The Thai government has issued a renewed warning to its citizens against acting as illegal nominees for foreign-owned businesses, citing serious legal consequences including imprisonment, large financial penalties, and asset seizures. The announcement comes amid increased scrutiny to enforce the 1999 Foreign Business Act, particularly in key tourism hubs.
Authorities have intensified surveillance of companies suspected of circumventing foreign ownership restrictions by using Thai nationals to hold shares on behalf of foreign investors. Sectors under close observation include tourism, hospitality, real estate, and logistics, with particular attention on provinces such as Phuket, Chonburi, Bangkok, and Chiang Mai, where foreign investment is especially prominent.
Recent enforcement efforts were underscored by a ruling from the Criminal Court in Phuket, where 23 individuals and corporate entities were found guilty of nominee arrangements. Each party received a fine of 200,000 baht, a two-year suspended prison sentence, and one year of probation. Their companies were ordered dissolved.
The penalties for engaging in nominee activities are substantial. Individuals found guilty can face up to three years in prison and fines ranging from 100,000 to one million baht. Daily fines between 10,000 and 50,000 baht may also be imposed until illegal operations cease. In addition to financial sanctions, the state may confiscate shares and assets linked to the violation, and revoke the business licenses of companies involved.
Officials say the use of Thai nominees by foreign entities distorts market competition and undermines transparency. There are also concerns such practices could be used to facilitate illicit financial activities, such as money laundering, ultimately damaging investor confidence and Thailand’s international business reputation.
Deputy Government Spokesperson Anukool Pruksanusak conveyed the warning and cited the Phuket case. The Department of Business Development continues to lead monitoring and enforcement efforts.
