Reviewed by Wichuda Atthamethakon, LL.M., Thai Bar Licence 3149/2556, for ThaiLawOnline, a Thai law firm acting for foreigners since 2006.
Update log
- 2 November 2026: Added the statute box with Thai, English and French text and checked the page against the official text
The landscape of business ownership in Thailand has seen a fundamental shift as of April 1, 2026. The Department of Business Development (DBD) has moved from a “form-based” (paper) compliance model to a “substance-based” reality. It is no longer enough to have 51% Thai names on a shareholder list; the government now uses AI and mandatory financial verification to ensure those shareholders are genuine .
The lawful alternatives to a nominee structure are set out in our guide to setting up a business in Thailand.
Table of Contents
Introduction to Thai Nominee Shareholders
Nominee shareholders in Thailand are used to disguise foreign participation in the local market. A nominee shareholder is usually a Thai person or company. They hold shares for a foreigner. This is often done to get around rules on foreign ownership. Where it is done to get around the Foreign Business Act, it is a criminal offence for both sides.
A nominee shareholder is a person or entity that holds shares in a company. They do this for the benefit of someone else, often a foreign investor. These shareholders are not a lawful route for foreigners who want to set up a Thai limited company. The legal rules about nominee shareholding are complicated. Misunderstandings can result in serious legal trouble for both the nominee and the foreigner.
Thai nominee structures have helped connect foreign investors with the limits set by Thai law on foreign ownership. These structures help foreigners access some parts of the Thai business world that are usually off-limits. None of this makes a nominee lawful: holding shares for a foreigner so that the foreigner can carry on a restricted business is itself an offence under section 36 of the Foreign Business Act, for the Thai holder and for the foreigner who consents to it.
The shareholding structure of a Thai company is dictated by the requirements set forth in the Foreign Business Act. The Act does not fix a Thai shareholding: it treats a company as a foreigner when foreigners hold half or more of its capital (section 4) and then restricts the listed businesses (section 8). This rule has led to the use of Thai nominee shareholders. It is important to understand how voting rights are distributed. This is especially true for those doing business in Thailand. Knowing the effects of having a partly foreign-owned company is also key.
The Regulatory Landscape in Thailand
The regulatory landscape governing nominee businesses in Thailand is intricate and subject to frequent changes. Thai law mandates specific requirements for foreign ownership, particularly under the Foreign Business Act. Understanding these rules is important for foreign investors who want to enter the Thai market. They must also manage the challenges of business registration and compliance. The rules about nominee shareholding aim to protect the local economy.
The main laws that affect nominee businesses in Thailand are the Foreign Business Act and parts of the Thai Civil and Commercial Code. These laws set the rules for foreign investors. They do not permit nominee arrangements in any form. Foreign investors must know these laws. This helps them avoid non-compliance. Non-compliance can lead to legal action against the foreigner and the Thai nominee shareholder in the nominee structures.
The Department of Business Development (DBD) is important for managing business registration. It also makes sure businesses follow Thai law. It monitors the activities of Thai nominee shareholders. It also enforces rules about foreign ownership in Thailand. The DBD has been paying more attention in recent years. This has led to a crackdown on businesses that use nominee structures. Foreign investors need to work closely with the DBD. This helps them follow the laws and rules. By doing this, they can protect their investments.
The implications of foreign ownership regulations in Thailand are significant for those looking to invest in the country. A company with half or more foreign capital cannot carry on a listed business without a licence, certificate or BOI promotion. This has led to many Thai nominee shareholders being used. The growing enforcement of these laws means foreign investors need to think carefully about their business structures. They should also consider the risks of using Thai nominees. Failure to comply can jeopardize not only the business registration but also the entire investment strategy.
To eliminate nominee structures, the DBD introduced four screening orders covering registrations and amendments; only the first is tied to foreign participation. Three of them remain in force unchanged; the first has since been repealed and replaced by a stricter order:
- Order 2/2568, repealed and replaced by Order 2/2569 on 1 August 2026: Thai shareholders had to provide personal bank statements for the three months prior to share payment to prove they used “seasoned” funds from their own accounts. Clause 3 of Order 2/2569 carries that requirement and goes further: it also requires a statement from the account that received the payment, and an Investment Explanation Letter on the annexed form.
- Order 3/2568: Automated screening against the Anti-Money Laundering Office (AMLO) list; high-risk individuals must appear in person for verification.
- Order 4/2568 (The Rule of Five): Where the registrar finds that five or more partnerships or companies are already registered at the same premises, the applicant must file a letter of consent from the person entitled to allow use of the head office, together with a copy of the evidence of that right to use.
- Order 5/2568: Screening of State Welfare Card holders to prevent the use of low-income “money mules” as front-men.
The law behind this page
English
Section 36 Foreign Business Act B.E. 2542
Full text
A person of Thai nationality or a juristic person that is not an alien under this Act who assists or supports, or joins in operating, a business of an alien that is a business specified in the Lists annexed to this Act, where that alien has not been permitted to operate that business, or who joins in operating a business of an alien while representing it as being their business alone, or who holds shares on behalf of an alien in a partnership, limited company or any juristic person so that the alien may operate a business by evading or violating the provisions of this Act, and likewise an alien who consents to a person of Thai nationality or a juristic person that is not an alien under this Act doing such an act, shall be liable to imprisonment not exceeding 3 years, or a fine from 100,000 baht to 1,000,000 baht, or both, and the court shall order the assistance or support to cease, or the joint operation of the business to cease, or the shareholding or partnership to cease, as the case may be. A person who fails to comply with the court's order shall be liable to a fine of 10,000 baht to 50,000 baht per day for as long as the violation continues.
