles the structuring memo, the term sheet, the bilingual NDA, the legal and tax due diligence, the SPA, the BOI application where relevant, the hotel licence transfer or re-application with DOPA or the BMA, the Land Office registration, the bank account opening, the FX inward remittance documentation (FET form), the post-closing corporate updates with DBD and the Revenue Department, and the post-closing employment, tax and licence support. Contact us through the Juslaws & Consult website to schedule a consultation.












