Why Thai Government Officials Law Doesn’t Always Match Their Opinions
Thai government officials law grants deep respect and deference culturally — but that doesn’t mean an official’s opinion always reflects what the law actually says.In Thailand, government officials are generally considered far more authoritative than in Western countries. Thai culture also places particularly high regard on non-conflict as a virtue. As a result, government officials’ opinions are given what others might consider a peculiarly high degree of deference. This can sometimes create difficulties for potential investors when an official’s opinion is inconsistent with the law — or with logic. To illustrate, we offer two examples drawn from our years of practice in Thailand.
1. Building Permits
Suppose you invest in a villa. You hire a construction company — your “contractor” — to build it for you, and for convenience, the contractor applies for the building permit so construction complies with land use and building laws. You later intend to register certain rights on your villa at the Land Department. In our consistent experience, the official will refuse to do so since the building permit is not in your name. Why? Good question. The official’s reasoning is that because you did not personally receive the administrative permission to build, they do not consider you the owner of your villa — even though the law clearly states otherwise. Having legal permission to conduct an activity does not, in itself, create ownership rights over the property used in that activity.
2. Land Registrations
Long-term land leases are a common investment vehicle for foreigners in Thailand, and discrepancies between the actual law and officials’ interpretation of it are common here too. For example, even though the law clearly allows for an optional renewal of a lease up to and including the 30-year maximum term, current administrative practice generally refuses to allow such a renewal clause to be included if you want the lease registered — and registration is required in Thailand for a lease to be enforceable beyond the first three years. Similarly, it is generally not possible to register a lease with a clause granting an option to purchase the land, even though Thai Supreme Court precedent has clearly ruled that a foreigner may enter into a stand-alone, legally enforceable land purchase contract.
In any event, the Land Code specifically provides that land officials are not permitted to refuse such registrations merely out of concern that the action might later be challenged and voided. In such cases, the law requires the official to proceed with the registration. The reasoning is clear: it is the role of the courts, not administrative officials, to rule on issues of law. In Thailand, however, the role of the former is too often usurped by the latter.
These examples illustrate a recurring theme in how Thai government officials law is applied in practice: cultural deference toward administrative authority can sometimes create a gap between what officials believe and what the law, courts, and legislative text actually provide.
Allowing an official’s interpretation to “win the day” in these cases is clearly not ideal — or even acceptable — for the investor. But in Thai culture, officials are often regarded as nearly omniscient, and contradicting one is virtually taboo, even for many Thai lawyers. Fortunately, such difficulties are not always, or even usually, insurmountable. In many cases, through patient, culturally sensitive, and legally informed negotiation, officials can be brought to recognize what the law actually says — even when it differs from what they initially believed. This is an indispensable role for competent legal counsel, and investors should keep firmly in mind that having such counsel is all the more important when investing abroad.