Bangkok: The Department of Business Development is intensifying efforts to curb the use of Thai nationals as fronts for foreign business operations.
According to Thai News Agency, the Department of Business Development, under the Ministry of Commerce, has announced a new operation aimed at cracking down on 'nominee' activities. This initiative introduces stringent measures to enhance transparency and fairness in business operations, targeting the practice of Thai nationals holding shares on behalf of foreigners to conceal their ownership. The directive will come into effect on April 1, 2026, but any attempts to bypass the regulation before this date will be met with rigorous investigation and prosecution.
Mr. Poonpong Naiyanapakorn, the Director-General of the Department, disclosed that Order No. 1/2026, issued on March 16, 2026, outlines the criteria for registering amendments that allow foreign participation in Thai businesses. This measure mandates written confirmation from managing partners or directors that all shareholders have genuinely invested in the company and are not acting as nominees for foreigners. This step follows an earlier order from January 1, 2026, which required bank statements from Thai shareholders in high-risk arrangements, reducing suspicious registrations by 65 percent. Despite this success, further circumventions led to the implementation of additional measures.
The Department will forward names of individuals who present risky behavior to the Central Investigation Bureau, Royal Thai Police, for thorough investigation. Providing false information to officials is a criminal offense in Thailand, punishable by imprisonment or fines under the Criminal Code and the Foreign Business Act. These new regulations are crucial for screening and mitigating the risk of using Thai nationals as proxies, thereby preventing foreign entities from unlawfully conducting business in Thailand.
Mr. Poonpong emphasized the longstanding issue of 'nominee' practices, citing that 118,016 limited companies have foreign shareholders with minority stakes, granting them Thai legal entity status. While some are genuine joint ventures, many exploit Thai nominees, undermining business competitiveness and the economy.
The new order aims to close legal loopholes, ensuring businesses operate within legal frameworks and promoting fair competition. This move is expected to bolster confidence among investors and the public, fostering opportunities that contribute to national growth.
Furthermore, before the order's commencement on April 1, 2026, the Department will scrutinize any irregular registrations, particularly in high-risk provinces like Chonburi, Chiang Mai, Surat Thani, Phuket, and Krabi. These areas frequently witness nominee-related activities. Mr. Poonpong affirmed that decisive action would be taken against all offenders.