Nominee Arrangements in Thailand: 2026 Enforcement & Legal Risks

Heightened Enforcement and Legal Implications

Understanding the legal implications of nominee arrangements in Thailand has become critical as the country enters a new phase of strict enforcement across multiple industries in 2026.

Thailand has entered a new phase of enforcement against nominee arrangements across a wide range of industries. In particular, 6 business sectors have been identified as high-risk for potentially involving illegal nominee structures, where foreign nationals may be using Thai nationals as nominees to operate businesses in violation of Thai law. These sectors include:

Tourism-related businesses, such as restaurants, food and beverage outlets, and souvenir shops
Land trading and real estate businesses
E-commerce, logistics, and warehouse businesses
Hotels and resorts
Agriculture-related businesses
General construction businesses

In total, 46,918 businesses within these sectors have been targeted for inspection.[1] These industries have come under increasing scrutiny due to suspected practices involving Thai nationals acting as nominee shareholders on behalf of foreign nationals, with the intention of circumventing laws governing foreign business operations.

From a commercial standpoint, this enforcement trend signals a clear policy shift. Authorities are moving beyond surface-level compliance and placing greater emphasis on examining ownership structures, capital flows, and actual management control, particularly in businesses with foreign participation.

Legal Framework Governing Business Ownership in Thailand

Under the Foreign Business Act B.E. 2542 (1999), the use of nominee arrangements is expressly prohibited.

Section 36 of the Act defines a “nominee” as a Thai national or a juristic person that is not considered a foreigner under the Act, who assists, aids, abets, or participates in the operation of a business restricted to foreigners, where such foreigner is not permitted to operate that business. This includes situations where a Thai national holds shares or presents the business as solely Thai-owned in order to enable a foreigner to operate the business in circumvention or violation of the Act. The provision also applies to foreign nationals who allow or benefit from such arrangements.

Violations of Section 36 are subject to criminal penalties, including imprisonment for a term of up to three years, a fine ranging from THB 100,000 to THB 1,000,000, or both. In addition, the court is empowered to order the cessation of the nominee arrangement, joint business operation, or shareholding structure. Failure to comply with a court order may result in a further daily fine of THB 10,000 to THB 50,000 for the duration of the violation.

Classification of Companies Under Thai Law

For commercial and regulatory purposes, companies in Thailand are generally classified based on the nationality of their shareholding:

Thai Companies

Thai companies are those in which Thai individuals and/or Thai juristic persons hold at least 51% of the shares.

Foreign Companies

Foreign companies are entities in which foreign nationals hold shares exceeding the threshold permitted for Thai companies. Depending on the nature and scope of the business, these companies may be required to obtain a Foreign Business License (FBL) or other specific regulatory approvals prior to commencing operations.

Commercial Considerations

In practice, obtaining a Foreign Business License can be complex and time-consuming. The process often involves extensive documentation, heightened regulatory scrutiny, and significant government fees, with approval timelines generally longer than those for registering a Thai company. Historically, these practical challenges have contributed to the use of nominee arrangements as a means of accelerating market entry.

However, in the current enforcement environment, reliance on nominee structures presents heightened legal, financial, and operational risks. Businesses operating under such arrangements may face forced restructuring, business disruption, criminal exposure, and reputational damage. As a result, foreign investors are increasingly advised to reassess existing structures and ensure that their operations align with both the legal requirements and the commercial substance of Thai law.

Message to Investors and Business Owners

Considering the increasing regulatory scrutiny in Thailand, investor and business owners are advised to review ownership structures, funding arrangements, governance rights, and actual control mechanisms. Proactive legal structuring may help mitigate the risks of forced divestment, regulatory investigations, criminal liability, and reputational harm.

Nominee-related risk should be regarded not only as a compliance issue, but also as a strategic consideration that may affect long-term asset value. For parties holding or structuring investments in Thailand, this is a timely opportunity to ensure that ownership and control arrangements reflect legal reality and commercial substance, rather than relying solely on formal documentation.

[1] Department of Business Development. (2026, February 5). กรมพัฒนาธุรกิจการค้า ปรับแผนตรวจสอบ ‘นอมินี’ ปี 2568 เน้น 6 กลุ่มธุรกิจน่าสงสัย [Nominee inspection strategy revised for 2025 focusing on six high-risk business sectors]. https://www.dbd.go.th/news/10724042568

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