Executive Summary
Over the last 24 months, Thailand has upgraded the fight against so-called nominee structures from a selective corporate-law issue into a cross-agency priority of economic, security, and criminal policy. At the center is the situation in which foreign investors formally place Thai shareholders, directors, or front companies in between in order to circumvent activity prohibitions or licensing requirements under the Foreign Business Act B.E. 2542 (1999). The most recent enforcement wave combines company-registry checks, criminal investigations, land-law and tourism-law reviews, money-flow analyses, and the fight against legal-entity “mule accounts.”
Enforcement has developed in stages. First visible was the cooperation between the Department of Business Development and the police in November 2024, then the three-stage anti-nominee plan, the sectoral focus on six high-risk industries in April 2025, the high-profile proceedings in Phuket and against China Railway No. 10 (Thailand), and finally the shift of control upstream into the company-registration process since April 2026. On 29 April 2026, cooperation was expanded to 23 authorities and institutions, including the police, DSI, AMLO, the Revenue Department, the Department of Lands, the Bank of Thailand, BOI, SEC, and SET.
Legally, the core remains classic: the key provisions are above all the definition of “foreigner” in Section 4 FBA, the list system under Section 8, the lawful entry routes under Section 12 and other special laws, as well as the penal provisions in Sections 36, 37, and 41 FBA. What is new is less the legal offence itself than the combination of big-data screening, registry barriers, asset and money-flow checks, and the political will to treat nominee matters as an economic-crime and governance problem. Cabinet and Ombudsman/NACC-related documents additionally push for higher penalties and inclusion in the anti-money-laundering regime.
For foreign investors, the central conclusion is this: illegal proxy structures have become significantly riskier. At the same time, for law-abiding investors, the development can be positive because Thailand is expressly pursuing lawful market openings, BOI routes, digital procedures, and the partial removal of duplicated licensing requirements in parallel. Thailand’s Ministry of Commerce itself describes this dual strategy as “facilitating good investors while seriously combating bad actors.”
Scope of Review and Key Findings
This article examines the period from 16 June 2024 to 16 June 2026. Priority was given to official publications by the Thai government, the Department of Business Development, the Ministry of Commerce, the Department of Special Investigation, the Board of Investment, as well as publicly available court-adjacent reports, leading Thai media reports, and academic literature. Where case numbers, exact decision dates, or full texts of individual court decisions were not publicly apparent in the consulted sources, this is expressly stated as not specified.
In the recent Thai debate, “nominee” does not refer only to the classic Thai straw shareholder. The literature and recent investigation cases show a broader spectrum of circumvention models: dummy shareholders, management or control agreements, side financial arrangements, cross-border holding structures, multiple companies using the same address, and professional service providers that supply shareholders and directors in series. This breadth explains why the authorities today no longer look only at the formal 49/51 share split, but also at source of capital, actual control, multiple appointments, and money flows.
From an academic perspective, this is not surprising. Earlier research had already criticized Thailand’s definition of foreigners as being too strongly tied to formal shareholdings and the criteria for prohibited nominee arrangements as too unclear. More recent contributions therefore recommend a stronger focus on actual control, clarification of land law, and centralized, technology-supported inter-agency systems. The government is now visibly taking up these recommendations, especially through IBAS/big-data concepts and tighter registration rules.
Legal Framework and Sanctions Architecture
The Foreign Business Act remains the core regime. Under Section 4, a “foreigner” includes not only a non-Thai natural person or a legal entity registered abroad, but also a company registered in Thailand where at least half of the capital shares or capital financing is foreign in nature. Section 8 divides protected activities into three lists: List 1 is generally prohibited to foreigners; List 2 is accessible only with ministerial permission and Cabinet approval; List 3 covers activities in which Thais are deemed by the legislature not yet to be fully competitive and which therefore require permission from the Director-General with the approval of the Commission. In addition, Section 12 opens lawful routes for foreign activities promoted by the BOI or covered by other special laws.
For nominee matters, Section 36 FBA is central. It covers Thai persons or non-foreign legal entities that, through support, participation, sham cooperation, or shareholding as nominees, enable foreigners to carry out protected activities in circumvention of the law. Section 37 FBA mirrors this by sanctioning the foreigner who conducts business without the required permission. Section 41 FBA extends liability to directors, partners, or authorized representatives of legal entities if they tolerate offences or fail to prevent them appropriately. The Act also allows court orders to terminate business operations, participation, or shareholding structures, as well as daily coercive fines for non-compliance.
