The Department of Business Development (DBD) at Thailand’s Ministry of Commerce is preparing to implement enhanced measures aimed at preventing the registration of juristic persons using Thai nationals as nominee shareholders for foreign business operators. Director-General Poonpong Naiyanapakorn announced that the department convened a high-level meeting with representatives from 17 leading law firms on Monday, March 9, 2026, to gather insights and recommendations for strengthening the regulatory framework governing corporate registrations involving foreign participation.
The brainstorming session was designed to collect professional opinions on proposed amendments that would close existing loopholes and address what authorities describe as a persistent threat to Thailand’s economic structure. According to DBD statistics, out of 782,542 active companies currently operating in the kingdom, approximately 118,016 involve foreign investment at levels between 0.01 and 49.99 percent. Officials estimate that more than 80 percent of these entities may involve Thai nationals holding shares in a nominee capacity for foreign interests.
Background and Regulatory Context
The current initiative builds upon previous enforcement efforts, including DBD Order No. 2/2568, which took effect on January 1, 2026. That regulation introduced requirements for Thai shareholders to submit bank statements demonstrating genuine financial capacity and traceable fund sources when participating in companies with foreign shareholders holding less than 50 percent of shares or where foreign nationals are authorized signatories despite all-Thai shareholding structures. The DBD reports that this measure alone reduced nominee registration attempts by approximately 65 percent, though officials acknowledge continued attempts at circumvention.
The proposed regulatory expansion comes amid active investigations into suspected nominee arrangements across multiple business sectors. In early March 2026, the DBD identified 15 fruit-packing companies suspected of using Thai nominee shareholders, with 11 located in Ratchaburi province and others in Samut Prakan, Pathum Thani, Samut Sakhon, and Bangkok . These cases have been referred to the Central Investigation Bureau, the Department of Special Investigation, and the Anti-Money Laundering Office for further action. Investigators identified approximately 10 Thai nationals believed to be acting as nominee shareholders or directors, with some companies operating for five to six years while others were recently established.
Proposed Regulatory Framework
The forthcoming measure, formally titled the “Draft Order of the Central Partnership and Company Registration Office No. …/2569 on Criteria and Methods for Registration in Cases of Amendments Adding Foreigners as Partners in Partnerships or Adding Foreigners as Authorized Signatories in Limited Companies,” represents an escalation in the government’s enforcement approach. The regulation would subject amendment applications involving foreign participation to heightened scrutiny, requiring additional documentation and verification procedures beyond those already implemented for initial registrations.
The DBD’s consultation with legal professionals focused on gathering practical perspectives regarding implementation challenges, potential unintended consequences, and refinement of criteria to ensure the measure effectively targets nominee structures without impeding legitimate foreign investment. Participants examined the operational impact of existing requirements and suggested adjustments to the proposed framework before its expected issuance in mid-March 2026, with enforcement commencing 1 April, 2026.
Current Enforcement Landscape
The new measures operate within a broader interagency enforcement framework that has intensified throughout late 2025 and early 2026. The DBD has established real-time data integration with the Anti-Money Laundering Office, enabling immediate screening of shareholders and directors against AMLO databases. Where individuals appear on AMLO lists, registrars may require personal appearances, additional financial documentation, and proof of premises authorization before processing registrations.
Address verification has also emerged as a significant enforcement tool. Under existing regulations, when a proposed registered office already hosts five or more juristic persons, registrars may request consent letters from premises owners and documentation proving legal rights to use the address. This so-called “Rule of Five” directly affects virtual office arrangements and shared workspace registrations, requiring operators to demonstrate that locations can genuinely support business operations.
Recent investigations show the range of industries under scrutiny. Beyond the fruit-packing sector, authorities on Koh Phangan have been investigating luxury villa developments involving Ukrainian investors, where two companies with combined registered capital exceeding 100 million baht allegedly employed Thai nominee shareholders to circumvent foreign business restrictions. Such cases illustrate the DBD’s focus on tourism-related businesses, real estate, and service sectors historically vulnerable to nominee arrangements.
Legal Framework and Penalties
The enforcement actions derive their authority from the Foreign Business Act B.E. 2542 (1999), which provides the basis for clear liability for both parties in nominee arrangements. Section 36 targets Thai nationals or juristic persons acting as nominees, providing that any person assisting or supporting a foreigner in operating a restricted business, or holding shares on behalf of a foreigner, shall be subject to imprisonment not exceeding three years, a fine of 100,000 to one million baht, or both . Courts may additionally order cessation of such assistance or termination of shareholding arrangements.
Section 37 addresses foreign principals who operate businesses using Thai nominees, whether through shareholding arrangements or other similar methods designed to circumvent the Act. Foreign violators face identical penalties of up to three years imprisonment and fines ranging from 100,000 to one million baht. Where violations involve continuing non-compliance with court orders, offenders face daily fines of 10,000 to 50,000 baht until the violation ceases.
Thai Supreme Court decisions have reinforced these provisions. In Supreme Court Decision No. 17923/2557 (2014), involving land holdings on Koh Samui, the Court convicted a foreign defendant under Section 37 for using a Thai nominee and the Thai defendant under Section 36 for acting as nominee. Similarly, in Decision No. 5457/2560 (2017), the Court found that sham loan agreements designed to give foreigners control over Thai businesses constituted prohibited nominee arrangements.
Implementation and Compliance Considerations
The DBD emphasizes that enhanced measures aim to prevent illicit nominee structures while preserving Thailand’s attractiveness for legitimate foreign investment. Director-General Poonpong stressed that the consultation process seeks to balance effective enforcement against unnecessary regulatory burden, ensuring that compliance requirements do not unduly impede genuine business operations.
For foreign investors and their Thai partners, the evolving regulatory environment demands careful attention to documentation and structural transparency. Thai shareholders must be prepared to demonstrate genuine financial capacity, with bank statements showing three months of transaction history and clear evidence of fund transfers matching share subscription amounts. Where individuals lack apparent financial capacity compared to investment amounts, registrars may suspend applications pending more verification.
The practical implications extend beyond initial incorporation. Amendment applications, share transfers, and director appointments now face scrutiny comparable to new registrations. Companies operating with foreign participation should review existing structures for compliance and anticipate that regulatory attention will continue intensifying across all sectors.
Compliance and Legal Considerations for Foreign Investors
Thailand’s continued campaign against nominee shareholdings reflects the sustained commitment to protecting the integrity of its business registration system and ensuring fair competition for domestic enterprises. The combination of enhanced documentation requirements, interagency information sharing, and active investigation across multiple industries signals that authorities view nominee arrangements as a priority enforcement area.
With the new amendment regulation expected by mid-March 2026 and enforcement commencing 1 April, 2026, businesses and legal practitioners must prepare for continued evolution of the regulatory landscape. As the DBD shifts from form-based registration toward substance-based verification, transparency regarding ownership structures, funding sources, and business premises will prove essential for successful registration and ongoing compliance.
