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Usufruct Agreement in Thailand

Usufruct Agreement in Thailand: A Comprehensive Guide

When it comes to property ownership in Thailand, foreigners are usually not allowed to own land outright. However, they can still enjoy the benefits of owning a property by entering into a usufruct agreement. In this article, we will explore what a usufruct agreement is, how it works, and why it might be advantageous for you.

What is a Usufruct Agreement?

A usufruct agreement, also known as a “right of use” agreement, is a legal arrangement in which the owner of a property grants a third party the right to use and enjoy the property for a specified period of time. This arrangement is quite common in Thailand, where foreign investors often seek to purchase property without actually owning it.

Under a usufruct agreement, the third party (referred to as the usufructuary) is allowed to reside in the property, rent it out, or use it for commercial purposes, as long as they do not damage the property or violate any other terms of the agreement. The owner (referred to as the naked owner) retains ownership of the property throughout the duration of the agreement and is entitled to reclaim it once the usufruct expires.

How Does a Usufruct Agreement Work?

A usufruct agreement is a legally binding contract that must be registered at the local land office. The contract should include details such as the duration of the usufruct, the rights and obligations of each party, and the terms of termination or renewal. It is recommended to have the agreement drafted by a qualified lawyer to ensure that it is both legal and fair to all parties involved.

Once the agreement is signed and registered, the usufructuary is permitted to exercise all the rights of ownership, except for transferring or selling the property. They may use the property for any lawful purpose, subject to any specific limitations or conditions agreed upon in the contract. In most cases, the usufructuary is also responsible for paying any taxes, fees, or maintenance costs associated with the property.

Why Choose a Usufruct Agreement?

There are several reasons why foreigners may opt for a usufruct agreement rather than outright ownership of a property. One of the main benefits is that it allows them to maintain control over the property without having to go through a complicated legal process. Moreover, it provides a level of security in case of a divorce or death of the foreign owner, as the usufructuary can continue to reside in the property until the end of the contract.

Furthermore, usufruct agreements can be lucrative investments for both parties. The usufructuary can rent out the property and generate income, while the owner can receive a portion of the rental income or charge a higher fee for the right to use the property.


In conclusion, a usufruct agreement can be a practical solution for foreign investors seeking to own property in Thailand. It offers a secure and cost-effective way to enjoy the benefits of property ownership without the administrative burdens of outright ownership. If you are considering entering into a usufruct agreement, it is advisable to seek legal guidance to ensure that your rights and interests are protected.