Nominee Companies in Thailand: 2026 Crackdown

For years, the nominee structure was presented as a “practical” way around Thailand’s Foreign Business Act. A foreigner who wanted to control a company without the constraints of the Act placed 51% of the shares with Thai nationals on paper, who had no real economic stake. The practice was long tolerated in practice, even though it has always been illegal. That time is over. Since 2024, Thailand has been running one of the most aggressive enforcement campaigns in its history against these structures. Here is where things stand in 2026.

Last updated: October 2026

What is a nominee structure?

A nominee structure registers Thai nationals as the majority shareholders of a company, while these people:

have not invested any real money in the company
have no real economic interest in the business
play no management role and have no real control
hold their shares on behalf of a foreigner, who is the real owner

The aim is to make the company look Thai (less than 50% foreign capital) to escape the restrictions of the Foreign Business Act B.E. 2542 (1999), while the foreigner keeps real economic control.

This is explicitly illegal under Section 36 of the Foreign Business Act, and has been since the Act came into force. What has changed is enforcement. For the general framework, see our article on Thailand’s Foreign Business Act.

Why did the practice spread?

In the 2000s and 2010s, enforcement of the Foreign Business Act was occasional and focused on a few exposed sectors and locations, such as tourism and coastal property. Most nominee structures operated without trouble, and the people who set them up often described the risks as theoretical.

Several factors helped them spread:

no central tool to check who really stood behind shareholders
few actual prosecutions
foreign clients who wanted to set up quickly, without going through BOI promotion or a Foreign Business License
networks offering Thai nominee shareholders as a service

That era is over.

An unprecedented enforcement campaign

The Department of Business Development (DBD) stepped up its checks in 2023 and 2024, first in tourism, property and hotels, in provinces such as Bangkok, Chiang Mai, Chon Buri, Phuket and Surat Thani. The Department of Special Investigation (DSI), the police and the Anti-Money Laundering Office (AMLO) have joined the effort.

The landmark Phuket case

The most significant case is a judgment of the Criminal Court of 11 September 2024 (Red Case No. A.2812/2567), following an investigation by the DSI into nominee arrangements, mainly in Phuket’s property sector. The court convicted 23 individuals and more than 60 companies. Each individual received a ten-year prison sentence, halved and suspended for two years because they confessed and had clean records, and a fine of 200,000 baht. The companies were ordered to be dissolved, with a daily fine of 10,000 baht for non-compliance.

The case shows that courts look at the economic reality of control, not the formal split of the shares.

The figures for 2024 to 2026

May 2024, Phuket: 231 suspects arrested, 135 individuals and 96 companies, with more than 1.5 billion baht of assets seized (bank accounts, condominium units, land).
May 2025: the Ministry of Commerce reported legal action against 857 nominee businesses, with damage estimated at 15.3 billion baht, and flagged 46,918 companies as high-risk for investigation by provincial task forces.
October 2025: police and provincial authorities launched joint inspections on Koh Samui and Koh Phangan, cross-checking DBD, land office and financial data.
March 2026: the DBD identified 15 fruit-packing companies suspected of using Thai nominees, 11 of them in Ratchaburi province, and referred them to the police, the DSI and AMLO.
May 2026: the authorities identified about 53,000 potentially risky corporate links and 6,551 foreign-majority companies for in-depth investigation. Bangkok, Chon Buri, Samut Prakan and Rayong top the list of suspected illegal foreign-controlled businesses.
June 2026: in a third phase of operations in Phuket, Phang Nga and Krabi, police seized 89 plots of land worth about 1.05 billion baht.

According to the DBD, of about 118,000 Thai companies with foreign shareholding between 0.01% and 49.99%, officials believe a large share may involve nominee shareholders. These are the companies now being examined.

New tools and new rules

Cross-checking data between agencies

A sub-committee on preventing nominee businesses brings together the DBD, the Immigration Bureau, the Department of Employment, the Land Department, the Revenue Department and AMLO. The DBD is also developing an analytics system, the Intelligence Business Analytics System (IBAS), to flag suspicious structures. Investigators now cross-check registration data with bank statements, tax records and land records over several years.

The warning signs these checks look for include:

Thai individuals holding shares in many companies at the same time
Thai shareholders whose investment does not match their financial capacity
money flows showing that the foreigner funded the Thai shares
bank accounts used as “mule” accounts

Stricter registration rules

Since 1 July 2026, company incorporations must go through the DBD’s online platform, DBD Biz Regist, and the DBD expects to extend this to all company registrations from 1 November 2026. In parallel, the DBD has tightened the documents required. Since 1 August 2026, DBD Order No. 2/2569 requires Thai shareholders of companies with less than 50% foreign shareholding, or with a foreign authorised director, to provide three months of bank statements proving they genuinely paid for their shares, together with an investment explanation letter. See our article on opening a business bank account in Thailand.

