This guidance is intended for foreign nationals and Thai nationals who are the subject of a formal investigation into alleged nominee shareholding arrangements. Such investigations are conducted under the Foreign Business Act B.E. 2542 (1999) and, increasingly, in coordination with the Anti-Money Laundering Office.

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Nature of the allegations

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A nominee shareholder arrangement occurs when a Thai individual or legal entity holds shares in a company on behalf of a foreign investor. The purpose of such an arrangement is to enable the foreign investor to own and operate a business in a sector that is reserved for Thai nationals under Thai law. In a nominee structure, the Thai shareholder acts as a passive figurehead. The foreign investor retains actual control, makes all operational decisions, and receives the business's economic benefits. Such arrangements are expressly prohibited by the Foreign Business Act. The Land Code also forbids any attempt by a foreigner to use Thai proxies to hold land titles.

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As of 2025, Thai authorities have initiated over 29,000 legal cases and prosecuted 852 companies for nominee-related offences. Estimated damages exceed THB 15.1 billion. The Department of Business Development has targeted 46,918 registered entities for inspection across six high-risk industries: tourism, real estate, e-commerce and logistics, hotels and resorts, agriculture, and construction.

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Key government agencies involved

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Several government agencies now work in a coordinated manner to identify, investigate, and prosecute nominee arrangements.

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Department of Business Development (DBD): This agency is responsible for corporate registration and maintains the central database of juristic persons. The DBD integrates its data with the Revenue Department to cross-reference corporate filings with tax records. This system exposes financial inconsistencies that may indicate nominee use.

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Department of Special Investigation (DSI): The DSI handles complex or high-impact nominee cases. It possesses broad investigative powers, including the authority to conduct raids, seize evidence, and obtain arrest warrants from the Criminal Court.

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Anti-Money Laundering Office (AMLO): The DBD and AMLO have jointly proposed amendments to the Anti-Money Laundering Act B.E. 2542 (1999). Under the proposed revisions, the use of or participation in nominee arrangements would be classified as a predicate offence to money laundering. If enacted, this would allow the government to seize or freeze assets held by both Thai nominees and their foreign beneficiaries. The public consultation period for this draft concluded on 25 April 2025.

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Economic Crime Suppression Division (ECD): This division of the Royal Thai Police conducts raids, makes arrests, and prosecutes economic crimes, including nominee offences.

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Immigration Bureau: This agency may revoke visas or permits and initiate deportation proceedings against foreign nationals who violate foreign ownership laws.

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The investigation process

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3.1. Initiation of investigation

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Investigations may be triggered by multiple sources. Whistleblower complaints from disgruntled employees, business competitors, or local residents can initiate an inquiry. DBD data analytics that flag high-risk corporate structures can also trigger an investigation. Referrals from other government agencies, such as the Revenue Department or the Tourist Police, may prompt an investigation. Finally, random targeted inspections of high-risk sectors are increasingly common.

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3.2. Signs that your company is under scrutiny

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You may become aware of an impending investigation through several indicators.

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• Receipt of Formal Notices or Summons: Authorities may request shareholder documents, financial statements, or written explanations of your ownership structure. Any direct communication from regulators concerning nominee or foreign ownership issues should be taken seriously and responded to promptly under legal counsel guidance.
• Unexpected Inspections or Interviews: Officials may appear for surprise inspections at your business premises or request interviews with your Thai shareholders and directors. Investigators may visit to verify who is actually in charge of the day-to-day operations. Thai partners may be called in for questioning to determine whether they possess genuine knowledge of the business and have a real financial stake.
• Bank or Tax Authority Inquiries: Questions from banks or tax authorities regarding financial transactions between Thai and foreign shareholders or the absence of dividend payments to Thai owners may indicate that your matter has been flagged for investigation.
• Whistleblower Activity: If you become aware of complaints or unusual questions being asked about your ownership structure, this may precede an official probe.

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3.3. Formal investigation procedures

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Once an investigation commences, authorities may take the following actions.

