Recently, Thailand’s Department of Business Development (DBD) announced that it will significantly intensify inspections on the use of “nominee shareholders” by foreign enterprises, with a particular focus on cracking down on six high-risk industries. This policy shift may have a profound impact on many foreign and Chinese companies currently operating in Thailand.
What is a “nominee shareholder”?
A nominee shareholder refers to a Thai citizen who holds shares in a company in name only, while the actual control and ownership belong to a foreigner. This practice violates the Foreign Business Act of Thailand.
Six key industries under heightened scrutiny
The latest high-risk industries identified by the DBD include:
- Tourism-related businesses such as restaurants, souvenir shops, and entertainment venues
- Real estate and land trading
- E-commerce, logistics, and warehousing
- Hotels and resorts
- Agriculture-related businesses
- General construction industry
Why strengthen inspections?
Director-General of the Department of Business Development, Auramon Supthaweethum, stated:
“Nominee shareholder companies undermine investor confidence and harm the national economy, so we must thoroughly eliminate them.”
In fact, reports show that investigators have handled 852 cases from September 2024 to March 2025, involving over 15.1 billion Thai baht.
The investigations have focused on:
- Restaurants and real estate businesses located in areas such as Rama IX, Huai Khwang, and Ratchadaphisek in Bangkok
- Agricultural land in Rayong and Chanthaburi provinces
- Foreign-invested companies with shareholding ratios ranging from 0.09% to 49.9%
The DBD, in collaboration with the Anti-Money Laundering Office (AMLO), has completed a draft amendment to the Anti-Money Laundering Act. Furthermore, the draft clearly stipulates:
- Thai nationals facilitating illegal business operations for foreign investors will be prosecuted
- Assets involved will be seized or frozen
Violations will be prosecuted under Sections 36 and 37 of the Foreign Business Act, with enforcement expected to be more aggressive than ever.
Compliance Recommendations (proposed by WELLION)
1.Review the shareholder structure and remove hidden nominee arrangements
- Moreover, check for Thai shareholders who lack actual controlling power.
- In addition, regularly update the company’s Articles of Association and BOJ (beneficial ownership) records.
2.Choose the appropriate company type and business structure
- Additionally, confirm whether your activities fall under the industries listed in Annex III of the Foreign Business Act.
- If so, consider setting up a BOI-promoted company, a joint venture, or lawfully applying for a Foreign Business License (FBL).
3.Maintain transparent tax and financial reporting
- Furthermore, keep import‑export data, warehouse records, and bank statements consistent with real operations.
- In addition, work with reputable accounting and auditing firms.
4.Ensure the legality of warehouse facilities and registered addresses
- Moreover, use addresses that are properly registered and auditable.
- Avoid “virtual” addresses or “name‑only” lease arrangements.
5.Strengthen communication with legal counsel
- Establish a compliance advisory system and periodically review corporate structure and risks.
- Conduct proactive self‑inspections and prepare legal contingency plans before any complaints or investigations arise.
6.Hold valid visas and work permits
- Foreign staff must work in Thailand only with legitimate visas and work permits.
- Strictly prohibit using shell companies to obtain visas for staff who are actually engaged in business operations.
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