ThaiLawOnline translation
Section 4 Foreign Business Act B.E. 2542
Full text
In this Act: "alien" means: (1) a natural person who does not have Thai nationality; (2) a juristic person not registered in Thailand; (3) a juristic person registered in Thailand and having the following characteristics: (a) a juristic person in which shares representing half or more of its capital are held by persons under (1) or (2), or a juristic person in which persons under (1) or (2) have invested a value of half or more of its total capital; (b) a limited partnership or registered ordinary partnership whose managing partner or manager is a person under (1); (4) a juristic person registered in Thailand in which shares representing half or more of its capital are held by persons under (1), (2) or (3), or in which persons under (1), (2) or (3) have invested a value of half or more of its total capital. For the purposes of this definition, shares of a limited company for which bearer share certificates are issued are deemed to be shares of an alien, unless otherwise prescribed in a Ministerial Regulation. "capital" means the registered capital of a limited company, the paid-up capital of a public limited company, or the money contributed as shares by partners or members to a partnership or juristic person; "minimum capital" means the capital of an alien where the alien is a juristic person registered in Thailand, and, where the alien is a juristic person not registered in Thailand or a natural person, the foreign currency the alien brings in for use on commencing business in Thailand; "business" means engaging in agriculture, industry, handicraft, commerce, services or other activities, for trade; "licence" means a licence to operate a business; "licensee" means an alien who has received a licence; "certificate" means a certificate to operate a business; "certificate holder" means an alien who has received a certificate; "Committee" means the Foreign Business Committee; "competent official" means a person appointed by the Minister to act under this Act; "Registrar" means a person appointed by the Minister as Registrar of Foreign Business Operations; "Director General" means the Director General of the Department of Business Development; "Minister" means the Minister in charge of this Act.
ThaiLawOnline translation
Section 37 Foreign Business Act B.E. 2542
Full text
An alien who carries on a business in violation of section 6, 7 or 8 shall be punished with imprisonment not exceeding 3 years, or a fine of 100,000 to 1,000,000 baht, or both, and the court shall order the cessation of the business, the dissolution of the undertaking, or the termination of the shareholding or partnership, as the case may be. A person who fails to comply with the court's order shall be punished with a fine of 10,000 to 50,000 baht per day for as long as the violation continues.
ThaiLawOnline translation
Section 86 Limitation of Aliens Right in Land
Full text
An alien may acquire land only by virtue of the provisions of a treaty which provides that ownership of immovable property may be held, and subject also to the provisions of this Code. Subject to section 84, such an alien may acquire land for residential, commercial, industrial, agricultural, cemetery, public charity or religious purposes only in accordance with the conditions and procedure prescribed by ministerial regulation, and permission must be obtained from the Minister.
Unofficial translation by the Office of the Council of State
Section 96 Limitation of Aliens Right in Land
Full text
When any person appears to have acquired any land as an owner on behalf of an alien or juristic person under Section 97 or Section 98, the Director- General shall have the power to dispose of such land and the provisions of Section 94 shall apply mutatis mutandis.
Unofficial translation by the Office of the Council of State
Section 94 Limitation of Aliens Right in Land
Full text
Land acquired by an alien unlawfully or without permission shall be disposed of by that alien within the period prescribed by the Director-General, which shall be not less than one hundred and eighty days and not more than one year. If the land is not disposed of within the prescribed period, the Director-General shall have power to dispose of the land, and the provisions on forced disposal of land in Chapter 3 shall apply mutatis mutandis.
Unofficial translation by the Office of the Council of State
Section 113 Penalties
Full text
Any person who acquires land as an agent of an alien or of a juristic person under section 97 or section 98 shall be liable to a fine not exceeding twenty thousand baht or to imprisonment for a term not exceeding two years, or to both.
Unofficial translation by the Office of the Council of State
Section 150
Any agreement, gift or other juristic act whose object is expressly prohibited by law, impossible, or against public order or good morals has no legal effect from the start.
Full text
An act the object of which is expressly prohibited by law, or is impossible, or is contrary to public order or good morals, is void.
