A new draft regulation signals tighter scrutiny on existing companies adding foreign partners or directors, aiming to crack down on illegal nominee schemes.

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Thailand’s Department of Business Development (DBD) has officially opened a public consultation on a draft order that could significantly change the landscape for foreign investors. The focus? Increased scrutiny and mandatory checks when making corporate changes to partnerships and companies involving foreigners.

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Here is what you need to know:

• Not for New Registrations, But for Changes: The proposed rules primarily target existing corporate structures rather than initial business registrations. The red flag for the DBD is the addition of a foreign partner or an authorized foreign director to an already established Thai entity.
• Mandatory In-Person Explanations: Under the new draft, the registrar would have the authority to demand the personal appearance of the relevant Thai partners or directors. They would be required to present identification and provide formal explanations using a standardized form.
• The End of "Nominee" Schemes: This initiative is part of Thailand's broader policy to prevent Thai citizens from serving as nominal shareholders or directors in foreign-owned businesses.

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While this document is currently in the public hearing stage and not yet finalized, it is an important signal for foreign investors and businesses operating in Thailand about the potential for further tightening of compliance checks during corporate changes involving foreigners.

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Read the official draft document (in Thai) on the DBD website here: https://www.dbd.go.th/law?group=3&category=143

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