In May 2026, the Department of Special Investigation, the Department of Business Development, and land officials began one of the largest enforcement campaigns against foreign nominee businesses that Thailand has seen. On Koh Samui and Koh Phangan, more than eleven thousand registered companies were analysed and risk-tiered; thirty-four firms were placed under investigation; twenty-two foreign nationals were arrested in a single phase, and more than forty rai of land worth over two hundred million baht were seized. The Prime Minister travelled to Koh Phangan in person, and the campaign is to expand to Phuket, Krabi, Phang Nga, Pattaya, and Hua Hin.
Let me state my position plainly. The enforcement is legitimate. A country is entitled to decide which sectors of its economy are reserved for its own nationals, and Thailand made that decision in the Foreign Business Act B.E. 2542 (1999). Where a Thai national lends his or her name to hold shares on paper while a foreigner keeps the real financial and managerial control, that is not a grey area; it is a circumvention of the law. What concerns me is not that the State is enforcing the Act, but that enforcement of this scale must be carried out by the rule of law, and the rule of law cuts both ways. It binds those who evade the Act, and it equally protects the foreign investor who has done nothing wrong.
A shared crime: both the Thai and the foreigner are liable
The first thing every investor should understand is that a nominee arrangement is not a one-sided offence with the Thai partner exposed and the foreigner safe. Section 36 of the Foreign Business Act makes it a joint crime, a conspiracy in substance. It penalises the Thai national who assists, supports, or participates with a foreigner in order to evade the Act, and in the same provision it penalises the foreigner who permits or takes part in that arrangement. The two are co-offenders, jointly liable as principals under Section 83 of the Penal Code, because they acted in concert toward the same unlawful purpose.
The consequences fall on both sides alike. Each faces imprisonment of up to three years, or a fine of 100,000 to 1,000,000 baht, or both, together with a daily fine of up to 50,000 baht for as long as the contravention continues, and the court orders the business to cease. The structure rarely stops at the Foreign Business Act. A false declaration of shareholding made to the company registrar engages the Penal Code as well, Section 137 on giving false information to an official and Section 267 on causing a false entry in a public document, and where land is taken in a Thai name for a foreigner's benefit, the Land Code is engaged too. A genuine nominee is therefore not one offence but several, shared across two parties at once.
Why the legitimate investor is the one at risk
Here is the difficulty the headlines miss. The foreign-linked companies in these provinces are not all criminal enterprises, and foreign investment is not itself the offence. Many of these structures are perfectly lawful: companies holding a Foreign Business Licence, businesses promoted by the Board of Investment, United States nationals under the Treaty of Amity, and companies in which a foreign minority holds preference shares with legitimately negotiated protections. None of these is a nominee.
The risk in a campaign that sorts companies by statistical risk tier rather than by individual examination is that the lawful and the unlawful are swept into the same net and only separated afterward, by which time reputations and banking relationships have already suffered. The test in law is control and purpose: did the Thai shareholder genuinely invest and genuinely bear the risk, or was the name lent to evade the Act? That is a question of fact and intention, to be proved, not presumed. Enforcement that presumed guilt from the mere presence of a foreigner would itself depart from the law it claims to uphold.
What foreign investors and their Thai partners should do now
For those with legitimate structures, the task is to be able to prove what you already are. Confirm that your Thai shareholders made real capital contributions from their own funds, that they receive genuine dividends, and that the record reflects this. Where a Foreign Business Licence, a Board of Investment promotion, or the Treaty of Amity is available for your activity, regularise onto that basis now rather than relying on a thin Thai shareholding. And because liability is shared, the Thai partner is exposed alongside the foreigner: a partner who cannot in good conscience confirm a real investment is telling you something you need to hear before the State does.
For those whose structures are, in truth, nominee arrangements, the lawful course is restructuring, not concealment. The Foreign Business Act and the Board of Investment between them offer routes to majority or full foreign ownership in many activities, and the recent Cabinet decision to delist nine reserved activities shows the lawful door is opening wider. It is far better to convert voluntarily than to wait for the investigation to arrive.
A closing word on balance
Thailand is doing two things at once. With one hand it is liberalising and courting foreign investment; with the other it is enforcing, and enforcing hard. These are not contradictory. A country can both welcome lawful investment and refuse unlawful evasion. But the two can only be reconciled by the rule of law: clear rules, applied consistently, that distinguish the genuine investor from the sham and give the honest foreigner a visible, lawful path rather than the fear of being caught in a dragnet meant for someone else. Enforcement without that clarity protects no one. Enforcement with it protects everyone, including the foreign investor who came here to build something real.
How we can help
Our Corporate and Commercial team reviews foreign-ownership structures against the Foreign Business Act and advises on conversion to a Foreign Business License, a Board of Investment promotion, or the Treaty of Amity. Where a matter has already drawn the authorities' attention, our Litigation and Dispute Resolution team acts on the defence. To arrange a confidential review of your structure, contact [email protected].
Disclaimer: This publication is intended for general informational purposes only and does not constitute legal advice. For advice tailored to your circumstances, please contact Dej-Udom & Associates directly.