Between 2023 and 2025, more than 1,200 residential building permits were issued on Phuket alone, according to data from the Provincial Building Control Office. Over the same period, at least 14 condominium and villa projects recorded delays exceeding 12 months. For any investor committing capital from abroad, the central question is straightforward: how do you distinguish a credible developer from one that presents a genuine risk of capital loss?
Our analysts apply a standardised methodology built around 7 measurable criteria to every developer and project we assess. Below we walk through each criterion exactly as we apply it on the ground in Phuket and Koh Samui as of 2026.
Quick answer
- We actively monitor more than 80 projects in Phuket and more than 30 on Koh Samui as of Q1 2026
- Any prior-project delay exceeding 6 months triggers an immediate warning flag in our scoring system
- Payment schedules demanding more than 50% of the purchase price before the shell structure is completed are classified as elevated risk
- Thailand has no payment-protection mechanism for off-plan buyers - real protection rests on contract terms and the developer's financial health
- A complete assessment covers: track record, financing structure, construction quality, permits, contract clauses, company financials, and physical site inspection
- Independent legal review of a developer contract in Phuket costs approximately 25,000-50,000 THB (based on Q1 2026 market rates)
Options and scenarios
Criterion 1: Developer track record
We begin with a search of the Department of Business Development (DBD) registry, checking the company's registration date, registered capital, and shareholder structure. We then cross-reference the number of projects fully completed and handed over to buyers.
In our framework, at least two completed and delivered projects is the minimum acceptable threshold. A developer with only one completed project is not automatically disqualified, but the remaining six criteria must hold up under significantly closer scrutiny.
For every prior project, we measure actual delivery time against the originally declared timeline. A slip of up to 3 months sits within what we consider normal for the Thai construction market. A delay of 6 to 12 months is a warning signal. Any delay exceeding 12 months leads us to recommend suspending any investment decision until the causes are fully explained and documented.
Criterion 2: Construction financing structure
This is one of the most consequential criteria and, in practice, one of the hardest to verify. A developer can fund construction from three primary sources: a bank construction loan (project finance), buyer deposits, or own equity.
A project finance facility from a Thai commercial bank (Bangkok Bank, Kasikornbank, or SCB) functions as an indirect credibility signal - the lending institution has completed its own due diligence before committing funds. Based on our estimates, only 30 to 40% of villa projects on Phuket carry bank financing. The remainder relies primarily on incoming buyer payments, meaning investor capital is effectively funding construction in real time.
We ask developers directly about their financing structure and request supporting documentation. A refusal to disclose is recorded as a risk factor.
Criterion 3: Payment schedule structure
The standard off-plan payment schedule for a Phuket villa runs roughly as follows: 30% at contract signing, subsequent tranches linked to defined construction milestones (foundations, shell structure, roof, fit-out), and a final 5 to 10% at key handover. Payment structures on Koh Samui follow a broadly similar pattern.
We classify as aggressive any schedule in which the developer collects more than 50% of the purchase price before the closed shell structure (walls, roof, windows) is complete. Such projects are flagged amber in our tracking database. Schedules where more than 70% is due before the roof is finished receive a red classification.
A critical structural point: tranches should be tied to verified construction progress, not to calendar dates. The contract must specify that each subsequent payment is triggered only by written confirmation that the preceding milestone has been completed.
Criterion 4: Permits and legal documentation
We verify the following documents in person at the relevant local authority (Tessaban or Or Bor Tor):
- Chanote title deed - we check the plot number, any mortgage encumbrances, and consistency with the developer's representations
- Building permit (Ror. 1) - confirming it has been issued, the number of units it covers, and that it has not lapsed
- EIA (Environmental Impact Assessment) - required for buildings above 80 units or specific height thresholds; districts including Kamala, Surin, and Layan carry additional height and density restrictions
- Developer operating licence under the Condominium Act, where applicable
The absence of any of these documents at the point of off-plan sales launch is a serious warning. In our field work we have encountered projects in Bang Tao and Rawai where sales began before a building permit had been granted.
Criterion 5: Construction quality in completed projects
Our analysts conduct a physical inspection of at least one completed project by the same developer. We assess:
- Structural and finish condition 2 to 3 years after handover (cracks, water ingress, installation quality)
- Conformity of actual materials and finishes with the contractual specification
- Operational quality of property management (juristic person in condominiums, management company in villa developments)
- Owner feedback, collected without attribution
On Koh Samui, particularly in Bophut and Maenam, our data set shows wide variance in build quality - ranging from standards comparable with European mid-market to finishes requiring costly remediation within the first two years of occupancy.
Criterion 6: Buyer-protective contract provisions
We review every contract for the presence and enforceability of the following:
- Delay penalties - the market benchmark is 0.01 to 0.05% of contract value per day; the absence of any penalty clause is flagged immediately
- Termination right if delay exceeds a specified threshold, typically 90 to 180 days
- Material specification schedule - the contract should include a detailed list of brands and finish standards, not vague descriptors
- Snagging procedure - a clearly defined pre-handover inspection process with the buyer's right to log defects and require remediation before final payment
Our standing recommendation is that any contract be reviewed by an independent Thai property law specialist before signing. Based on Q1 2026 data, that review costs 25,000 to 50,000 THB.