ThaiLawOnline translation
ไทย
มาตรา 36 พระราชบัญญัติการประกอบธุรกิจของคนต่างด้าว พ.ศ. 2542
ข้อความเต็ม
ผู้มีสัญชาติไทยหรือนิติบุคคลที่มิใช่คนต่างด้าวตามพระราชบัญญัตินี้ ให้ความช่วยเหลือหรือสนับสนุนหรือร่วมประกอบธุรกิจของคนต่างด้าว อันเป็นธุรกิจที่กำหนดไว้ในบัญชีท้ายพระราชบัญญัตินี้ โดยคนต่างด้าวนั้นมิได้รับอนุญาตให้ประกอบธุรกิจดังกล่าว หรือร่วมประกอบธุรกิจของคนต่างด้าวโดยแสดงออกว่าเป็นธุรกิจของตนแต่ผู้เดียวหรือถือหุ้นแทนคนต่างด้าวในห้างหุ้นส่วนหรือบริษัทจำกัด หรือนิติบุคคลใด ๆ เพื่อให้คนต่างด้าวประกอบธุรกิจโดยหลีกเลี่ยงหรือฝ่าฝืนบทบัญญัติแห่งพระราชบัญญัตินี้ รวมทั้งคนต่างด้าวซึ่งยินยอมให้ผู้มีสัญชาติไทยหรือนิติบุคคลที่มิใช่คนต่างด้าวตามพระราชบัญญัตินี้กระทำการดังกล่าว ต้องระวางโทษจำคุกไม่เกินสามปี หรือปรับตั้งแต่หนึ่งแสนบาทถึงหนึ่งล้านบาท หรือทั้งจำทั้งปรับ และให้ศาลสั่งให้เลิกการให้ความช่วยเหลือหรือสนับสนุน หรือสั่งให้เลิกการร่วมประกอบธุรกิจ หรือสั่งให้เลิกการถือหุ้น หรือการเป็นหุ้นส่วนนั้นเสีย แล้วแต่กรณี หากฝ่าฝืนไม่ปฏิบัติตามคำสั่งศาลต้องระวางโทษปรับวันละหนึ่งหมื่นบาทถึงห้าหมื่นบาทตลอดเวลาที่ยังฝ่าฝืนอยู่
ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)
มาตรา 4 พระราชบัญญัติการประกอบธุรกิจของคนต่างด้าว พ.ศ. 2542
ข้อความเต็ม
ในพระราชบัญญัตินี้ “คนต่างด้าว” หมายความว่า (๑) บุคคลธรรมดาซึ่งไม่มีสัญชาติไทย (๒) นิติบุคคลซึ่งไม่ได้จดทะเบียนในประเทศไทย (๓) นิติบุคคลซึ่งจดทะเบียนในประเทศไทย และมีลักษณะดังต่อไปนี้ (ก) นิติบุคคลซึ่งมีหุ้นอันเป็นทุนตั้งแต่กึ่งหนึ่งของนิติบุคคลนั้นถือโดยบุคคลตาม (๑) หรือ (๒) หรือนิติบุคคลซึ่งมีบุคคลตาม (๑) หรือ (๒) ลงทุนมีมูลค่าตั้งแต่กึ่งหนึ่งของทุนทั้งหมดในนิติบุคคลนั้น (ข) ห้างหุ้นส่วนจำกัดหรือห้างหุ้นส่วนสามัญที่จดทะเบียน ซึ่งหุ้นส่วนผู้จัดการหรือผู้จัดการเป็นบุคคลตาม (๑) (๔) นิติบุคคลซึ่งจดทะเบียนในประเทศไทย ซึ่งมีหุ้นอันเป็นทุนตั้งแต่กึ่งหนึ่งของนิติบุคคลนั้นถือโดยบุคคลตาม (๑) (๒) หรือ (๓) หรือนิติบุคคลซึ่งมีบุคคลตาม (๑) (๒) หรือ (๓) ลงทุน มีมูลค่าตั้งแต่กึ่งหนึ่งของทุนทั้งหมดในนิติบุคคลนั้น เพื่อประโยชน์แห่งคำนิยามนี้ให้ถือว่าหุ้นของบริษัทจำกัดที่มีใบหุ้นชนิดออกให้แก่ผู้ถือเป็นหุ้นของคนต่างด้าว เว้นแต่จะได้มีกฎกระทรวงกำหนดไว้เป็นอย่างอื่น “ทุน” หมายความว่า ทุนจดทะเบียนของบริษัทจำกัด หรือทุนชำระแล้วของบริษัทมหาชนจำกัด หรือเงินที่ผู้เป็นหุ้นส่วนหรือสมาชิกนำมาลงหุ้นในห้างหุ้นส่วนหรือนิติบุคคลนั้น “ทุนขั้นต่ำ” หมายความว่า ทุนของคนต่างด้าวในกรณีที่คนต่างด้าวเป็นนิติบุคคลซึ่งจดทะเบียนในประเทศไทย และในกรณีที่คนต่างด้าวเป็นนิติบุคคลซึ่งไม่ได้จดทะเบียนในประเทศไทยหรือเป็นบุคคลธรรมดาให้หมายถึงเงินตราต่างประเทศที่คนต่างด้าวนำมาใช้เมื่อเริ่มต้นประกอบธุรกิจในประเทศไทย “ธุรกิจ” หมายความว่า การประกอบกิจการในทางเกษตรกรรม อุตสาหกรรม หัตถกรรม พาณิชยกรรม การบริการ หรือกิจการอย่างอื่น อันเป็นการค้า “ใบอนุญาต” หมายความว่า ใบอนุญาตประกอบธุรกิจ “ผู้รับใบอนุญาต” หมายความว่า คนต่างด้าวที่ได้รับใบอนุญาต “หนังสือรับรอง” หมายความว่า หนังสือรับรองการประกอบธุรกิจ “ผู้รับหนังสือรับรอง” หมายความว่า คนต่างด้าวที่ได้รับหนังสือรับรอง “คณะกรรมการ” หมายความว่า คณะกรรมการการประกอบธุรกิจของคนต่างด้าว “พนักงานเจ้าหน้าที่” หมายความว่า ผู้ซึ่งรัฐมนตรีแต่งตั้งให้ปฏิบัติการตามพระราชบัญญัตินี้ “นายทะเบียน” หมายความว่า ผู้ซึ่งรัฐมนตรีแต่งตั้งให้เป็นนายทะเบียนการประกอบธุรกิจของคนต่างด้าว “อธิบดี” หมายความว่า อธิบดีกรมพัฒนาธุรกิจการค้า* “รัฐมนตรี” หมายความว่า รัฐมนตรีผู้รักษาการตามพระราชบัญญัตินี้
ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)
มาตรา 37 พระราชบัญญัติการประกอบธุรกิจของคนต่างด้าว พ.ศ. 2542
ข้อความเต็ม
คนต่างด้าวผู้ใดประกอบธุรกิจโดยฝ่าฝืนมาตรา ๖ มาตรา ๗ หรือมาตรา ๘ ต้องระวางโทษจำคุกไม่เกินสามปี หรือปรับตั้งแต่หนึ่งแสนบาทถึงหนึ่งล้านบาท หรือทั้งจำทั้งปรับ และให้ศาลสั่งเลิกการประกอบธุรกิจ หรือเลิกกิจการ หรือสั่งเลิกการเป็นผู้ถือหุ้น หรือเป็นหุ้นส่วน แล้วแต่กรณี หากฝ่าฝืนไม่ปฏิบัติตามคำสั่งศาลต้องระวางโทษปรับวันละหนึ่งหมื่นบาทถึงห้าหมื่นบาทตลอดเวลาที่ยังฝ่าฝืนอยู่
ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)
มาตรา 86
ข้อความเต็ม
คนต่างด้าวจะได้มาซึ่งที่ดินก็โดยอาศัยบทสนธิสัญญาซึ่งบัญญัติให้มีกรรมสิทธิ์ในอสังหาริมทรัพย์ได้ และอยู่ในบังคับบทบัญญัติแห่งประมวลกฎหมายนี้ด้วย ภายใต้บังคับมาตรา ๘๔ คนต่างด้าวดังกล่าวจะได้มาซึ่งที่ดินเพื่อใช้เป็นที่อยู่อาศัย ประกอบกิจการในทางพาณิชยกรรม อุตสาหกรรม เกษตรกรรม การสุสาน การกุศลสาธารณะ หรือการศาสนา ต้องเป็นไปตามเงื่อนไขและวิธีการซึ่งกำหนดโดยกฎกระทรวง และต้องได้รับอนุญาตจากรัฐมนตรี
ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)
มาตรา 96
ข้อความเต็ม
เมื่อปรากฏว่าผู้ใดได้มาซึ่งที่ดินแห่งใดในฐานะเป็นเจ้าของแทนคนต่างด้าว หรือนิติบุคคลตามความในมาตรา ๙๗ หรือมาตรา ๙๘ ให้อธิบดีมีอำนาจทำการจำหน่ายที่ดินนั้น และให้นำบทบัญญัติมาตรา ๙๔ มาใช้บังคับโดยอนุโลม
ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)
มาตรา 94
ข้อความเต็ม
บรรดาที่ดินที่คนต่างด้าวได้มาโดยไม่ชอบด้วยกฎหมาย หรือไม่ได้รับอนุญาต ให้คนต่างด้าวนั้นจัดการจำหน่ายภายในเวลาที่อธิบดีกำหนดให้ ซึ่งไม่น้อยกว่าหนึ่งร้อยแปดสิบวัน แต่ไม่เกินหนึ่งปี ถ้าไม่จำหน่ายที่ดินภายในเวลาที่กำหนด ให้อธิบดีมีอำนาจจำหน่ายที่ดินนั้น และให้นำบทบัญญัติเรื่องการบังคับจำหน่ายที่ดินตามความในหมวด ๓ มาใช้บังคับโดยอนุโลม
ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)
มาตรา 113
ข้อความเต็ม
ผู้ใดได้มาซึ่งที่ดินในฐานะเป็นตัวแทนของคนต่างด้าว หรือนิติบุคคลตามความในมาตรา ๙๗ หรือมาตรา ๙๘ มีความผิดต้องระวางโทษปรับไม่เกินสองหมื่นบาท หรือจำคุกไม่เกินสองปี หรือทั้งปรับทั้งจำ
ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)
มาตรา 150
ข้อความเต็ม
การใดมีวัตถุประสงค์เป็นการต้องห้ามชัดแจ้งโดยกฎหมาย เป็นการพ้นวิสัย หรือเป็นการขัดต่อความสงบเรียบร้อยหรือศีลธรรมอันดีของประชาชน การนั้นเป็นโมฆะ
ตรงตามข้อความในราชกิจจานุเบกษา / สำนักงานคณะกรรมการกฤษฎีกา (Verbatim from the Royal Gazette / Office of the Council of State)
Français
Article 36 Foreign Business Act B.E. 2542
Le Thaïlandais ou la personne morale non étrangère, prête-nom ou aidant un étranger non autorisé pour une activité des listes, et l'étranger consentant, encourent jusqu'à 3 ans de prison et/ou 100 000 à 1 000 000 bahts. Cessation ordonnée, sous peine de 10 000 à 50 000 bahts par jour.
