THAILAND Law and Practice Contributed by: Olaf Duensing, Jerrold Kippen and Weeraya Kippen, Duensing Kippen, Ltd.
6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time The law recognises the following arrangements. • Lease (as further described in 6.2 Types of Com- mercial Leases , 6.3 Regulation of Rents or Lease Terms , 6.3 Regulation on Rents or Lease Terms and 6.4 Typical Terms of a Lease ). • Usufruct – this provides the right to possess, man - age and exploit a property. It can be either for the life of the grantee or a period of up to 30 years, with the possibility to renew it for up to another 30 years. The usufruct may also be transferred. However, the usufruct ends with the death of the original grantee. • Habitation – this is the right to occupy a building for either the life of the grantee or up to 30 years. Habitation can be renewed for up to 30 years. Hab - itation is not transferable. Unless otherwise prohib - ited, the grantee’s family may occupy the building with the grantee. • Superficies – this is a fully transferable right to own freehold title to a building on another person’s land. Superficies may either be granted for up to 30 years or for the life of the grantee. Superficies may also be renewed for another 30 years. Unless prohibited by the act creating it, a superficies is fully transferable by the grantee. • Sap-ing-sith – this is a new right over real estate by registration at the land office and issuance of a certificate that is similar to a lease. It is applicable only to land ownership (ie, chanote ) titles, buildings on such titles, and condominium units. The dura - tion cannot exceed 30 years. It allows the holder to use the real estate as outlined in its certificate. It is inheritable and transferable without the consent of the owner. Furthermore, it allows the holder to make additions and alterations to the real estate without the owner’s consent. The certificate holder can also mortgage their right. 6.2 Types of Commercial Leases All leases are governed by the CCC as a specific con - tract.
• a private limited company is managed by the direc - tors in accordance with the resolution of the share - holders, its articles of association and the CCC; • a public limited company (listed and not listed) is managed by the directors in accordance with the resolution of the shareholders, its articles of asso - ciation and the Public Limited Companies Act; • a limited partnership and registered partnership are managed by the managing partners in accordance with the decision of the partners and the CCC; • a property fund is managed by a management company under the supervision of the mutual fund supervisor in accordance with the approved mutual fund project and the commitment made to the unitholders; and • a REIT is managed by a REIT manager in accord - ance with the trust instrument, as permitted by the Securities and Exchange Commission. 5.6 Annual Entity Maintenance and Accounting Compliance Accounting costs usually depend on the type of entity and the amount of the transaction. A private company limited is required to prepare an audited balance sheet, file corporate income tax returns, as well as file its latest shareholder list yearly. Furthermore, it must maintain and update a register of shareholders. A public company limited is required to hold an annual general meeting, prepare an audited balance sheet, file corporate income tax returns and file its latest shareholder list yearly. Furthermore, it must main - tain and update a register of shareholders. It is also required to publish the balance sheet in a newspaper. Limited partnerships and registered ordinary partner - ships must prepare and submit annual financial state - ments. Property funds and REITs must comply with Securities and Exchange Commission regulations.
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