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• Document Review: Investigators will examine shareholder lists, company affidavits, share certificates, and bank statements. They will look for inconsistencies, unexplained capital flows, or irregular payment structures.
• Financial Analysis: Authorities will review bank statements of Thai shareholders to verify genuine capital contributions. Under DBD Order No. 2/2568, which took effect on 1 January 2026, Thai shareholders in companies with foreign involvement must provide personal bank statements covering the three months prior to the share payment date. The statement must clearly show a withdrawal or transfer matching the number of shares subscribed. A simple bank balance certificate is no longer sufficient.
• Interviews and Interrogations: Thai shareholders and directors may be called for formal interviews. Investigators will assess whether these individuals understand the business operations and have made genuine financial contributions. Passivity or ignorance is treated as a critical red flag.
• Site Inspections: Unannounced visits to business premises may be conducted. Investigators will observe daily operations and identify who exercises actual control.
• Search and Seizure: In serious cases, the DSI may obtain search warrants from the Criminal Court and seize documents, computers, and other evidence from business premises or related locations.

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3.4. Arrest and prosecution

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Upon gathering sufficient evidence, authorities may seek arrest warrants from the Criminal Court. Foreign nationals may be taken into custody and held for questioning. Thai nominees may also be arrested. The case file will then be submitted to the public prosecutor for indictment. A recent DSI case involving nominee shareholding in a construction company comprised 17,620 documents in 46 case files.

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Legal consequences and penalties

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The penalties for nominee shareholding are severe and apply to both the foreign beneficiary and the Thai nominee.

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• Criminal Penalties under Section 36 and Section 37 of the Foreign Business Act: A Thai national who acts as a nominee for a foreigner faces imprisonment of up to three years, a fine ranging from 100,000 to 1,000,000 baht, or both. A foreigner who operates a business using Thai nominees faces the same penalties.
• Company Dissolution: The court may order the forced dissolution of the offending company.
• Deportation and Blacklisting: Foreign nationals convicted of non-nominative offences may be deported and barred from re-entry to Thailand.
• Asset Forfeiture and Seizure: Under the proposed amendments to the Anti-Money Laundering Act, nominee offences would become predicate offences for money laundering. This would allow AMLO to freeze or seize assets acquired through illegal nominee arrangements, including assets held by Thai nominees and their foreign beneficiaries.
• Daily Fines for Continuing Violations: Failure to comply with a court order to cease nominee arrangements may result in daily fines ranging from 10,000 to 50,000 baht.
• Professional Consequences for Service Providers: Lawyers, accountants, and other professionals who facilitate nominee structures face criminal prosecution, fines, imprisonment, and potential license revocation.

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Media illustrations of penalties

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Case 1: Phuket Nominee Network (2024-2025). The DSI investigated a law and accounting firm in Phuket that had facilitated nominee arrangements for approximately 60 companies. The Criminal Court sentenced 23 defendants, including Thai nationals, foreigners, and legal entities, to 10 years' imprisonment. Because the defendants cooperated with officers and confessed, the sentence was reduced to five years, suspended for two years, with one year of probation. Each defendant was also fined 200,000 baht, and the companies involved were ordered dissolved. The government estimated annual tax losses from nominee-share transfers in the billions of baht.

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Case 2: China Railway No. 10 (Thailand) (2025). Following the collapse of the State Audit Office building during an earthquake, the DSI discovered that three Thai nationals had been used as proxy shareholders for a Chinese state-owned enterprise. The Thai nominees were former manual labourers whose financial means could not support multimillion-baht shareholdings. Financial records revealed transactions exceeding 2 billion baht linked to loans involving Chinese executives. Arrest warrants were obtained for four individuals, and the DSI submitted a case file comprising 17,620 sheets of paper to prosecutors.

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Case 3: Chinese Backed Shell Companies (2025). The Central Investigation Bureau dismantled 15 companies operating as nominees for Chinese investors. Authorities arrested 21 Chinese nationals and 51 Thai nationals. The scheme involved an accounting firm that used its staff members and their families as shareholders in numerous Chinese-owned companies. The accounting firm was actually controlled by a Chinese investor operating from China.

