You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

May 29, 2015

Completing Your Construction Project in Thailand

Bangkok Post, Corporate Counsellor Column

Before you embark on designing and building your dream home—or business—in Thailand, pause for a moment.  As exciting and full of potential as your project may be, the process of completing a construction project involves many rules and regulations, as well as reliance on contractors. Therefore, before committing yourself, you should know what you are getting yourself into and plan accordingly.

First, consider the nature of your construction project. Thailand has environmental and land-use restrictions that may impact possible locations for your project. Land-use and environmental restrictions are governed by the Town and City Planning Act B.E. 2518 (1975), by amendments to this act, and by ministerial regulations arising out of it.

The restrictions under the Town and City Planning Act differ from town to town and city to city. Their purpose is to formulate, execute, and enforce comprehensive city plans that promote sanitation, convenience, orderliness, attractiveness, utilization of property, public safety, economic development, social and cultural development and preservation, and so on. Land-use regulations in Thailand usually come in the form of Euclidean zoning plans that limit the uses of land in particular zones. The possible zones in Thailand include:

  • low-population residential zones;
  • medium-population residential zones;
  • commercial and high-population residential zones;
  • industrial and warehouse zones;
  • special industrial zones;
  • rural and agricultural areas;
  • recreational and environmental preservation areas;
  • national park areas;
  • educational institution areas;
  • Thai culture promotion areas;
  • religious institution areas;
  • government office and public utilities areas; and
  • communication and transportation areas.

On top of land-use regulations, there are often overlapping, location-specific environmental regulations. These regulations usually include height restrictions for buildings and restrictions on the percentage of land that can be developed.

Second, consider the design of your project. Thailand has standards for the design of building projects. These standards are outlined in the Building Control Act B.E. 2522 (1979), in amendments to this act, and in ministerial regulations issued under it. They can include standards relating to restrictions on the size, shape, and height of buildings; regulations regarding the number and design of bathrooms and toilets; and regulations prescribing the aesthetic features of buildings. Restrictions can vary based on Province, so it is important to contact the Land Department Office local to where you want to build to obtain detailed information on the restrictions.

Third, consider the construction of your project. Thailand’s construction, renovation, and alteration standards can be found in the Building Control Act B.E. 2522 (1979), in amendments to this act, and in ministerial regulations issued under it. Construction standards include quality and durability regulations regarding construction materials; regulations governing electrical, water, and gas systems; fire safety standards; requirements regarding the distance between buildings and the road or public land; safety standards in regard to construction; and so on.

Fourth, compile a reference list of permits, reports, and inspections that will be necessary for the completion of your project. A permit is required for most construction projects in Thailand. There are different types of permits, reporting requirements, and inspection requirements for construction projects, depending on their location and scope. For example, different permits and procedures are required for construction, alteration, demolition, removal, and change-of-use. Permits for construction projects can be obtained at the Land Department Office.

In order to be issued a building permit, you must already have—among other things—relevant infrastructure permits (such as water and electricity permits), relevant land development permits, and completed architectural plans. The exact list of permits, reporting requirements, and inspection requirements that will be relevant to the completion of your project will depend on the specifics of your project.

Fifth, remember that trust is good but control is better. Consider carefully who to engage in the design and construction of your project, and under which terms. Contract work is governed in Thailand by the Title pertaining to Hire of Work in the Civil and Commercial Code (Sections 587 to 607), but you will want to create a written contract between you and your contractors to ensure that expectations are clear. This will help you avoid problems down the road. A good contract should include, for example:

  • the goals and parameters of the contracted-for job, including a copy of the construction plans;
  • the price mechanism for determining the cost of the job;
  • the terms and method of payments;
  • the completion date;
  • liquidated damages for delays or breach;
  • who will provide materials and equipment;
  • quality specifications;
  • at what time the title to materials and equipment provided by the contractor passes to you;
  • insurance requirements for the project;
  • post-construction liability; and
  • mechanisms for dispute resolution.

These considerations should not stop you from pursuing your construction project in Thailand, but they should be born in mind. Otherwise, you may be opening yourself up to heavy fines, a prison sentence, the demolition of your construction project, and lawsuits.

