Key Takeaways
- From 1 August 2026, registrations of partnerships and limited companies in which a foreign national holds less than 50%, or serves as an authorised director without holding shares, face new documentary requirements under Order of the Central Partnership and Company Registrar No. 2/2569.
- Thai shareholders must produce bank statements covering the three months preceding subscription, showing withdrawals corresponding to their capital contribution.
- Two requirements are new: bank statements of the receiving account showing receipt of subscription monies from all shareholders, and a prescribed Investment Explanation Letter tracing the flow of funds.
- The Order is part of a wider enforcement campaign in which thousands of Thai-majority companies with foreign participation have been flagged for nominee review, with criminal referrals to the DSI and the Revenue Department.
- Foreign investors in Thai-majority structures should ensure capital genuinely originates from the Thai shareholders and moves through traceable banking channels, and should review existing structures before any amendment filing triggers the new scrutiny.
Background
Under Section 36 of the Foreign Business Act B.E. 2542 (1999), a Thai national who holds shares as a foreigner's nominee, and the foreigner who allows it, each face imprisonment of up to three years or a fine of THB 100,000 to 1,000,000, or both, and the court must order the shareholding dissolved. The Supreme Court has consistently refused to assist parties to such arrangements, leaving foreign "beneficial owners" without recourse to recover shares held in Thai names. Enforcement has intensified sharply since 2024: authorities have flagged thousands of Thai-majority companies with foreign participation for review, with investigations referred to the Department of Special Investigation and tax authorities.
What Changed
The new Order applies to the incorporation of a partnership or limited company where a foreign national holds less than 50% of registered capital, or where a company has no foreign shareholder but appoints a foreign national as an authorised director, and to amendment registrations introducing a foreign minority investor or authorised signatory. Applicants must now submit three things: bank statements of each Thai shareholder covering the preceding three months and demonstrating withdrawals corresponding to the subscribed capital; bank statements of the account receiving the capital contributions, showing receipt of the subscription monies from all shareholders; and a prescribed Investment Explanation Letter detailing the flow of funds from each Thai shareholder to the company. Previously, only the Thai shareholders' own statements were required. The registrar can now trace the money end to end.
Practical Implications
For legitimate joint ventures, the Order is an administrative burden, not an obstacle: capital that genuinely originates from the Thai partner and moves through banking channels will document itself. Structures in which the foreign party funds the Thai shareholding, directly or through loans that are never intended to be repaid, will now fail at the registration counter rather than years later in an investigation, and the paper trail submitted becomes evidence.
Foreign investors should take three steps.
- For any new incorporation or amendment involving Thai-majority shareholding, confirm before filing that each Thai shareholder can evidence three months of banking history consistent with their contribution.
- Second, review existing structures now, since any future amendment filing will bring the company under the new scrutiny, and voluntary restructuring remains far preferable to investigation. Lawful routes to foreign control exist, including the Foreign Business Licence, BOI promotion with a certificate under Section 12 of the FBA, and properly structured preference shares supported by genuine Thai investment.
- Read the policy direction correctly: in the same period, the government has moved to delist several business categories from the FBA's restricted lists entirely. Thailand is widening the front door for foreign investment while closing the side door. Businesses relying on the side door should take the hint.
Conclusion
The new documentary requirements make the source of Thai capital a matter of record from day one. Companies with genuine structures have nothing to fear and some paperwork to prepare; companies with nominee arrangements now face a registrar who follows the money. Dej-Udom & Associates advises on registration compliance, structure reviews and lawful restructuring, and we would be pleased to assist companies assessing their position under the new Order.
Disclaimer: This publication is intended for general informational purposes only and does not constitute legal advice. The information contained herein should not be relied upon as a substitute for specific legal counsel. For advice tailored to your circumstances, please contact Dej-Udom & Associates directly.