In April 2026, new requirements introduced by Thailand’s Department of Business Development (DBD) came into force, aimed at strengthening oversight of companies with foreign participation. The changes were implemented pursuant to Order No. 1/2569 of the Central Registration Office for Partnerships and Companies, which introduced a new mandatory document — the Investment Confirmation Statement.

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At first glance, these changes appear procedural and apply only to certain registration actions, such as amendments to a company’s corporate structure or the appointment of a foreign director with signing authority. However, a closer analysis reveals a much deeper transformation in the Thai regulator’s approach to assessing foreign participation in business activities.

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In practice, the DBD is moving away from the traditional ownership-structure analysis, which for many years was based primarily on the formal shareholding ratio between Thai and foreign participants, toward an assessment of the actual control exercised over a company. This approach reflects a broader global trend of strengthening measures against nominee arrangements, where formal compliance with legal ownership requirements does not necessarily reflect the true allocation of managerial and economic control.

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1. Nature, legal character, and practical significance of written confirmation of investment (Investment Confirmation Statement).

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In 2026, Thailand significantly strengthened its oversight of companies with foreign participation. Following the entry into force of DBD Order No. 1/2569, registrars were granted the authority to examine not only a company's formal ownership structure, but also the sources of funding of Thai shareholders, their financial capacity, and the actual distribution of control within the business. A key innovation was the introduction of the mandatory Written Confirmation of Investment, along with supporting documents evidencing the origin of funds contributed by Thai participants. In practice, this represents a shift from a formal shareholding test to an Actual Control Test, making it considerably more difficult to use nominee structures to circumvent the restrictions imposed under the Foreign Business Act.

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One of the key innovations introduced by the Order of the Central Partnership and Company Registration Office No. 1/2569 is the mandatory Written Confirmation of Investment (also referred to as the Investment Confirmation Statement). Its submission has become a new requirement in connection with certain corporate changes involving companies with a foreign element.

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What is a written confirmation of investment?

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A Written Confirmation of Investment is a written declaration signed by persons associated with the company to confirm the actual making of an investment and the lawful origin of the funds used to acquire shares in the company. The document is intended to confirm that the Thai shareholders are genuine investors rather than nominee shareholders who formally hold shares on behalf of foreign individuals.

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In essence, the regulator requires applicants to confirm that the ownership structure reflects the real economic substance of the relationship between the company's participants.

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Why was this requirement introduced?

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The introduction of the Written Confirmation of Investment forms part of a broader government policy aimed at combating so-called nominee arrangements — structures in which Thai nationals formally hold a controlling shareholding solely to circumvent the restrictions established under the Foreign Business Act B.E. 2542 (1999).

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For many years, regulatory review primarily focused on analyzing the formal shareholding ratio between Thai and foreign participants. The new system is designed to determine who actually financed the company, who exercises control over the business, and who ultimately receives the economic benefits derived from its operations.

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In what cases must it be submitted?

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Pursuant to Order No. 1/2569, the document is required, among other cases, when:

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• appointing a foreign director with authority to sign on behalf of the company;
• making changes to the board of directors;
• changing the shareholder structure;
• implementing other corporate changes that may indicate an increase in foreign influence over the management of the company.

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Accordingly, a change in director or shareholder composition alone may warrant additional scrutiny regarding the source of investment funds and actual control over the company.

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Where must the document be submitted?

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The Written Confirmation of Investment must be submitted to the Department of Business Development (DBD) together with the required documents for the relevant registration action. The registrar is authorized to review the content of the declaration and, where necessary, request additional supporting documentation concerning the source of funds or the company's control structure.

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The legal basis for the introduction of the Written Confirmation of Investment consists of Order of the Central Partnership and Company Registration Office No. 1/2569 (2026), which entered into force on 1 April 2026, and the Foreign Business Act B.E. 2542 (1999), which prohibits the use of nominee shareholders to circumvent restrictions on foreign ownership of businesses in Thailand.

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At the same time, the Order itself does not amend the provisions of the Foreign Business Act but effectively creates a new mechanism for verifying compliance with the Act during the corporate registration process.

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The key feature of the new requirement is that, for the first time, the regulator has begun systematically reviewing not only a company's formal ownership structure but also its economic substance. The Written Confirmation of Investment has become one of the tools facilitating the transition from a traditional shareholding analysis to the Actual Control Test, under which the decisive factor is not who legally owns the shares, but who actually controls the business.

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For this reason, the introduction of this document may be regarded as the first practical step towards strengthening oversight of companies with foreign participation and combating the use of nominee shareholders in Thailand.

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2. Content of the Written Confirmation of Investment

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The Written Confirmation of Investment is intended to provide the Department of Business Development (DBD) with sufficient information to assess whether the company's shareholding structure reflects a genuine investment relationship and complies with Thai law on foreign participation in business activities.

