Thailand Cracks Down on Foreign Companies Using Local Ownership Facade

Thailand Cracks Down on Foreign Business Ownership

Bangkok, Thailand - Authorities have launched an enforcement campaign targeting businesses registered with a single accounting firm, which allegedly used nominees to circumvent the country’s foreign ownership laws. The investigation has identified nearly 500 companies in various sectors, including beauty salons and cannabis farms, linked to foreigners who falsely claimed to own majority stakes.

Under the Foreign Business Act, non-citizens are prohibited from holding more than 49% of local businesses. To comply with this rule, some foreign entrepreneurs have hired locals to complete paperwork stating they own at least 51% of their company, despite having little involvement in the business.

The government has been using artificial intelligence and conducting inspections across popular tourist areas to identify companies linked to foreigners. As a result, 50,000 foreign-linked companies are now under greater scrutiny. Foreign businesses and property owners are reportedly seeking advice from lawyers on how to navigate this new enforcement push.

Thai authorities have pledged to crack down on illicit nominee schemes, with Prime Minister Anutin Charnvirakul leading the charge. The government has announced plans to prosecute those found guilty of violating the law, including individuals who own multiple companies and sell them to foreigners.

An audit by the Ministry of Commerce revealed that 70% of registered entities in resort islands Koh Samui and Koh Phangnan are part-owned by foreigners. Authorities have also referred 28 foreign suspects to prosecutors following an investigation into fraudulently registered firms in Phuket and Surat Thani provinces.

Some local businesses have expressed concerns about being undercut by foreign investors, who allegedly purchase properties and convert them into short-term rentals, limiting Thai ownership options.

Source: Al Jazeera