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Case 4: Koh Phangan Accounting Firm (2025). DBD inspections found an accounting firm where a single individual was listed as a shareholder in 66 companies. The same address was registered as the location for 89 business entities, many of which showed no signs of active operations. Documents and computers were seized, and the firm was ordered to submit additional documents for examination.

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Case 5: Chon Buri Property and Tourism Companies (2026). Authorities ordered the closure of four companies suspected of using Thai nominee shareholders. A single Thai national was reportedly linked to more than 100 companies representing investments exceeding 300 million baht. Licenses for tour operators were revoked for failing to meet statutory director requirements. More than 100 additional entities were flagged for further review.

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Legal rights of the accused

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Persons accused of non-nominal offences are afforded due process rights under Thai law. These rights include the right to remain silent, the right to legal counsel, the right to a trial, and the right to appeal trial court determinations.

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If you are arrested, you have the right to be informed of the charges against you, to communicate with a lawyer, and to request bail. In the China Railway case, the three Thai nominees surrendered voluntarily, and their lawyer immediately sought their release on bail from the DSI.

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You are not required to answer investigators' questions without your lawyer present. Any statements you make may be used as evidence against you. Confessions, while potentially leading to reduced sentences as illustrated in the Phuket case, should only be made on the advice of qualified legal counsel.

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You have the right to present evidence and witnesses in your defence at trial. The court must consider all evidence before rendering a judgment.

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Mitigation strategies and legal defences

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7.1. Immediate actions upon receiving notice of investigation

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Take the following steps immediately upon becoming aware of an investigation.

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• Engage Qualified Legal Counsel Immediately. Do not communicate with investigators without speaking with your lawyer. Your lawyer will advise you on your rights, assist in preparing responses to authorities, and represent you in all proceedings. Do not engage with “legal consultants” or “fixers” as these individuals may compound any issues and seldom lead to satisfactory outcomes.
• Preserve All Documents. Do not destroy or alter any corporate documents, financial records, bank statements, or correspondence. Destruction of evidence may lead to additional charges.
• Do Not Contact Thai Shareholders Without Legal Advice. Any communication with Thai nominees or directors may be perceived as an attempt to coordinate false testimony. Your lawyer will advise you on the correct process.
• Conduct an Internal Fact-Finding Review. Under legal privilege, your lawyer will help you review the corporate structure, identify potential red flags, and assess your legal exposure.

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7.2. Potential legal defences

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Several defences may be available depending on the circumstances of your case.

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A. Genuine Joint Venture Defence: If the Thai shareholders are genuine business partners who have made real capital contributions, possess industry expertise, participate actively in management, and receive proportional profit distributions, the arrangement may not constitute a nominee structure. Documentary evidence of capital contributions, dividend payments, and management participation is essential.

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B. Lack of Knowledge or Intent: If you can demonstrate that you lacked knowledge of the nominee arrangement or did not intentionally circumvent Thai law, this may be a defence. However, ignorance is generally not accepted as a defence where the true ownership structure is readily apparent.

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C. Statute of Limitations: Offences under the Foreign Business Act may be subject to prescription periods. However, under the proposed AML amendments, predicate offences would have a 15-year prescription period from the date the offence was committed.

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7.3. Cooperation as a mitigating factor

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Thai courts have consistently reduced sentences for defendants who cooperate with authorities. In the Phuket case, the initial sentence of 10 years imprisonment was reduced by half because the defendants confessed and had no prior criminal record. However, any decision to cooperate must be made on the advice of legal counsel. Confessions are admissible in evidence and may have consequences beyond the immediate case, including potential asset forfeiture and immigration consequences.

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Proactive restructuring of legitimate operations

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If you are not yet under investigation but have concerns about your corporate structure, proactive remediation is strongly advised.

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• Assess eligibility for BOI promotion or IEAT permission. These routes can provide legal authorisation for 100 per cent foreign ownership in qualifying sectors.
• Assess eligibility under treaty protections. Nationals of treaty partner countries may be exempt from foreign business license requirements.
• Apply for a Foreign Business License. For restricted activities under the Foreign Business Act, obtaining a license legally authorises a foreign majority company to operate in Thailand.
• Restructure with genuine Thai partners. If you choose to have Thai shareholders, ensure they are genuine business partners contributing real capital, assets, or expertise. Conduct thorough due diligence on prospective Thai partners and clearly document all contributions and profit-sharing arrangements.

