The Ministry of Commerce has announced a review and major overhaul of the Foreign Business Act (FBA) B.E. 2542 (1999) to combat the use of proxy or nominee structures by foreign investors. The reform will aim to close loopholes that allow foreign entities to bypass ownership restrictions in protected sectors, with stricter enforcement and significantly harsher penalties expected. Authorities say the proposed changes will improve transparency and ensure compliance with existing regulations.
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The review, launched by the Department of Business Development (DBD), marks the most significant revision of the law in more than 20 years. The current legislation divides restricted activities into three tiers, including nine occupations that are strictly prohibited to foreign ownership. However, enforcement has been undermined by complex shareholding arrangements that obscure true ownership.
A key focus of the reform is eliminating cross-shareholding structures, where companies hold stakes in each other to disguise foreign control. These circular ownership arrangements have made it difficult for officials to determine whether a business qualifies as a foreign entity under the law. By clarifying definitions and tightening rules, the DBD aims to prevent misuse of Thai-registered companies as fronts for foreign operations.
The government also plans to introduce tougher penalties to deter violations. Proposed measures include asset seizure for those found guilty of using nominees and new criminal charges for operating without the required licences. Officials noted that current fines are often treated as a cost of doing business, with offenders quickly re-establishing operations under new structures.
In addition, the reforms will require greater transparency from foreign entities, including mandatory reporting of changes in management and responsible persons. These steps are intended to strengthen oversight and close gaps that have limited effective prosecution in the past.
Experts suggest the changes could improve investor confidence by aligning Thailand’s legal framework with international standards, while still protecting domestic industries. However, businesses currently operating under complex structures may face increased scrutiny and compliance costs.
The Nation reported that The Ministry of Commerce is continuing its evaluation of the FBA and related regulations, with further details expected as the review progresses. Implementation timelines have not yet been confirmed, but authorities have indicated that enforcement will be a priority once amendments are finalised.
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Adapted by ASEAN Now Nation 19 Apr 2026
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