Department of Business Development Cracks Down on Foreign Nominee Shareholders in Samui and Phangan One Person Found Holding Shares in 87 Companies

The Department of Business Development joined forces with partner agencies to conduct a comprehensive inspection of foreign businesses on Koh Phangan and Koh Samui in Surat Thani Province to prevent foreign capital from using Thai nationals as “nominees.” Recently, suspicious activity was uncovered where a single individual held shares in 87 companies. The department plans to forward this information to the DSI and Anti-Money Laundering Office for financial investigation and asset seizure, while continuing to scan tourist cities nationwide for similar cases.

Mr. Poonphong Nainapakhorn, Director-General of the Department of Business Development, revealed that the department initiated an operation to scan legal entities in popular tourist destinations, specifically Koh Phangan and Koh Samui in Surat Thani Province, to intercept foreign capital using Thai nominees or proxy representatives to conceal involvement in prohibited businesses for foreigners or businesses requiring permits that were not obtained, under the Alien Business Act B.E. 2542 (1999). This followed reports of foreigners taking control of Koh Phangan and Koh Samui. The investigation found 11,426 companies with foreign investment on both islands, accounting for 67.97% of the total 16,811 companies. These include both legally compliant businesses and those avoiding regulations by using Thai nominees.

“The department has made this a high-priority issue for decisive enforcement, working proactively with partner agencies that have signed an MOU to prevent and suppress the use of Thai proxies (nominees) to swiftly bring offenders to justice.”

Shocking discovery: A single nominee controls 87 companies on Samui and Phangan.

Previously, the department and partner agencies inspected businesses on Koh Phangan and identified two suspicious nominee business groups:

1. Accounting offices Operating under the name First Consultants Universal Service (First Consultants 47 Co., Ltd.), the owner is a shareholder in 66 companies. The accounting office’s building hosts 89 legal entities that show no evidence of actual business operations. Police have seized documents and computers to investigate whether Thai nominees are used to operate businesses on behalf of foreigners and to collect evidence for legal proceedings.

2. Real estate business (Construction project: Sithaya Beachfront Villa) This involves eight luxury villas rented to foreign tourists at 13,000 baht per night without a hotel operation license. Local administrative officials summoned the project manager and six foreign tourists for further questioning. Suspicious information emerged concerning land ownership worth over 152 million baht. Two Thai legal entities hold the land, but Israeli shareholders hold 49% of shares. Subsequently, another Israeli company purchased additional shares, potentially constituting tax evasion and disguised nominee shareholding.

. On Koh Samui, legal entities potentially violating the Alien Business Act B.E. 2542 were found. Employees of registration/accounting offices were majority shareholders alongside foreigners to create apparently Thai companies. One individual was found to hold shares in 87 companies. The department forwarded the information to the Department of Special Investigation (DSI) for in-depth examination and further legal action.

Data submitted to DSI and Anti-Money Laundering Office to trace financial flows of 34 major businesses.

Additionally, the department submitted data on 34 large companies in Surat Thani identified as potential nominee groups to the Anti-Money Laundering Office (AMLO) for financial transaction monitoring. Each company has assets exceeding 100 million baht and operates businesses listed in the annex of the Alien Business Act. Most are real estate-related businesses requiring foreign investors to obtain prior permission.

Severe penalties: Up to 3 years imprisonment and fines up to 1 million baht.

According to the Alien Business Act B.E. 2542,

• Thai nationals acting as nominees face imprisonment up to 3 years or fines ranging from 100,000 to 1,000,000 baht, or both.
• Foreigners conducting business without permission face the same penalties. Additionally, violation of court orders results in daily fines of 10,000 to 50,000 baht until the offense ceases.

Plan to expand investigations to tourist cities nationwide to prevent foreign capital from dominating the economy.

Mr. Poonphong added that the department is also scanning legal entities in other tourist provinces such as Chonburi, Chiang Mai, Prachuap Khiri Khan, Phuket, Krabi, and Phang Nga to analyze risks and potential nominee cases, particularly businesses with foreign ownership from 50% upwards or between 0.01% to 49.99%. The department and partner agencies will intensify proactive efforts to eliminate nominee cases involving both foreigners and Thais in all areas and business types to create opportunities for Thai entrepreneurs and reduce business inequality.

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