Enforcement now reaches beyond the FBA, however. In tourism, the Tourism Business and Tourist Guide Act and its licensing regime play an important role because many recent cases involve zero-dollar tours, foreign-dominated travel companies, connected hotel and souvenir chains, or illegal guides. In the land and real-estate sector, the debate increasingly touches the Land Code regime, under which foreigners may acquire land only in narrow exceptions. Official-adjacent and academic sources therefore emphasize that nominee structures are relevant not only under corporate law, but also under land and tourism law. In addition, there is a clear political reform direction: according to government and Cabinet documents, violations under Sections 36 and 37 FBA are to be treated in the future as predicate offences under anti-money-laundering law and sanctioned more severely.
Comparison of Key Sanctions
| Legal basis | Offence | Basic penalty | Additional consequences |
|---|---|---|---|
| FBA Section 36 | Nominee holding, assistance, sham cooperation, proxy shareholding | Imprisonment of up to 3 years or a fine of 100,000–1,000,000 THB, or both | Court may order the termination of the assistance, cooperation, participation, or shareholding structure |
| FBA Section 37 | Foreign business operation without required permission | Imprisonment of up to 3 years or a fine of 100,000–1,000,000 THB, or both | Court may order the termination of the business operation, undertaking, or participation |
| FBA Section 41 | Officer liability in legal entities | Imprisonment of up to 3 years or a fine of 100,000–1,000,000 THB, or both | Personal liability of directors/authorized representatives |
| FBA Sections 36/37 in case of non-compliance with a court order | Continued violation after a court order | 10,000–50,000 THB per day | Runs until the violation is terminated |
| Tourism Business and Tourist Guide Act | Licensing and tourism-law violations | Depends on the offence | Administrative, licensing, and follow-on proceedings possible |
*Source basis of the table: official legal text in translation via BOI and original and translated versions of tourism law. *
Registration and Gatekeeper Measures
The registration level is particularly consequential. Since 1 January 2026, companies classified as risky have had to submit additional financial documents. With Order No. 1/2569 of the Central Partnership and Company Registrar dated 16 March 2026, effective from 1 April 2026, an Investment Confirmation Letter was additionally introduced. Under this requirement, managing partners or authorized directors must confirm that all shareholders or partners have actually invested and paid and are not acting as nominees for foreigners. In parallel, the DBD had already announced in 2025 that persons connected to nominee matters would no longer be accepted as accountants. Thailand’s enforcement is therefore shifting from subsequent criminal proceedings increasingly toward preventive registration and gatekeeper control.
Timeline of the Last 24 Months
The development should not be read as a single “raid,” but as a gradual escalation. An early publicly visible signal was the Phuket real-estate case: Thai PBS reported on 21 October 2024 that the Criminal Court had convicted 23 persons and legal entities in relation to nominee-like structures. According to the consulted public reports, the court imposed fines of 200,000 THB each, two-year suspended prison sentences, one year of probation supervision, and ordered the dissolution/deregistration of the companies. However, the reports accessible in the consulted sources do not specify a case number.
Institutionally, the tightening began on 4 November 2024 with cooperation between the DBD and the CIB to combat nominee structures and legal-entity mule accounts. As early as 27 November 2024, a second meeting of the anti-nominee authorities followed with a three-stage plan; at the same time, the Bangkok Post reported on a 21-month campaign that was to begin in September 2024. The issue had thus moved from individual-case handling into a strategic government architecture.
The year 2025 brought sectoral sharpening. On 23 March 2025, the DBD set up a special working group against unlawful foreign businesses and nominee structures. On 23 April 2025, an inspection plan for six high-risk sectors was published: tourism-related businesses, land/real estate, e-commerce, transport and warehousing, hotels/resorts, agriculture-related activities, and general construction services. The DBD and/or Thai PBS put the target group at 46,918 companies; for the period from 1 September 2024 to 31 March 2025, 852 cases with estimated damage of 15.188 billion THB were reported.
Another accelerator was the affair involving China Railway No. 10 (Thailand) following the collapse of the Auditor-General building in March 2025. Reuters reported earlier warning signs relating to construction execution and material standards. In parallel, Thai PBS, the Bangkok Post, and the DSI turned the matter into a highly visible nominee and FBA case: in early April 2025, the DSI spoke of suspected proxy shareholders; in June 2025, the company, a Chinese director, and three Thais were brought before the court for illegal foreign business operations. The case was politically consequential because it expanded the debate beyond local tourism and real-estate cases into a national infrastructure and governance issue.