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Risk factors that trigger investigation

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Thai authorities assess both documentary evidence and circumstantial factors to determine whether a company is engaged in a nominee structure. The following indicators are commonly reviewed.

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• Unusual shareholding ratios. A foreign investor holding just under 49 per cent, with the remaining 51 per cent held by Thai individuals with low profiles, is a frequent red flag. Authorities now scrutinise any foreign shareholding between 1 per cent and 49.99 per cent across high-risk sectors.
• High-risk business sectors. The six high-risk sectors identified by the DBD are tourism, real estate, e-commerce and logistics, hotel and resort operations, agriculture, and construction.
• Lack of economic substance among Thai shareholders. Indicators include the absence of real capital contributions, no record of dividend income or profit participation, and no risk bearing by the Thai shareholder.
• Absence of participation in management or decisions. If Thai shareholders or directors do not participate in business decisions and defer entirely to foreign principals who exercise control over banking, contracts, and operations, this strongly suggests a nominee structure.
• Financial inconsistencies. Thai shareholders who lack proof of capital sources or have no declared dividend income in tax records commensurate with their shareholding will attract scrutiny.
• Excessive nominee relationships. A single Thai individual serving as a shareholder in dozens of companies is a clear red flag. In the Koh Phangan case, one individual was listed as a shareholder in 66 companies. In the Chon Buri case, one Thai national was linked to more than 100 companies.

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Practical recommendations for persons under investigation

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Do not ignore formal notices or assume that the matter is routine. Prompt action is essential.

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Do not destroy or alter any documents. Disposal of evidence is a separate criminal offence.

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Do not attempt to contact Thai shareholders to coordinate their testimony. Such conduct may be construed as witness tampering or conspiracy.

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Do not make statements to investigators without your lawyer present. Anything you say can and will be used against you.

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• Do not attempt to transfer assets or move funds offshore while under investigation. Such actions may trigger asset-freezing orders under anti-money-laundering laws.
• Do not assume that voluntary departure from Thailand will resolve the matter. Arrest warrants may be issued, and extradition proceedings may follow.
• Do cooperate fully with your legal counsel. Provide complete and truthful information to your lawyer so that an effective defence strategy can be developed.
• Do respond to formal notices in a timely manner through your lawyer. Failure to respond may be treated as an admission or may result in adverse inferences.
• Do preserve documentary evidence of genuine capital contributions, profit distributions, management participation, and any lawful exemptions or licenses.
• Do ensure that you and your family members have valid immigration status and do not overstay any visas. Overstayers are subject to detention and deportation with heightened risk of being barred from re-entry.
• Do keep your lawyer informed of any new developments, including any communications from authorities, banks, or officials.

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Conclusion

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Thailand has entered an era of unprecedented enforcement against nominee shareholding arrangements. As of 2025, over 29,000 cases have been initiated, 852 companies are facing prosecution, and proposed amendments to anti-money laundering laws will permit the seizure and freezing of assets. The coordinated efforts of the DBD, DSI, AMLO, and ECD have substantially increased the likelihood of detection. Thai courts have demonstrated a willingness to impose severe penalties, including imprisonment, fines, company dissolution, and deportation.

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If you are under investigation, immediate engagement of qualified Thai legal counsel is essential. Your lawyer will advise you on your rights, assist in navigating the investigative process, develop an appropriate defence strategy, and represent you in all proceedings. While the consequences of a nominee offence are serious, accused persons retain due process rights, including the right to a fair trial and the right to appeal.

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The best protection against investigation remains proactive compliance. Foreign investors should structure their businesses using legitimate alternatives such as BOI promotion, treaty protections, foreign business licenses, or genuine Thai partnerships. Companies currently using nominee structures are strongly urged to regularise their operations without delay.

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Disclaimer: This guidance provides general information only and does not constitute legal advice. Laws and enforcement practices may change. Persons under investigation should seek advice from a qualified Thai lawyer regarding their specific circumstances.

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