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Although the document is not intended as a comprehensive due diligence report, it requires the declarants to formally confirm several key facts regarding the company's investment and ownership structure.

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In particular, the declaration generally includes information regarding:

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• the identity of the shareholders participating in the investment;
• the amount of capital contributed by each shareholder;
• the source of funds used for the acquisition of shares;
• confirmation that the investment was made using the shareholder's own funds;
• confirmation that the shareholder is not holding shares on behalf of another person;
• confirmation that no nominee arrangement exists between Thai and foreign participants;
• confirmation that the shareholding structure complies with applicable Thai laws and regulations.

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The declaration is typically executed by the relevant shareholders and/or company representatives and submitted together with the corporate filing that triggered the reporting requirement.

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From a practical perspective, the most significant element of the Written Confirmation of Investment is the express confirmation regarding the origin of investment funds and the absence of nominee relationships. By requiring such declarations, the DBD creates a documentary basis for subsequent regulatory review and potential enforcement actions when inaccurate or misleading information is provided.

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As a result, the Written Confirmation of Investment serves not merely as an administrative filing but also as a compliance instrument aimed at increasing transparency into the ownership and control of companies operating in Thailand.

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3. Transition from formal ownership to assessment of actual control

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The most significant change arising from DBD Order No. 1/2569 and the related enforcement practice is the gradual shift from analyzing a company’s formal ownership structure to assessing actual control over the business.

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Traditionally, when evaluating a company’s compliance with the Foreign Business Act, primary attention was given to the shareholding structure. If Thai nationals formally held more than 50% of the company’s shares or equity interests, such a structure was generally considered compliant with the legal requirements. This approach may be referred to as the Ownership Test or the formal ownership test.

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However, in practice, a formal ownership structure does not always reflect the actual distribution of powers and economic interests within a company. For this reason, regulators are increasingly focusing on the Actual Control Test, which seeks to determine who effectively controls the company’s operations, regardless of the formal allocation of shares.

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Under this approach, not only the number of shares held by a particular person may be relevant, but also a combination of other circumstances indicating actual influence over the business.

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In particular, the following factors may be considered when assessing actual control:

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• sources of funding for the company’s registered capital;
• the person who actually provided the funds for the investment;
• the powers of directors and officers;
• the existence of exclusive signing authority on behalf of the company;
• the decision-making process for corporate matters;
• the existence of shareholder agreements relating to company management;
• the actual distribution of profits and economic benefits;
• The degree of involvement of shareholders in managing the business.

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In essence, regulators seek to determine not only who legally owns the company, but also who makes key decisions regarding its operations and who receives the principal benefits from its activities.

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For example, if Thai shareholders formally hold 51% of a company’s shares, but their contributions are financed by a foreign investor and all management decisions are made by a foreign director or shareholder, such a structure may raise additional concerns for regulators, even if the formal ownership requirements are satisfied.

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This is the fundamental distinction between the Ownership Test and the Actual Control Test. While the former focuses on legal form, the latter analyzes the business's economic substance and actual operational structure.

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Although the Foreign Business Act continues to rely on ownership criteria to determine whether a company is foreign, recent regulatory developments indicate that Thai authorities intend to expand their supervisory tools and place greater emphasis on the actual circumstances surrounding investments and corporate governance.

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Accordingly, the introduction of the Written Confirmation of Investment requirement and enhanced scrutiny of investment funding sources may be viewed as practical mechanisms for implementing the Actual Control Test concept within Thai corporate practice.

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4. Practical implications for businesses

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The introduction of the Written Confirmation of Investment requirement and the growing emphasis on the Actual Control Test signal a broader shift in the regulatory approach of Thai authorities towards companies with foreign participation.

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From a practical perspective, businesses can no longer rely solely on formal compliance with shareholding thresholds under the Foreign Business Act. Increasingly, companies must be prepared to demonstrate that their ownership structure reflects genuine investment relationships, that Thai shareholders have independently funded their investments, and that the allocation of management powers corresponds to the declared corporate structure.

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For existing businesses, these changes mean that corporate actions previously regarded as routine — such as appointing directors, transferring shares, or restructuring ownership — may now attract greater regulatory scrutiny. For new investors, the changes highlight the importance of carefully structuring investments, maintaining documentary evidence of funding sources, and avoiding arrangements that could be interpreted as nominee structures.

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Ultimately, while DBD Order No. 1/2569 does not introduce new foreign ownership restrictions, it significantly strengthens the mechanisms available to regulators for verifying compliance with existing rules. As a result, transparency, substance, and demonstrable economic reality are becoming increasingly important elements of doing business in Thailand.

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