In 2026, selective enforcement became systematic steering. On 29 January 2026, the Ministry of Commerce held a major consultation with embassies, foreign chambers of commerce, and investors. There, the minister announced both an investment-facilitation program and a hard line against nominee businesses. Cabinet and Ombudsman/NACC-related documents dated 17 March 2026 then expressly called for a three-phase approach: short-term controls in six target sectors, in the medium term an Intelligence Business Analytics System (IBAS), and in the long term an amendment to the FBA and anti-money-laundering law.
The next leap came with the registration measures in spring 2026. According to government and media information, the number of company formations classified as nominee risks fell in the first quarter of 2026 to 1,373, i.e. by 60% compared with the same period of the previous year; between 1 and 23 April 2026, only 175 risky cases were reportedly identified, a decline of 75%. Finally, on 29 April 2026, 23 authorities and institutions signed a cooperation agreement at Government House to link company-registration, banking, tax, land, immigration, and investigation data more closely.
In May and June 2026, the operation expanded across the country. On 10 April 2026, the DSI forwarded a Pattaya entertainment case involving nine accused persons to the public prosecutor, arrested a Chinese suspect in a wood-processing case on 26 January 2026, and a Singaporean suspect in a Samui case on 6 May 2026. On Koh Phangan and Koh Samui, according to Thai PBS and Matichon, companies, accounting offices, real-estate projects, and land titles were checked; the matters involved hundreds of seized company documents, numerous company seals, dozens of plots of land, and the alleged use of Thais as shareholders in up to hundreds of companies. On 13 June 2026, the government also reported that the number of legal-entity mule accounts had fallen from 549 cases in 2025 to 19 cases in the first five months of 2026.
Timeline of Key Moments
| Date | Event | Significance |
|---|---|---|
| 21 Oct 2024 | Phuket judgment against 23 accused persons in a real-estate case | Early criminal-law signal against nominee-like structures |
| 4 Nov 2024 | DBD–CIB MOU | Start of systematic data and police cooperation |
| 27 Nov 2024 | Three-phase plan / 21-month campaign | Strategic consolidation of anti-nominee policy |
| 23 Mar 2025 | DBD special working group | Operational bundling of enforcement |
| 23 Apr 2025 | Six-sector risk plan | Risk-based mass review of 46,918 target companies |
| Apr–Jun 2025 | China Railway No. 10 case | National politicization of the issue beyond the tourism sector |
| 29 Jan 2026 | MOC consultation with embassies/chambers | Dual line of liberalization and repression |
| 1 Apr 2026 | Order No. 1/2569 takes effect | Control shifted upstream into the company registry |
| 10 Apr 2026 | Pattaya case sent to public prosecutor | Tightening in the tourism/entertainment sector |
| 29 Apr 2026 | 23-agency MOU | Nominee enforcement becomes inter-agency economic-crime policy |
| May 2026 | Koh Phangan / Samui / Pattaya / coconut cases rolled out | Linkage of company, land, and financial investigations |
| 13 Jun 2026 | Decline in legal-entity mule accounts reported | Government claims visible preventive effect |
*Source basis of the table: DBD, Thai PBS, DSI, government, and quality media reports. *
*The timeline condenses the official and journalistic key dates explained in the preceding section. *
Typical Structures, Target Sectors, and Impact on Market Participants
The latest cases show that Thai authorities are now looking for several recurring models. First, there is the classic Thai straw shareholder, who formally holds the majority but cannot prove any real financing or entrepreneurial role. Second, accounting and consulting firms appear as infrastructure providers that supply directors, shareholders, company addresses, or company shells in series. Third, cross-shareholding or circular structures are used to simulate nominal Thai control, even though economic direction and benefit remain entirely foreign. Fourth, the authorities increasingly regard integrated value chains, for example in tourism, real estate, or agricultural trade, as a risk signal. Fifth, financial instruments, management arrangements, and multi-level structures play an important role, which is also expressly emphasized by the academic literature.
The empirical priority sectors largely correspond to these typologies. Officially, since April 2025 the DBD has prioritized six areas: tourism-related businesses, land and real estate, e-commerce, transport and warehousing, hotels/resorts, agriculture-related businesses, and general construction services. The literature particularly names retail, real estate, and tourism; the more recent cases expand the picture to include entertainment venues, wood processing, and agricultural/export networks such as the coconut sector.
