BANGKOK: Thailand’s Commerce Ministry is intensifying efforts to crack down on foreign nominee businesses, launching expanded investigations into companies suspected of using Thai shareholders to circumvent restrictions under the Foreign Business Act.
The Department of Business Development (DBD) said the move aims to improve transparency and prevent foreign operators from exploiting legal loopholes to avoid state oversight.
Authorities are dividing the investigation into two major categories based on foreign shareholding structures.
Nominee shareholding under scrutiny
The first category focuses on nominee arrangements involving companies where foreign shareholders hold between 0.01 per cent and 49.99 per cent of shares.
Officials said Thailand currently has around 980,000 registered legal entities, including 118,016 companies with foreign shareholders within that range.
Investigators have identified approximately 53,000 potentially risky corporate links and referred cases to relevant agencies for further checks. Around 2,000 mule bank accounts linked to legal entities were also uncovered.
Although some businesses are legitimate joint ventures between Thai and foreign investors, officials believe many use Thai nationals as proxy shareholders, distorting market competition and harming the economy.
The DBD has introduced stricter rules requiring verification of Thai shareholders’ funding sources in companies where foreigners own less than 50 per cent but hold director positions, a structure considered high risk for nominee activity.
Investigators are checking Thai shareholders’ capital sources through bank statements before forwarding information to the Central Investigation Bureau, which examines whether all partners genuinely invested and paid for their shares.
Authorities identified six sectors viewed as especially vulnerable to nominee practices:
• Tourism and related businesses
• Land trading and property businesses
• E-commerce, logistics and warehousing
• Hotels and resorts
• Agriculture-related businesses
• General construction
The provinces with the highest concentrations of suspected nominee activity include Chon Buri, Chiang Mai, Surat Thani, Phuket and Krabi.
Probe expands to firms under foreign control
The second category targets companies where foreigners hold more than 50 per cent ownership and may be operating illegally under Thailand’s Foreign Business Act of 1999.
The DBD plans in-depth investigations into 6,551 legal entities suspected of violating the law.
The investigation will focus on companies registered in Thailand but majority-owned by foreigners, particularly those operating in sectors restricted under the act’s three annex categories.
The law prohibits or restricts foreign participation in certain sectors, including land trading, farming, businesses linked to national security or culture, and industries where Thai firms are considered not yet ready to compete internationally, such as small-scale retail and brokerage businesses.
Bangkok tops suspected illegal business list
DBD Director-General Poonpong Naiyanapakorn said the 10 provinces with the highest number of suspected illegal foreign-controlled businesses were:
• Bangkok — 3,934 companies
• Chon Buri — 1,084
• Samut Prakan — 413
• Rayong — 252
• Pathum Thani — 133
• Samut Sakhon — 110
• Nonthaburi — 95
• Phuket — 68
• Chachoengsao — 61
• Chiang Mai — 59
The top business categories under investigation include wholesale trade, jewellery retail, machinery trading, textile and household goods wholesale, property trading, restaurants, online retail and non-residential construction.
Inspection of foreign-majority firms
The in-depth investigation into foreign businesses operating in Thailand without permission, which may be in breach of the Foreign Business Act of 1999, is separate from the investigation into foreign businesses using nominees as concealed proxies.
Foreign juristic persons that may be in breach of the act will be subject to targeted in-depth monitoring and inspection.
These are juristic persons registered in Thailand in which foreigners hold 50 per cent or more of the shares, to determine whether they are operating businesses without the required permission.
The approach will involve screening foreign juristic persons that show signs of operating businesses under the three restricted lists attached to the Foreign Business Act, based on business type.
Target companies will then be classified according to which restricted list they may have violated, as follows:
• List 1: Businesses that foreigners are not permitted to operate for special reasons, such as land trading, rice farming, plantation farming and orchard farming.
• List 2: Businesses related to national safety or security, or those that may affect arts and culture, customs and traditions, local handicrafts, natural resources or the environment.
• List 3: Businesses in which Thai nationals are not yet ready to compete with foreigners, such as brokerage businesses and retail businesses with capital of less than 100 million baht.
Five-year financial trail probe
The target groups will then be divided into a two-phase inspection plan based on revenue and assets for in-depth investigation.
This will include examining current financial statements and records from the previous five years, cross-checking them against juristic-person registration data, and forwarding information to relevant agencies such as the Department of Special Investigation, the Central Investigation Bureau, the Revenue Department and the Anti-Money Laundering Office.
Authorities will analyse financial statements and registration data to summon high-risk businesses for accounting inspections.
For example, if records show a company is involved in buying, selling or leasing all types of real estate, and its financial statements include land accounts, an activity prohibited for foreigners, the information will be considered for referral to the Department of Lands for further inspection.
If the company earns income from leasing, it may also be considered a List 3 business and be reviewed under foreign business law.
Accounting inspections will also consider whether the business and its bookkeepers have complied with accounting standards and accounting laws.
If accounting professionals, including bookkeepers, auditors or accounting firms, are found to have breached accounting laws or professional accounting regulations, strict legal action will be taken and the matter will be referred to the professional ethics committee.
War and free visas driving migration to Thailand
A Government House source said the Cabinet recently approved upgraded measures to tackle the problem of foreigners settling in Thailand and operating illegal businesses, including nominee arrangements, and designated the issue as a national priority.
The Cabinet Secretariat reported to the Cabinet in March 2026 on discussions over foreigners settling in Thailand and dominating local businesses.
The report said conflict in the Middle East had increased population movement into Asean and Thailand, as many foreigners viewed Thailand as a safe destination.
Authorities also found that some foreigners were exploiting visa-exemption measures to secretly work or run businesses in competition with Thai nationals.
They allegedly used Thai citizens as nominees to hold land and real estate or operate various types of businesses, including hotels, accommodation, hospitals, educational institutions and restaurants.
Government fears impact on security
Security concerns have also emerged from the formation of exclusive foreign communities in several areas, including Koh Samui district in Surat Thani, Pai district in Mae Hong Son and Phuket.
Some of these groups reportedly organise activities only for foreign settlers and bar outsiders from entering, affecting state supervision and potentially causing economic and social damage.
The Cabinet has therefore laid out urgent prevention and response measures as follows:
The Interior Ministry has been assigned as the lead agency, working with the Foreign Affairs Ministry, Commerce Ministry, Labour Ministry, Royal Thai Police and security agencies to monitor, inspect and gather facts on foreign businesses.
The Commerce Ministry has been instructed to tighten business registration procedures and strictly inspect applications to prevent Thai nationals from being used as nominees for foreign capital.
Relevant agencies have been told to consider updating laws, regulations and criteria related to foreign business operations to keep pace with changing circumstances and prevent future legal loopholes. - The Nation/ANN