Criterion 7: Company financials and balance sheet
Annual financial statements of Thai companies are publicly available through the DBD database for a fee of approximately 500 THB. We examine:
- Whether the company carries positive net equity
- The ratio of liabilities to total assets
- Absence of outstanding tax liabilities (verifiable with the Revenue Department)
- Capital linkages to other entities under the same beneficial ownership
A company showing negative equity, or one incorporated fewer than 12 months before the sales launch of a project, warrants a materially higher level of scrutiny before any investment decision.
Comparison table
| Criterion | Low Risk | Moderate Risk | High Risk |
|---|---|---|---|
| Completed projects | 3 or more, delivered on schedule | 1-2 projects, slip up to 6 months | No completed projects on record |
| Construction financing | Bank project finance in place | Own equity plus buyer deposits | Buyer deposits only |
| Payments before shell complete | Below 40% of purchase price | 40-50% of purchase price | Above 50% of purchase price |
| Building permit status | Issued before sales launch | Application in progress, documented | Not obtained or disclosure refused |
| Delay penalty clause | 0.05% per day or above | 0.01-0.04% per day | No penalty clause present |
| Developer company age | Over 5 years registered | 2-5 years registered | Under 12 months registered |
| Balance sheet position | Positive equity, low leverage | Positive equity, moderate debt | Negative equity |
Risks and mistakes
Mistake 1: Relying on marketing materials instead of source documents. Architectural renders, polished websites, and professional sales presentations are not substitutes for verified permits and audited financials. We have encountered projects with marketing budgets exceeding 10 million THB that had not yet obtained a building permit at the point of sale.
Mistake 2: Assuming buyer deposits carry the same protections as in regulated Western markets. Thailand has no statutory mechanism protecting off-plan buyer payments. Funds paid to a developer go directly into the developer's operating account. The practical protections available to a buyer are the financial solidity of the developer, the contractual provisions negotiated upfront, and the linkage of payment tranches to verified construction milestones.
Mistake 3: Underestimating currency exposure. A buyer paying in Thai Baht from a foreign currency account faces real exchange-rate risk. The THB/USD rate moved within a range that translated to meaningful differences in acquisition cost between 2023 and 2025. On a villa priced at 15 million THB, even a modest rate movement can represent a material variance in the effective purchase price when converted back to the buyer's home currency.
Mistake 4: Skipping physical site inspection. We monitor construction progress on the ground, photograph, and document the state of work at regular intervals. An investor who neither visits the site nor commissions independent progress monitoring surrenders the most effective oversight tool available.
Mistake 5: Signing without independent legal review. Standard developer contracts in Phuket and Koh Samui are drafted to protect the developer's interests. Without independent legal analysis, a buyer may overlook the absence of penalty clauses, vague material specifications, or one-sided termination provisions.
FAQ
Does Thailand offer any statutory payment protection for off-plan property buyers?
No. Thailand has no mechanism comparable to a buyer-protection trust account for foreign off-plan purchasers. Payments go directly to the developer. Protection rests on contract terms, milestone-linked payment tranches, and the developer's underlying financial health.
What does independent legal review of a developer contract cost in Phuket?
Based on our Q1 2026 data, a contract review by an independent Thai property law firm in Phuket costs 25,000 to 50,000 THB. A more comprehensive due diligence package covering title deed verification and permit checks typically runs 50,000 to 100,000 THB.
How do we verify a developer's track record in Thailand?
The DBD registry provides registration data and financial filings for Thai companies at a cost of approximately 500 THB per document set. We supplement that with physical inspection of completed projects and verification of occupancy permit dates at the relevant Land Office or local authority.
What payment schedule for an off-plan Phuket villa is considered acceptable?
In our assessment, a schedule is acceptable when cumulative payments before shell-structure completion remain below 40% of the purchase price, with the final tranche of 5 to 10% due only after a satisfactory pre-handover inspection and key transfer.
Is a developer required to hold a building permit before launching sales in Thailand?
Thai law requires a building permit (Ror. 1) before construction begins, but does not formally prohibit sales contracts before the permit is issued. In our methodology, sales launched without a permit in hand are treated as a material warning flag regardless of legal technicality.
What level of construction delay is within normal range on the Thai market?
Across the projects we monitor on Phuket and Koh Samui, a delay of up to 3 months falls within the typical market range. A slip of 3 to 6 months warrants a formal explanation from the developer. Any delay exceeding 6 months triggers a detailed review of the developer's financial position and site progress.
Is a professional snagging inspection worth commissioning for a Phuket villa handover?
Based on our field experience, yes. The cost of a professional pre-handover snagging inspection for a villa on Phuket runs approximately 15,000 to 30,000 THB as of 2026. The inspector verifies conformity with the contractual specification and checks electrical, plumbing, and finish standards before the final payment is released.
How can we confirm whether a developer has bank financing in place for a project?
Any mortgage registered against the land in favour of a bank is recorded on the reverse of the Chanote title deed and can be inspected at the Land Office. We also ask developers directly about their financing structure. Developers with legitimate bank facilities are, in our experience, generally willing to confirm that arrangement.
Researching property in Phuket or Koh Samui? Get in touch - our analysts will prepare a data brief for your shortlisted location.