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Thailand Cracks Down on Foreign Firms Using Nominees to Evade Ownership Laws

From Al Jazeera · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Under investigation
  • Thai authorities are cracking down on foreign companies using local nominees to circumvent foreign ownership laws, particularly in sectors like adult content and cannabis.
  • Nearly 500 businesses, allegedly registered by a single accounting firm, are linked to foreigners who used Thai nominees to hold majority stakes, violating the Foreign Business Act.
  • The government is increasing scrutiny on 50,000 foreign-linked companies, with legal firms reporting a surge in inquiries from concerned foreign investors.

Thailand is intensifying its crackdown on foreign companies that allegedly use local Thai individuals as nominees to illegally gain majority ownership and bypass foreign ownership regulations. Authorities have identified nearly 500 businesses, ranging from nail salons to cannabis farms, that were reportedly registered by a single accounting firm and linked to foreigners. These companies are accused of falsely listing Thai nominees as owning at least 51 percent of the business, despite the Foreign Business Act generally prohibiting non-citizens from holding more than a 49 percent stake.

All of them fear losing their investment and being charged with a criminal case.

— Brian RamsdenGeneral manager of foreign affairs at Lawyers for Expats Thailand, describing the concerns of foreign business owners.

After years of overlooking such practices, Thai authorities are now demanding proof that the listed Thai partners genuinely hold significant stakes in these companies. This crackdown follows a wave of inspections in popular tourist areas and the use of artificial intelligence to cross-check official databases. The government has identified approximately 50,000 foreign-linked companies that will face greater scrutiny. The issue has gained prominence amid concerns about the proliferation of cyber-scam networks in Southeast Asia, with shell companies potentially being used for illicit activities.

It’s always the same excuse: ‘We knew it was illegal, but the lawyers told us it’s OK,'

— Brian RamsdenGeneral manager of foreign affairs at Lawyers for Expats Thailand, explaining common justifications for using nominee schemes.

Legal firms specializing in assisting expatriates are reporting a significant increase in inquiries from foreign businesses and property owners who fear their assets could be frozen or seized. Brian Ramsden, general manager of foreign affairs at Lawyers for Expats Thailand, stated that his firm receives over 100 calls daily from individuals concerned about losing their investments and facing criminal charges. "It's always the same excuse: 'We knew it was illegal, but the lawyers told us it's OK,'" Ramsden commented, highlighting a common sentiment among those caught in these nominee schemes.

If the company is not trading, it’s a red flag.

— Brian RamsdenGeneral manager of foreign affairs at Lawyers for Expats Thailand, identifying a warning sign of illicit nominee arrangements.

Thai Prime Minister Anutin Charnvirakul has been a vocal proponent of this crackdown. During a recent tour of southern Thailand, he pledged to take strict action against illegal businesses and dismantle any criminal organizations utilizing shell companies. The focus on nominee schemes is part of a broader effort to ensure compliance with business ownership laws and combat fraudulent practices within the country's economy.

In cases where … one person holds shares and owns over 200 companies, it is essentially selling companies, selling shells so t

— Anutin CharnvirakulThai Prime Minister discussing the scale of fraudulent company registrations.
DistantNews Editorial

Originally published by Al Jazeera in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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