résumé non officiel
Article 4 Foreign Business Act B.E. 2542
Est étrangère la personne physique sans nationalité thaïlandaise, la personne morale non enregistrée en Thaïlande, ou celle enregistrée dont des étrangers détiennent au moins la moitié du capital ou, pour une société de personnes, dont le gérant est une personne physique étrangère. L'article définit notamment capital et activité commerciale.
résumé non officiel
Article 37 Foreign Business Act B.E. 2542
Un étranger exerçant en violation des articles 6, 7 ou 8 encourt jusqu'à 3 ans de prison, ou 100 000 à 1 000 000 de bahts d'amende, ou les deux; le tribunal ordonne la cessation ou la fin de la participation. Inexécution: 10 000 à 50 000 bahts par jour.
résumé non officiel
Article 86
Un étranger ne peut acquérir un terrain qu'en vertu des dispositions d'un traité qui permet d'avoir la propriété d'un bien immobilier, et sous réserve également des dispositions du présent Code. Sous réserve de l'article 84, cet étranger ne peut acquérir un terrain à usage d'habitation, d'activité commerciale, industrielle ou agricole, de cimetière, de bienfaisance publique ou de culte que conformément aux conditions et à la procédure fixées par règlement ministériel, et il doit obtenir l'autorisation du Ministre.
résumé non officiel
Article 96
Lorsqu'une personne acquiert un terrain en qualité de propriétaire pour le compte d'un étranger ou d'une personne morale visée à l'article 97 ou 98, le directeur général a le pouvoir de l'aliéner, l'article 94 s'appliquant par analogie.
résumé non officiel
Article 94
Tout terrain acquis par un étranger de manière illicite ou sans autorisation doit être aliéné par cet étranger dans le délai fixé par le Directeur général, qui ne peut être inférieur à cent quatre-vingts jours ni supérieur à un an. Si le terrain n'est pas aliéné dans le délai fixé, le Directeur général a le pouvoir d'aliéner ce terrain, et les dispositions relatives à l'aliénation forcée de terrains prévues au chapitre 3 s'appliquent mutatis mutandis.
résumé non officiel
Article 113
Quiconque acquiert un terrain en qualité de mandataire d'un étranger ou d'une personne morale visée à l'article 97 ou à l'article 98 est passible d'une amende n'excédant pas vingt mille bahts ou d'un emprisonnement n'excédant pas deux ans, ou de ces deux peines.
résumé non officiel
Article 150
Est nul l'acte dont l'objet est expressément prohibé par la loi, est impossible, ou est contraire à l'ordre public ou aux bonnes mœurs.
résumé non officiel
Supreme Court decisions
- 2690/2538 (1995): Nominee Land for a Foreigner: Not Wholly Void, but a Good-Faith Buyer Takes Priority
- 5457/2560 (2017): Sham Loan Hiding a Business Bought Through Thai Nominee Shareholders: Void, and the Money Irrecoverable
- 2252/2560 (2017): Foreign Company Trading Land Loses the Right to Prosecute Its Own Directors
Sources
- Foreign Business Act B.E. 2542, retrieved 31 October 2026
- Land Code, Office of the Council of State, retrieved 31 October 2026
- Civil and Commercial Code, Office of the Council of State, retrieved 31 October 2026
- deka.supremecourt.or.th, Supreme Court of Thailand decisions database (copy held in our library), retrieved 19 February 2026
Understanding the Crackdown on Nominee Structures
The recent crackdown on nominee structures in Thailand shows the government’s commitment to enforcing laws. These laws protect local businesses and ensure that foreign ownership rules are followed. This increased attention comes from a wish to keep the economy strong and support fair competition in the Thai market. Foreign investors must understand the implications of this crackdown, as it may significantly impact their ability to operate within the country.
The current crackdown is driven by the Intelligence Business Analytic System (IBAS), an AI-powered platform used by the DBD since late 2025. IBAS automatically cross-references the corporate registry with the Revenue Department and Land Department to detect “financial implausibility.” For example, if a Thai national with a modest income is listed as a majority shareholder in a company holding multi-million baht property, the system triggers an immediate investigation.
The results are now measured in land, not press releases. On Koh Phangan the Interior Ministry identified 112 juristic persons whose foreign shareholding exceeded the legal threshold, holding 124 land plots (about 86 rai 3 ngan 42.4 square wah); 104 were newly detected, 8 already had court judgments, and the Surat Thani Governor ordered 8 entities to dispose of 9 plots. The figures were first announced on 25 August 2026 and restated by the Government Spokesman on 10 September 2026, who added that company registrations in the DBD’s nominee-risk category fell from 894 in August 2025 to 163 in August 2026. The disposal order is the Land Code consequence for land held through a Thai front: the company must sell within the period set, or the Department of Lands sells for it. Our nominee crackdown 2026 article follows the enforcement timeline.
Several case studies illustrate the legal action taken against businesses found to be in violation of nominee regulations. Foreign companies using Thai nominee shareholders for unfair benefits have faced penalties. These penalties include fines and company dissolutions. These cases highlight the importance of adhering strictly to Thai law and understanding the risks associated with using nominees. Foreign investors need to know that not following these laws can lead to serious problems. This includes losing business licenses and facing legal issues.