Enforcement on Koh Phangan and Koh Samui is especially illustrative. Thai PBS reported accounting structures in which individual names appeared in dozens of companies; in one Samui example, one person was even recorded as a shareholder in 87 companies. On Koh Phangan, according to media reports, target properties were searched, company documents and seals were seized, and dozens of plots of land with suspected nominee links were reviewed. In practice, the authorities are therefore no longer targeting only individual companies, but service providers, networks, and infrastructure nodes that make the proxy economy possible in the first place.
The government describes the economic effects in four dimensions. First, there is unfair competition because illegal structures circumvent licensing and ownership restrictions. Second, the risk of tax losses, money laundering, and economic-crime networks increases. Third, sensitive markets — from island real estate to coconut export chains — come under de facto foreign control. Fourth, trust in and profitability of legitimate Thai businesses suffer. In the coconut sector, for example, Thai PBS and the Bangkok Post explicitly linked alleged nominee networks to market distortions and pressure on producer prices.
For foreign investors, however, the situation is ambivalent. On the one hand, official statistics show that Thailand expressly permits lawful foreign investment: according to the DBD, in 2025 a total of 1,078 foreign companies received a lawful approval or certificate under the FBA regime; according to the BOI, investment applications reached 1,876,653 million THB. On the other hand, informal or merely formally “Thai-ized” market entry is becoming significantly riskier. The MOC therefore simultaneously emphasizes investment facilitation, e-Foreign-Business procedures, and the possible removal of activities already regulated elsewhere from the FBA list in order to offer legal investors a clearer path.
*The flowchart abstracts the patterns and investigative sequences repeatedly described in official and journalistic sources. *
Compliance and Risk Mitigation
Recent Thai practice now provides fairly clear compliance lessons. First, economic control and formal structure must be consistent. Anyone wishing to invest in List 2 or List 3 activities should determine and document the lawful entry route — such as an FBL, BOI promotion, treaty-based rights, or another special law — at an early stage. The authorities expressly accept lawful foreign investment; however, they are increasingly acting against structures in which Thai shareholders numerically dominate, while capital, voting power, or management control effectively lies with foreigners.
Second, documentation of capital and source of funds is now decisive. The investment confirmation introduced in 2026 makes visible what the registry focuses on: real payment, traceable financing source, no sham participation, and no proxy assistance. In practice, this means payment records, clean shareholder documentation, review of loans and side letters, disclosure of the beneficial owner, avoidance of “helpful” shelf-company or nominee service providers, and a clear separation between corporate secretary/accounting services and concealed representation of interests.
Third, tourism, land, and agricultural sectors deserve heightened caution. Foreign investors should not use Thai front persons for land, hotel, or villa holdings and should conduct tourism-related activities only with the relevant licenses, work permits, and immigration status. The same applies to agricultural export chains: if foreign control over leasing, purchasing, processing, and export effectively encloses the market, not only the FBA risk but also political visibility rises. The cases on Koh Phangan, Samui, and in the coconut sector show that exactly these matters are now being prioritized.
Recommended Compliance Steps
| Risk area | Recommended measure | Practical evidence |
|---|---|---|
| Market entry | Clarify lawful route before structuring | FBL/BOI/treaty memo, licensing matrix |
| Shareholder structure | Ensure genuine economic participation by all Thai shareholders | Payment records, asset evidence, shareholder declarations |
| Registry procedure | Anticipate new registration requirements | Investment Confirmation Letter, corporate secretary checklist |
| Beneficial ownership | Disclose and internally document material control | UBO chart, side-letter review, board minutes |
| Third-party service providers | Do not use shelf-company/nominee/front services | Enhanced due diligence on law firm/accountant/corporate service provider |
| Tourism | Check sector-specific licenses and work permits | License register, deployment plans, work permits |
| Land/real estate | No front holdings; use only legal alternatives | Lease/usufruct/condo structure, land due diligence |
| Tax/anti-money laundering | Continuously monitor payment flows and related-party transactions | Source-of-funds documentation, AML red-flag review |
| Crisis response | Early internal investigation and self-remediation | Investigation protocol, documented remedial measures |
*The table condenses current regulatory signals from the FBA, registry practice, government documents, and enforcement cases. *
Assessment, Open Questions, and Likely Development
From an economic-policy perspective, Thailand is currently pursuing a clear dual course. On the one hand, the government wants to make the country more attractive as a regional investment location — through BOI promotion, digitalized procedures, faster FBA processing, and the reduction of duplicated regulation in certain activities. On the other hand, proxy structures, grey capital, and economic-crime networks are to be combated more sharply. This policy is consistent with the aim of increasing lawful FDI flows without opening protected sectors to concealed control.
