Key facts
- Thai authorities are cracking down on foreign businesses using local nominees to circumvent ownership laws.
- The Foreign Business Act restricts foreign ownership to a maximum of 49% in many local companies.
- Thousands of companies are under scrutiny, with some foreign suspects referred to prosecutors.
- Confiscations of land and arrests of individuals linked to illegal nominee schemes have occurred.
Thai authorities are intensifying efforts to crack down on foreign-owned businesses that use local nominees to circumvent ownership restrictions, a move that has raised alarms amid growing foreign influence in sectors like agriculture and tourism.
Under Thailand's Foreign Business Act, non-citizens are generally prohibited from holding more than a 49 percent stake in local companies. To bypass this rule, some foreign entrepreneurs have been paying Thai citizens to act as nominees, falsely listing them as majority owners despite minimal or no actual involvement in the business. This practice has been prevalent for years, but authorities are now demanding proof that these listed local partners have genuine ownership stakes.
The government has identified approximately 50,000 foreign-linked companies for increased scrutiny, utilizing AI to cross-check databases and conducting widespread inspections, particularly in popular tourist areas. Legal firms report a significant increase in inquiries from concerned foreign businesses and property owners fearing asset seizure or criminal charges.
Prime Minister Anutin Charnvirakul has pledged to take strict action against illegal businesses and criminal organizations exploiting shell companies. Investigations have already led to the referral of 28 foreign suspects to prosecutors in provinces like Phuket and Surat Thani. In Koh Phangan, authorities confiscated 30 plots of land valued at around 150 million baht ($4.5 million) and arrested two Thai nationals linked to illegal companies.
The Commerce Ministry's Department of Business Development is categorizing investigations based on foreign shareholding structures, with a focus on nominee arrangements where foreign shareholders hold between 0.01 percent and 49.99 percent of shares. Out of roughly 980,000 registered legal entities, over 118,000 have foreign shareholders, and investigators have flagged about 53,000 as potentially risky, uncovering approximately 2,000 mule bank accounts.