The crackdown on nominee structures has profound implications for both foreign investors and the broader Thai business community. For foreign investors, it necessitates a reevaluation of existing business strategies and compliance measures to align with the stricter regulatory environment. For Thai businesses, it boosts competition by reducing the benefits from non-compliant nominee arrangements. This regulatory change aims to create a clearer and fairer business environment in Thailand. It will benefit everyone involved.
Best Practices for Compliance
Establishing legitimate shareholding structures is essential for foreign investors aiming to navigate the complexities of business in Thailand. A good shareholding setup follows Thai law, especially the Foreign Business Act. It also reduces risks linked to nominee arrangements. Hiring a qualified legal advisor can help you understand the rules for majority Thai ownership. They can guide you in setting up a Thai limited company that meets all legal requirements.
There is no compliant way to run a nominee arrangement, and a written agreement between a foreigner and a Thai nominee does not protect anyone: it is evidence of the section 36 offence, and the arrangement it records is void under section 150 of the Civil and Commercial Code. The lawful routes are genuine Thai shareholders who invest their own money, a Foreign Business Licence, a Foreign Business Certificate under a treaty, BOI promotion, or a structure that stays outside the restricted lists.
Utilizing Thai shareholders effectively involves understanding their role within the shareholding structure of a Thai company. Foreign investors should work with Thai nationals. They should be compliant and have good knowledge of the local market. This partnership can enhance the foreign business’s operational capabilities while ensuring compliance with foreign ownership regulations. Building a real partnership with Thai shareholders can strengthen business ties. This can improve the chances of long-term success in the competitive Thai market.
Recent trends in Thai nominee policies reflect a tightening of regulations aimed at enhancing compliance and protecting local businesses. The government’s action against non-compliant nominee structures shows a shift towards stricter enforcement of the Foreign Business Act. Foreign investors need to stay updated on changing policies. This helps them manage shareholding complexities. It also helps avoid legal issues. Staying informed ensures their business operations are legal and successful in Thailand.
Foreign investors who want to enter the Thai market should understand the laws about nominee shareholding. It is a good idea to get help from a lawyer who knows Thai law. They can help you with business registration and compliance. Additionally, fostering genuine relationships with Thai shareholders can provide valuable insights and enhance the overall success of foreign business endeavors in Thailand.
Navigating the Thai market requires a strategic approach that emphasizes compliance with local laws and regulations surrounding nominee shareholding. Foreign investors should stay alert and flexible. They need to adjust to the rules and laws in Thailand. This will help ensure their business practices follow Thai legal standards. Foreign investors can reduce risks and find growth opportunities in Thailand. They can do this by understanding proper shareholding structures and working well with Thai nationals.
Update (in force 1 August 2026): The Order of the Central Partnership and Company Registrar No. 2/2569 now governs. Clause 1 of that order expressly repealed both Order 1/2569 and Order 2/2568 with effect from 1 August 2026. Under clause 4, a company whose authorized directors are all Thai, and which then registers a foreigner as an authorized or co-signing director, must file an Investment Confirmation Letter on the form annexed to the order. That closes the previous “loophole” where companies were incorporated as 100% Thai and then amended later to avoid scrutiny.
It bites on new registrations and on amendment filings in two situations: where a foreign shareholder or partner holds less than 50% of the registered capital, and where there is no foreign shareholder at all but a foreign director holds sole or joint signing authority. That second limb catches companies their owners assume are outside the rules entirely.
On establishment (clause 3), three documents are required:
- For each Thai shareholder or partner, bank statements covering the three months preceding the payment, showing withdrawals that match the contribution.
- A statement of the receiving account of the managing partner or director, showing the money arriving from every shareholder. This is what closes the recycled-funds loophole.
- The prescribed Investment Explanation Letter, tracing the flow of funds.
On an amendment admitting a foreign partner or foreign authorised director (clause 4) the filing is a different document, the Investment Confirmation Letter. Only where that amendment comes within one year of incorporation (clause 5) is a bank statement added, showing that the entity received its full subscribed capital.
Order No. 2/2569 prescribes documents and payment evidence. It does not itself state that every mismatch must lead to outright rejection without an opportunity to correct the filing. Reconcile the records before submission and respond to any registrar query. Read the order and prescribed forms.
Supreme Court Decisions on Nominee Shareholders and Foreign Land Ownership in Thailand
At ThaiLawOnline, we regularly advise clients about the legal risks of using nominee shareholders in Thailand. The law on this issue is clear, even though the reported case law is thinner than many sites suggest: a structure designed to conceal foreign ownership of land through Thai “nominees” breaches the Land Code, the agreement behind it is void, and both sides commit offences. The Supreme Court decision this page relies on, discussed below, also shows that the consequences are not always the simple ones people expect.
Under Thai law, foreigners are generally prohibited from owning land (Land Code Section 86). Some people try to get around this by setting up a Thai company. They make it look like it is mostly Thai-owned. Thai nationals hold 51% or more of the shares. If the Thai shareholders are acting as nominees, they hold shares for a foreigner. This foreigner provides the funds and controls the company. In this case, the true ownership belongs to the foreigner. This violates the law.