RELATED INSIGHTS​ 

March 4, 2025
On February 20, 2025, the National Assembly of Vietnam made public the executed Resolution 170/2024/QH15, which outlines special mechanisms and policies to address difficulties and obstacles related to notable real estate projects and land issues in Da Nang, Ho Chi Minh City, and Khanh Hoa Province. This resolution, with an effective date of April 1, 2025, aims to resolve issues identified in inspection conclusions, audits, and court judgments, including 1,313 cases of land-use term violations in Da Nang. Solutions Resolution 170 provides a variety of mechanisms and policies to clear the way for projects to proceed with implementation. These may include, depending on the specific location, the following solutions. For issued Land Use Rights Certificates (LURC) that violate the land-use term for business production land in Da Nang: For projects that have already been invested in and utilized, the land-use terms in the LURC may be adjusted to 50 years from the date of the decision on land allocation, land lease, conversion of land use purpose, or actual land handover. For continued use of land, determining land prices, and calculating land use fees and land rental fees applicable to a list of projects in Da Nang, Ho Chi Minh City, and Khanh Hoa Province: The city/provincial People’s Committees will review and complete, within their authority, the procedures related to land, investment, construction, environment, and forestry of such projects in accordance with the current laws. Projects that meet legal and regulatory requirements after thorough review and compliance checks will be allowed to continue, provided they are aligned with urban planning, environmental standards, and national security requirements. In addition, investors must fulfill applicable financial obligations, including land use fees and land rental payments, which will be reassessed and collected based on the land price tables applicable in Da Nang, Ho Chi
February 21, 2025
As Vietnam continues its government restructuring, including the merging of several key ministries, the country is signaling that mergers of provinces could be next. Conclusion 126-KL/TW of the Politburo and Secretariat, issued on February 14, 2025, sets out several tasks for continuing to streamline the political system in 2025, notably including, among others, the following: Elimination of intermediate administrative levels, and mergers of provincial units: The Government Party Committee is tasked with researching and planning for the elimination of intermediate administrative levels (district levels); reorganizing the commune level with structures, functions, duties, powers, and responsibilities aligned with the new organizational model; and proposing the merging of some provincial administrative units. A report to the Politburo is required by Q3 2025. Reorganization of police structure: The Central Public Security Party Committee is tasked with leading and coordinating the implementation of a three-tier police organization, eliminating the district-level police. Judicial system reforms: The Central Party Committees of the Supreme People’s Court and the Supreme People’s Procuracy are tasked with researching and advising on the organizational model for courts and procuracies, and proposing amendments and supplements to relevant party mechanisms and state laws, with the aim of eliminating the district level. A report to the Politburo is required by Q2 2025. Implications of Merging Provinces The merging of provinces could bring positive impacts as well as new challenges. The expected benefits include: Administrative efficiency and cost saving: Reducing the number of administrative units could lead to more efficient governance and decision-making processes, as well as lower administrative costs due to fewer government offices and personnel. Economic development: Larger administrative areas can benefit from better allocation of resources and infrastructure development. Larger provinces may also attract more investment due to increased economic potential and market size. Improved service delivery: Public services could improve
January 16, 2025
On January 13, 2025, Thailand’s cabinet approved in principle the draft Entertainment Complex Act, as proposed by the Ministry of Finance. This landmark legislative proposal, which would allow casinos as part of larger “entertainment complexes,” will now proceed through further parliamentary review and approval. Key provisions of the draft act are described below. Corporate structure: Entertainment complexes must be operated by Thai-registered limited companies or public limited companies with a minimum paid-up capital of THB 10 billion. Directors of the licensed entity must be individuals and have the qualifications and none of the prohibited characteristics specified in the draft act. The draft act does not impose restrictions on foreign-majority ownership structures; however, it is worth monitoring whether any amendments addressing this matter are introduced during the legislative process. Operating conditions: Each entertainment complex must be located in an area designated under a royal decree. It must also include at least four types of entertainment businesses listed in the annex to the draft act (e.g., shopping mall, hotel, sports stadium, amusement park), along with a casino. The allocation of casino space must comply with regulations to be specified at a later date. Licensing conditions: Licenses will be valid for 30 years, renewable in increments of up to 10 years. The license issuance fee is THB 5 billion, the annual fee is THB 1 billion, and the renewal fee is THB 5 billion. The Entertainment Complex Policy Committee, chaired by the prime minister, will review and approve applications. Online gambling restrictions: Licensees are prohibited from offering gambling through internet-connected systems or electronic devices that allow access from outside the casino premises. Labor requirements: Thai and foreign employee ratios must adhere to prescribed regulations. Land privileges: Lease agreements for land use are limited to 50 years. Renewal is permitted for up to
January 8, 2025
Thailand’s Board of Investment (BOI) has issued regulations revising its criteria for certain foreign companies that receive promotional privileges to own land under limited circumstances. The revised allowance is detailed in the Notification of the Board of Investment No. 16/2567 Re: Criteria for Permitting Foreign Juristic Persons Receiving Investment Promotion to Hold Land Ownership for Office and Residence, which was published in the Government Gazette on December 9, 2024, after having been officially issued on November 1, 2024. The notification was made in conjunction with the subordinate Notification of the Office of the Board of Investment No. Por. 8/2567 Re: Criteria and Conditions for Permitting Foreign Juristic Persons Receiving Investment Promotion to Own Land for Office and Residence for Operational-Level Workers to Operate Business Granted Investment Promotion, dated November 4, 2024. Under the new BOI notification and subordinate notification, foreign juristic persons that receive promotional privileges from the BOI, with paid-up registered capital of at least THB 50 million, are eligible to own land for office use or residential purposes, subject to certain criteria and conditions: Office use. Land used for this purpose must be for an office of the relevant BOI-promoted business, with an area limit of 5 rai (8,000 square meters). Residential use. Land used for this purpose must be for the residences of operational-level workers (i.e., unskilled laborers), with an area limit of 20 rai (32,000 square meters). In addition, there must be common facilities (e.g., parking, first-aid room, kitchen, and other amenities, as approved by the BOI). The land must be located within 10 kilometers of the place of business operation, and the number of rooms must be consistent with the number of workers. For more information on this notification, or on any aspect of property law in Thailand, please contact Chaiwat Keratisuthisathorn at  [email protected],