The Ministry of Commerce is moving forward to curb nominee shareholders by sending data on over 100,000 foreign-invested companies to 43 embassies for oversight, emphasizing that no wrongdoing has been determined yet, and warning Thai nationals acting as nominees face up to 3 years in prison and fines up to 1 million baht.
The Ministry of Commerce is implementing proactive measures to prevent and suppress the problem of “nominee” arrangements, where Thai individuals conduct transactions on behalf of foreigners to evade the Foreign Business Act of 1999. Recently, it has collaborated with various embassies to exchange information and oversee investments to ensure compliance.
Mr. Poonpong Nainapakorn, Director-General of the Department of Business Development. He revealed that the department has sent data on limited companies with foreign directors or shareholders from various nationalities, totaling over 100,000 entities, to 43 embassies representing 48 nationalities in Thailand. This enables embassies to jointly monitor and facilitate their investors, supporting business operations in accordance with Thai laws and regulations.
The data provided by the Department of Business Development to embassies has been classified according to foreign shareholding proportions into three groups:
Mr. Poonpong explained that this data sharing is only an initial step based on authority to verify, and does not imply that these 100,000 businesses or investors have violated laws or acted as nominees. The government remains ready to facilitate foreign investors conducting legitimate business in Thailand.
The issue of Thai individuals serving as nominees to hold shares on behalf of foreigners is an economic crime that has long affected Thai business structures. The Director-General warned Thai nationals who accept benefits to act as nominees for foreigners that they will face strict criminal prosecution under Section 36 of the Foreign Business Act, with penalties of up to 3 years imprisonment or fines ranging from 100,000 to 1,000,000 baht, or both.
Foreigners who unlawfully conduct business without permission face the same penalties under Section 37. Operators and investment advisors are urged to strictly comply with the law for the nation's benefit.
This integration of cooperation with 43 embassies reflects the Ministry of Commerce's efforts to organize and increase transparency in foreign investment in Thailand. It not only helps block illicit capital but also builds confidence among foreign investors conducting business lawfully.
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