The Court Focuses on Substance Over Form
The Thai Supreme Court looks past the paperwork to what the arrangement actually does. Where the money and the control come from a foreigner, a Thai name on a share register or on a title deed does not change the analysis. It is worth naming the provisions separately, because they do different jobs:
- Land Code section 86 is the prohibition. Apart from the investment route in section 96 bis, a foreigner may acquire land only under a treaty allowing it and, subject to section 84, only for residence or defined commercial, industrial, agricultural, burial, charitable or religious purposes on the conditions set by ministerial regulation and with the Minister’s permission.
- Land Code section 96 is the nominee provision, and it is specific: where a person acquires land as owner on behalf of a foreigner, or of a juristic person treated as foreign under section 97 or 98, the Director-General of the Department of Lands has power to dispose of that land.
- Land Code section 94 supplies the timetable that section 96 borrows. Land acquired unlawfully or without permission must be disposed of within a period fixed by the Director-General, not less than 180 days and not more than one year, and if it is not, the Director-General may dispose of it.
- Section 150 of the Civil and Commercial Code voids any juristic act whose object is expressly prohibited by law, or is impossible, or is contrary to public order or good morals. That is what makes the contract behind the structure worthless, not merely unenforceable.
In Supreme Court Decision No. 2690/2538 a foreigner had a Thai national hold the title deed to land on his behalf, and the Court said that arrangement was void under section 86 of the Land Code. The important part is what the Court did not hold. Section 94 requires a foreigner who has acquired land unlawfully to dispose of it within a period fixed by the Director-General of the Department of Lands, not less than 180 days and not more than one year, failing which the Director-General may sell it. Because that machinery exists, the Court said in terms that the acquisition was not wholly void and still had legal effect. The foreigner did lose the land, but for a narrower reason than any general rule about foreigners: a third party had taken a registered transfer in good faith and for value, and under section 806 of the Civil and Commercial Code a principal who lets his agent appear to the world as the owner cannot defeat the rights such a person acquired before learning of the agency.
Enforcement at first instance has moved the same way, with prosecutions reported in Phuket in 2024 in which foreign owners and their Thai nominees were fined and given suspended prison terms over nominee land holding. Read those reports as evidence of enforcement rather than as authority: judgments of the provincial and criminal courts are not published in any citable series, so a red case number circulating online cannot be checked against anything, and nothing on this page rests on one.
What is citable is the penalty. Section 36 of the Foreign Business Act B.E. 2542 reaches both sides of the arrangement, the Thai national or non-foreign juristic person who holds shares for a foreigner so the foreigner can carry on a business the Act restricts, and the foreigner who consents to it. It carries imprisonment of up to three years, or a fine of 100,000 to 1,000,000 baht, or both. The court must also order the shareholding, the partnership or the assistance to end, and if that order is disobeyed the fine runs at 10,000 to 50,000 baht for every day the breach continues.
Legal Consequences of Nominee Use in Thailand
- Void Agreements: The agreement behind a nominee arrangement is void under section 150 of the Civil and Commercial Code. The land acquisition itself is not necessarily void: in Decision 2690/2538 the Court held it still had legal effect, because the Land Code’s disposal procedure deals with it instead.
- Forced Disposal: The Land Department may compel the sale of land held via nominee structures.
- Criminal Charges: Both the Thai nominee and the foreign investor may face fines and imprisonment.
Criminal Charges: These sit on top of the Foreign Business Act penalties above, which under section 36 are imprisonment of up to three years, or a fine of 100,000 to 1,000,000 baht, or both. Signing a false Investment Explanation Letter engages two further offences, and they are not the same size. Criminal Code Section 137, giving a false statement to an official where it is likely to cause injury, carries imprisonment of up to six months, or a fine of up to 10,000 baht, or both. Section 267, causing an official to record a false statement in an official document intended as evidence, is the heavier one at up to three years, or a fine of up to 60,000 baht, or both.
- Company Dissolution: Where the company is itself a foreigner under the Foreign Business Act and carries on a restricted business without a licence, the court sentencing it must also order the business to stop or the company to be wound up (section 37).
- Loss of Investment: Foreigners risk losing their entire investment in the property.
ThaiLawOnline: Legal Strategies That Work
At ThaiLawOnline, we have never had a client’s land deal or company structure canceled for using nominee shareholders. This is because we do not use them. We educate our clients and build their structures on solid legal ground. We help foreigners invest legally and safely in Thailand. This includes lease agreements, superficies, usufructs, and condominium ownership under the foreign quota.
Our team keeps up with the latest Supreme Court decisions and changing legal interpretations. If you’re thinking about acquiring property in Thailand, speak with us first. We’ll help you avoid costly mistakes and stay compliant with Thai law.
FAQs on Thai Nominee Shareholders
What is the use of Thai nominee shareholders in a company?
The use of Thai nominee shareholders involves appointing Thai nationals to hold shares on behalf of foreigners to circumvent foreign ownership restrictions in Thailand. This is often seen in sectors where foreign ownership is limited under the Foreign Business Act.
How does the Department of Business Development define a foreigner in the context of company ownership?