The warning signs investigators look for

Thai shareholders without financial means: people of modest means registered as holding 51% of a company worth several million baht
Circular funding: the foreigner lends money to the Thai shareholders so they can “buy” their shares, and the bank transfers can be traced
No operational role: the Thai shareholders attend no meetings, cannot explain the business and have no function in it
One-sided profits: the Thai shareholders never receive dividends, while profits go to the foreigner as “service fees”
Pre-signed share transfers: documents preparing a future transfer of the shares to the foreigner, blank signed forms, side letters
General powers of attorney: the foreigner holds unlimited powers covering all company decisions
Repeat shareholders: the same Thai person registered in many different companies, sometimes employees or relatives of the foreign operator

The most targeted sectors

The authorities focus on the sectors that have historically used nominee structures the most:

Property and land: villas, land, development projects, the most exposed sector because foreigners cannot own land
Hotels and tourism: hotels, resorts, travel agencies, tourist activities
Restaurants
E-commerce, logistics and warehousing
Construction
Agriculture and food: fruit packing, processing, farming
Trade: wholesale, jewellery retail, machinery and textile trading

Penalties

The penalties under the Foreign Business Act apply to both sides, the foreigner and the Thai nominee:

imprisonment of up to three years, a fine of 100,000 to 1,000,000 baht, or both
a court order to stop the business or the shareholding, with a daily fine of 10,000 to 50,000 baht for as long as the breach continues
for companies, a court-ordered dissolution, as in the Phuket case
personal liability for the people managing a company involved in the offence

Other laws can add to these penalties: the Land Code for land held through nominees, the Immigration and work permit rules, and, where money flows are involved, the anti-money laundering law. A draft amendment to the Anti-Money Laundering Act, put to public consultation in 2025, would make nominee arrangements a predicate offence for money laundering, with wider asset seizure powers. Check its status before relying on it.

Legitimate structures that can look like nominee structures

A nominee structure must not be confused with a genuine joint venture. A Thai company with a Thai shareholder of substance is legal, as long as:

the Thai shareholder genuinely paid for their shares, with traceable funds that do not come from the foreigner
the Thai shareholder plays a real role in the governance of the company
dividends are actually paid in proportion to the shareholding
the Thai shareholder can explain the business and their investment

Preference shares that give a foreign minority shareholder more weight in decisions remain a grey area. They are allowed under Thai company law, but they are examined more and more closely by the DBD, and courts can treat the structure as a nominee arrangement if they give the foreigner full control.

What to do if you are in an existing nominee structure

If you have set up or take part in a nominee structure, the question is no longer “am I at risk?” but “how long before I am checked?”. Getting out of it safely is a project in its own right, which usually follows five steps.

Step 1: Audit the current structure

Before choosing a solution, you need an honest picture of the situation, as the authorities would see it:

who holds the shares, and how each Thai shareholder actually paid for them (bank records, origin of the funds)
any loans, guarantees or transfers from the foreigner to the Thai shareholders
side documents: pre-signed share transfers, blank signed forms, side letters, option agreements
powers of attorney, preference shares and special voting rights in the articles of association
dividends actually paid, and how profits leave the company (management fees, loans, salaries)
assets held by the company, especially land and buildings
the company’s real activity, compared with the Foreign Business Act lists

This audit shows how exposed the structure is and which routes are realistic.

Step 2: Choose the legal route for your activity

The right solution depends first on what the company actually does:

Activity outside the FBA lists, such as manufacturing: the foreigner can generally hold the shares directly, without a licence. The nominee shareholders can be bought out and the company becomes openly foreign-owned.
Activity eligible for BOI promotion: this is the most solid route, with full foreign ownership, easier work permits and tax incentives. See our complete guide to BOI promotion.
List Three activity not eligible for BOI: apply for a Foreign Business License, or a certificate under a treaty such as the US Treaty of Amity if the investor qualifies. See our article on Thailand’s Foreign Business Act.
Genuine joint venture: replace the nominee shareholders with a Thai partner of substance who really invests, takes part in governance and receives dividends.
List One activity, or no legal route available: the only safe exit is to sell the business to an eligible buyer or dissolve the company.

Step 3: Deal with land and property first

This is often the blocking point for villas, hotels and property businesses. Under Section 97 of the Land Code, a company is treated as foreign for land ownership when foreigners hold more than 49% of its registered capital or make up more than half of its shareholders. A Thai company that owns land and then becomes foreign in this sense must dispose of the land within a period set by the Director-General of the Land Department, between 180 days and one year. If it does not, the Land Department can sell the land itself, and the company can be fined.

