Bangkok: Increased measures have been implemented to crack down on nominee businesses in Thailand, with a new order requiring verification of genuine investment evidence. The Department of Business Development has intensified its efforts to combat "nominee" ownership, mandating applicants to validate the genuine source of their investment funds. This initiative involves a thorough examination of financial records and shareholder structures to prevent the use of Thai nationals as nominees for foreigners. Five provinces have been designated as target areas for in-depth investigations. Previously, a rigorous inspection of tourism businesses in Chonburi province uncovered nominee practices, leading to the revocation of licenses for four companies.
According to Thai News Agency, Mr. Poonpong Naiyanapakorn, Director-General of the Department of Business Development, disclosed that on March 16, 2026, an order was issued concerning the criteria and procedures for registering amendments to allow foreigners to be partners or authorized directors in limited liability companies. This regulation requires applicants to provide written confirmation that shareholders or partners have genuinely invested and made payments, and that they have not engaged in business with foreigners in a nominee capacity. The measure will be effective from April 1, 2026 onwards.
This order builds upon previous measures implemented since January 1, 2026, which required high-risk businesses to provide financial documentation of Thai shareholders to verify genuine investments. This resulted in a 65% reduction in nominee registrations. However, attempts to circumvent these measures continue, necessitating this additional order to close legal loopholes.
The Director-General emphasized that for individuals confirmed to exhibit risky behavior, the department will forward all cases to the Central Investigation Bureau of the Royal Thai Police for further investigation. He warned that providing false information to officials is a violation of the Criminal Code and may also constitute an offense under the Foreign Business Act B.E. 2542 (1999), which carries penalties including imprisonment for up to 3 years and fines ranging from 100,000 to 1,000,000 baht.
According to data from the Department, there are currently 118,016 limited companies in which foreigners hold between 0.01% and 49.99% of the shares. While some are genuine joint ventures, a significant number involve using Thai nationals as nominees, impacting business competitiveness and the country's economic structure.
Mr. Poonpong reiterated that the Department will continue to inspect high-risk businesses in target areas, especially in provinces with high investment and tourism, to prevent exploitation of legal loopholes and to ensure fair competition in trade.