The definition is in section 4 of the Foreign Business Act, and it has four limbs, not one: a natural person without Thai nationality; a juristic person not registered in Thailand; a juristic person that IS registered in Thailand but has half or more of its capital shares held by, or half or more of its capital invested by, persons in either of the first two limbs, or a registered partnership whose managing partner is a foreign individual; and a Thai-registered juristic person half held or half funded by persons in any of the first three limbs, which catches layered holding companies. It is the third and fourth limbs that makes a Thai-registered company count as a foreigner, and it is the reason nominee shareholding is attempted at all.
What is a nominee company?
A nominee company is a business that uses Thai nominee shareholders. These shareholders represent foreign investors. It is an attempt to get around the legal limits on foreign ownership, and it is an offence under section 36 of the Foreign Business Act.
What are the legal implications for shareholders in a Thai company who are involved in a nominee arrangement?
Shareholders in nominee arrangements may face legal issues and penalties. These arrangements often try to avoid Thai laws on foreign ownership limits. The Thai authorities have intensified efforts to crack down on such practices.
What constitutes a majority Thai owned company?
A majority Thai owned company is one where more than 50% of the shares are owned by Thai nationals. This structure is significant as it determines the level of foreign participation allowed in specific business sectors.
Can a partly foreign owned Thai limited company legally use nominee shareholders?
No. While a company can be partly foreign-owned, using Thai nationals to “hold” shares for a foreigner is a criminal offense. As of 2026, the DBD requires a 3-month bank statement history for Thai shareholders to prove the investment came from their own savings and not as a temporary loan from the foreigner.
What are the ownership restrictions for a foreign owned Thai limited company under the Foreign Business Act?
The Foreign Business Act does not require Thai nationals to hold any particular percentage. What it does is define a company as a foreigner when foreigners hold half or more of its shares, and then prohibit foreigners outright from List 1 businesses and restrict List 2 and List 3 businesses to foreigners who hold a licence, a Foreign Business Certificate or a Board of Investment promotion. Keeping Thai holdings above half is simply how a company stays outside that definition; it is a consequence of section 4, not a rule imposed by the Act, and a company may be wholly foreign owned if it does not carry on a listed business or if it is properly licensed.
How does the Land Code impact foreign ownership in Thailand?
Section 86 of the Land Code prohibits a foreigner from acquiring land except under a treaty or on the limited statutory routes it allows. It does not permit, and certainly does not require, the use of a Thai nominee. Holding land in a Thai name to get around section 86 is the arrangement the courts strike down, and section 96 then gives the Director-General of the Department of Lands power to dispose of land acquired by someone as owner on behalf of a foreigner or of a juristic person treated as foreign under section 97 or 98, on the section 94 timetable of not less than 180 days and not more than one year.
What role does the Board of Investment play in the use of Thai nominee shareholders?
BOI promotion is one lawful route for foreigners to own and control a business in a restricted sector without a Thai partner; the others are a Foreign Business Licence and a Foreign Business Certificate under a treaty such as the US Treaty of Amity. A majority foreign-owned BOI company also falls outside the anti-nominee screening in Order 2/2569, which applies where foreigners hold less than half of the capital, or hold none but a foreign director has sole or joint signing authority.
Why is the nominee problem a concern for the Thai government?
The nominee problem is a concern. It weakens Thai ownership laws and can allow foreign control over important sectors. The government seeks to ensure compliance with ownership restrictions to protect the economy.
Links:
- DBD
- The 2026 DBD regulatory reforms explained, the January, April and August 2026 orders in sequence, including the April in-person rule that was repealed on 1 August 2026
Last reviewed: 8 September 2026. Further corrected 4 October 2026: passages that presented nominee use as workable, including one advising a written nominee agreement, now say plainly that it is an offence; the ‘any nominee arrangement is void’ line was aligned with Decision 2690/2538; and a FAQ that called BOI the only lawful route now names the licence and treaty certificate routes too. Section 4 and section 36 of the Foreign Business Act B.E. 2542 were read in Thai from the primary text, including the definition of a foreigner in its four limbs and the disjunctive penalty of imprisonment of up to three years or a fine of 100,000 to 1,000,000 baht or both. Sections 86, 94 and 96 of the Land Code were checked against this firm’s verified reference copy of the Code, the Land Code being published in no database we can query directly. Supreme Court Decision 2690/2538 was read in full in Thai to its disposition, and this page’s account of it is accurate, including that the acquisition was held not to be wholly void and that the third party was protected under section 806 of the Civil and Commercial Code. The Orders of the Central Partnership and Company Registrar numbered 2/2569, 3/2568 and 4/2568 were checked against the Royal Gazette published order held by this firm, including that Order 2/2569 came into force on 1 August 2026 and repealed Orders 2/2568 and 1/2569. Every link on this page was confirmed to resolve. Not verified: the daily fine for continuing a breach after a court order, and the reports of prosecutions in Phuket, which this page already and rightly presents as evidence of enforcement rather than as authority, because judgments of the provincial courts are not published in any citable series. Re-checked on 10 October 2026: Decision 2690/2538 re-read in Thai, and the opening of its paragraph corrected to say the Court held the nominee arrangement void under section 86 while holding the acquisition not wholly void; an introduction that described consistent Supreme Court rulings was reworded to rest on the one decision cited; the company dissolution point now cites section 37 of the Foreign Business Act, read in Thai.
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