Several points remain open, however. First, the timetable for a genuine FBA amendment remains unclear. As long as the definition of foreigners is strongly tied to shareholdings and capital, capturing complex control structures remains practically challenging. Second, the announced AML linkage of FBA offences has been politically mapped out but not yet completed. Third, the transparency of court decisions remains limited: in key cases, media and authority reports are available, but full judgments or case numbers are not always available. Fourth, it is not finally clear how far Thailand will in future actually move beyond formal shareholding review toward a substantive control analysis.
Despite these uncertainties, the available signals clearly point to further tightening over the next 12 to 24 months. More big-data and registry screenings are likely, as is stronger linkage between corporate and financial supervision, additional proceedings in tourism, real-estate, agricultural, and service sectors, and stricter expectations toward accountants, corporate-service providers, and other gatekeepers. At the same time, Thailand is likely to try to make the path easier for lawful investors in order to draw the boundary between legal market entry and illegal circumvention even more clearly, politically and practically. This simultaneity — repression against proxy structures, but facilitation of lawful investment — is the defining feature of Thailand’s current course.
Literature and Sources
Official and government-adjacent sources
- Board of Investment Thailand. Foreign Business Act, B.E. 2542 (1999), official translation.
- Board of Investment Thailand. Thailand’s Investment Applications Reach New Highs in 2025, Fueled by Digital and Advanced Industries, 26 January 2026.
- Department of Business Development. Annual Report 2568: Foreign Business Operations under the Foreign Business Act B.E. 2542.
- Department of Business Development. Press and information releases dated 4 November 2024, 27 November 2024, 23 March 2025, 23 April 2025, 24 March 2026, 26 April 2026, 8 May 2026, and 8 June 2026.
- Department of Special Investigation. Press releases dated 26 January 2026, 10 April 2026, and 6 May 2026.
- Ministry of Commerce. Shaping the Future of Foreign Business Facilitation in Thailand, 29 January 2026.
- Royal Thai Government. Notices dated 29 April 2026 and 13 June 2026.
- Government/Cabinet document dated 17 March 2026 on Ombudsman/NACC-related recommendations in the field of tourism, nominee structures, IBAS, and AML reform.
Court-adjacent and journalistic sources
- Thai PBS. ฟัน 23 “นอมินี” อสังหาฯภูเก็ต ศาลอาญาสั่งปรับ 2 แสน คุก 2 ปี, 21 October 2024.
- Thai PBS. ปรับแผนล่า “นอมินี” เน้น 6 กลุ่มเสี่ยงสูงทุนเทาฮุบธุรกิจไทย, 23 April 2025.
- Thai PBS. Reports dated 1 April, 19 April, and 22 April 2025 on China Railway No. 10 (Thailand).
- Reuters. Thai watchdog had flagged concerns on building that collapsed in earthquake, 31 March 2025.
- Bangkok Post. Reports dated 2 April 2025, 5 June 2025, 7 July 2025, 12 March 2026, and 14 May 2026.
- The Nation. Reports dated 17 April, 25 April, 29 April, 7 May, and 13 May 2026.
- Matichon. Reports dated 24 April, 26 April, and 15 May 2026.
Academic literature and professional articles
- Saypan, Supasit. Legal Problems Concerning Nominee Arrangement in Relation to Foreign Business under Thai Laws. Thammasat Business Law Journal, 2020.
- Phromphan, Surachai. Nominee Companies or Shell Companies in Thailand: Solutions and Future Directions. Journal of Thai Ombudsman, 2025.
- Preventing and Suppressing Nominees is an Act to Consider Concealed Transactions the Land for Foreigners in Thailand. Interdisciplinary Academic and Research Journal, 2025.
- Methiphanidchayakul, Thanathas. The Problems and Obstacles in Investigating Criminal Offenses under Foreign Business Act B.E. 2542 Committed by Chinese Businessmen. Journal of Roi Kaensarn Academi, 2023.
- Tilleke & Gibbins. Nominee Trap: Legal Risks and Licensing under Thailand’s Foreign Business Act, 2026.
