Report Thailand Targets High-Risk Sectors in Nominee Business Crackdown

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Photo courtesy of Bangkok Post

 

The Commerce Ministry of Thailand has intensified its strategy to clamp down on nominee-based businesses within the country. This updated inspection approach, led by Auramon Supthaweethum, Director General of the Department of Business Development (DBD), zeroes in on six high-risk sectors, focusing on foreign entities using Thai nationals as nominees to mask their ownership.

 

This initiative aims to bolster investor confidence and safeguard the national economy by tackling foreign-controlled businesses operating under the guise of Thai ownership. The revised plan targets sectors where such practices are most prevalent, including tourism-related businesses (such as restaurants, souvenir shops, and entertainment venues), real estate and land trading, e-commerce, logistics, warehouses, hotels and resorts, agriculture-related businesses, and general construction.

 

The DBD plans an ambitious investigation covering 46,918 business entities, concentrating primarily on those with foreign shares ranging from 0.09% to 49.9%. These inspections will be conducted in coordination with relevant enforcement agencies. From September 1, 2024, to March 31, 2025, authorities handled 852 cases, revealing damages totalling 15.1 billion baht.

 

Investigations are driven by whistleblower tips and patterns indicating potential nominee activities. Notable hotspots include construction and real estate in areas like Rama IX and Krungthep Kreetha, and restaurants in Huai Khwang, Rama IX, and Ratchadaphisek. Additionally, landholding for agricultural purposes in regions such as Rayong and Chanthaburi is under scrutiny.

 

 

 

In collaboration with the Anti-Money Laundering Office (AMLO), the DBD has drafted amendments to the Anti-Money Laundering Act. These changes propose penalties for Thai citizens who aid or act as nominees for foreigners operating businesses illegitimately under the 1999 Foreign Business Act. