Thailand’s Department of Business Development (DBD) has signalled a significant escalation in its campaign against nominee arrangements in corporate structures.
Building on the enhanced evidentiary requirements introduced in January 2026, the DBD is now proposing mandatory in-person verification for certain company amendments involving foreign participation. With enforcement anticipated from 1 April 2026, foreign investors and their Thai partners should act promptly to assess their positions.
The crackdown on nominee structures
The DBD’s own statistics illustrate why authorities have continued to intensify their approach. Of approximately 782,542 active companies currently operating in Thailand, around 118,016 involve foreign investment at levels between 0.01 and 49.99 percent of shareholding. Officials estimate that more than 80 percent of these entities, roughly 94,000 companies, may involve Thai nationals holding shares in a nominee capacity on behalf of foreign interests.
In early March 2026, authorities identified 15 fruit-packing companies suspected of using Thai nominee shareholders, with 11 located in Ratchaburi province and others across Samut Prakan, Pathum Thani, Samut Sakhon, and Bangkok. These cases have been referred to the Central Investigation Bureau, the Department of Special Investigation, and AMLO.
Separately, authorities on Koh Phangan have been examining luxury villa developments involving alleged nominee arrangements, demonstrating that scrutiny extends well beyond manufacturing into real estate, tourism, and service sectors.
On 9 March 2026, DBD Director-General Poonpong Naiyanapakorn convened a high-level consultation with representatives from 17 leading law firms to gather input on the proposed next stage of regulatory tightening. The consultation underscores that the DBD is approaching this issue deliberately, seeking to close loopholes identified in practice while avoiding unnecessary disruption to legitimate foreign investment.
The January 2026 measures
As we reported in January 2026, the DBD introduced four new regulatory measures that took effect that same month, set out in a series of orders from the Central Company and Partnership Registration Office. Those measures were significant in their own right, shifting the registration framework away from a purely form-based approach toward substance-based verification.
The core measures introduced at the start of this year include the following:
- Enhanced verification of Thai shareholders (Order No. 2/2568): Thai shareholders in companies with foreign shareholding below 50 percent, or companies with no foreign shareholders but have foreign authorised directors, are required to submit three months of bank statements demonstrating that capital contributions correspond to genuine, traceable fund transfers.
- Additional requirements for individuals linked to money laundering risks (Order No. 3/2568): Persons listed by the Anti-Money Laundering Office (AMLO) must appear in person before a registrar, present identification, submit bank statements, and provide a consent letter for use of the registered address.
- Stricter review of registered office addresses (Order No. 4/2568): Where an address is already registered to five or more companies, applicants must submit a letter of consent from the property owner and documentary evidence of their right to use the premises.
- Verification of Thai State Welfare Card holders (Order No. 5/2568): Shareholders or directors holding a State Welfare Card, issued to individuals with limited income, must appear in person and submit bank statements consistent with their declared capital contribution.
These measures were explicitly designed to close gaps previously exploited through nominee arrangements, mule accounts, and corporate vehicles used to obscure beneficial ownership.
What is being proposed?
The Draft Order represents a targeted response to persistent circumvention of the January 2026 document-based controls. It underwent public consultation from 29 February to 13 March 2026, with finalisation expected in mid-March and enforcement commencing 1 April 2026.
The current version of the Draft Order lists several reporting requirements when certain changes have been triggered:
- Amendments to Registered Partnerships: The order applies where an amendment would result in foreign partners holding less than 50 percent of capital in a partnership that was previously all-Thai or foreign-majority. All existing and incoming Thai-national partners must appear in person, present valid identification, and sign a sworn statement denying nominee conduct.
- Amendments to Limited Companies: The order applies where all existing authorised directors are Thai nationals and a proposed amendment would result in a foreigner becoming an authorised director or co-signatory. The same in-person appearance, identification, and sworn statement requirements apply to all existing and incoming Thai directors.
- Sworn Declarations and Criminal Exposure: The Statement Record Form explicitly references FBA Section 36 and Criminal Code Sections 137 and 267 on false statements to officials. Signatories must also declare their average monthly income, creating an immediately visible inconsistency where a Thai partner with modest earnings claims a substantial capital contribution, and providing a ready basis for prosecution.
While exceptions exist, they require written approval from a designated senior DBD official, and illness or overseas residency alone will not suffice. Power of attorney is no longer adequate for in-scope transactions.
What should foreign-owned businesses do going forward?
The enforcement framework operates under the Foreign Business Act B.E. 2542 (1999). Under Section 36, Thai nationals acting as nominees face up to three years’ imprisonment and fines of 100,000 to one million baht. Meanwhile, Section 37 imposes identical penalties on the foreign principals behind such arrangements, with additional daily fines of 10,000 to 50,000 baht for continuing violations.
Thai Supreme Court decisions have reinforced both provisions, including convictions arising from nominee land holdings on Koh Samui and sham loan arrangements used to disguise foreign control.
In light of these developments, and to prevent hefty fines and penalties, companies with foreign participation or mixed Thai-foreign shareholding should consider the following:
- Review existing shareholder structures and authorised signatory arrangements before 1 April 2026 to identify whether proposed or anticipated amendments will fall within the scope of the draft order.
- Ensure that Thai shareholders can demonstrate genuine financial capacity for their capital contributions, with bank records that are clear, consistent, and traceable.
- Plan for in-person attendance requirements in transaction timelines, particularly where amendments involving foreign signatories or directorship changes are anticipated.
- Confirm that registered office addresses are properly documented and that consent and premises rights can be evidenced where required.
- Obtain legal advice early if there is any uncertainty about whether an existing structure is compliant with the Foreign Business Act, as the window for voluntary remediation is narrowing.
The proposed April 2026 measures, if adopted in their current or a similar form, will extend that scrutiny from initial registrations to post-incorporation amendments, closing what the DBD identifies as the primary remaining avenue for circumvention. Businesses operating in Thailand, whether newly incorporated or long-established, should treat the current period as an opportunity to ensure their structures are transparent, properly documented, and genuinely compliant.
This article is for general information purposes only and does not constitute legal advice. Readers should seek specific legal advice before taking any action in reliance on the information contained in this article.