In practice, before any change of shareholding, the land must be dealt with: sale to an eligible buyer, sometimes combined with a registered lease (generally limited to 30 years) to keep using it, or a land permission under BOI promotion or in an IEAT industrial estate for projects that qualify. Land Offices can also check the source of Thai shareholders’ funds when a company with foreign shareholders holds land.

Step 4: Plan the transfer of shares

Buying out nominee shareholders is a real transaction, and it must be documented as one:

Price: the share transfer price must be justifiable. A symbolic price, or a price far from the company’s book value, raises tax questions and draws attention.
Taxes: a share transfer is subject to stamp duty, and any gain made by the seller is taxable. A tax review before signing avoids surprises.
DBD filings: the change of shareholders, and of directors where a foreign authorised director is added, must be registered with the DBD, which now asks for an investment confirmation letter and, in some cases, proof that the capital was really paid (DBD Order No. 2/2569).
Bank and accounts: the company’s bank, auditor and accounts must reflect the new structure. Banks now check the ultimate beneficial owners closely.
Old documents: pre-signed transfers, side letters and powers of attorney from the former structure should be reviewed with a lawyer, not simply destroyed.

Step 5: Act before an investigation, not after

Acting before an investigation is opened puts you in a much better position than waiting. A restructuring carried out on your own initiative, properly documented and with a legal route in place, shows good faith. It does not erase past breaches, but it stops the risk from growing and protects the business going forward. The same restructuring carried out under pressure, after a summons or a seizure, is slower, more expensive and leaves fewer options.

Each situation is different. Get legal and tax advice from a recognised firm before taking any step, especially before signing a share transfer or selling land.

Key points

Nominee structures have been illegal in Thailand since the Foreign Business Act of 1999. What has changed since 2024 is enforcement, not the law.
857 nominee businesses were prosecuted by May 2025, with 15.3 billion baht of estimated damage, and tens of thousands of companies have been flagged for checks.
Agencies now cross-check registration, bank, tax and land data, and the DBD requires proof of where Thai shareholders’ money comes from.
Penalties apply to both sides: imprisonment, fines and daily fines for the foreigner and the Thai nominee, and possible dissolution of the company.
The most targeted sectors are property, hotels, tourism, restaurants, e-commerce, logistics, construction, agriculture and trade.
Restructuring early through BOI promotion or a Foreign Business License is always better than waiting for an investigation.

Frequently asked questions about nominee structures in Thailand

Have nominee structures ever been legal in Thailand?

No. They have always been illegal under the Foreign Business Act since 1999. What has changed is the intensity of enforcement. The idea that they were “tolerated” reflected a lack of enforcement, never legality.

My adviser told me it was common practice and risk-free. What should I think?

That statement was already wrong in law. Today it is dangerously wrong given current enforcement. Investigations now look at everyone involved, including the people who helped set up the structure, and professional bodies can sanction accountants who breach the rules.

Is holding 49% of the shares with preference shares legal?

Preference shares are allowed under Thai company law. But if they are used to give a foreign minority shareholder full control, the authorities and courts can treat the structure as a nominee arrangement, based on who really controls the company rather than the formal split of the shares.

Will the 2026 FBA reform legalise existing structures?

No. The ministerial regulation of August 2026 only exempts a few targeted services, such as some intra-group and financial services. It does not legalise existing nominee structures, and enforcement against them continues to intensify.

If I restructure voluntarily, am I protected from prosecution for the past?

Early restructuring reduces your exposure going forward but does not guarantee immunity for past breaches. Get legal advice to assess the remaining risk in your situation.

Which sectors are least targeted?

Investigations focus on property, tourism, restaurants, logistics and trade. But the authorities are now checking registration, bank and tax data across the whole company register, and investigations have reached sectors such as fruit packing and machinery trading. No sector should consider itself safe.

Conclusion

Nominee structures in Thailand are no longer a tolerated grey area. They are a source of immediate criminal, civil and business risk. Cross-checked data between agencies, unprecedented coordination and landmark judgments have fundamentally changed the risk-benefit balance. For any foreign investor in Thailand, the only safe route is a compliant legal structure: BOI promotion, a Foreign Business License, a genuine joint venture with a Thai partner of substance, or an activity outside the scope of the Foreign Business Act.

If you want your existing structure reviewed or want to plan a restructuring, contact our team. We help foreign investors bring their structures into compliance from our offices in Thailand.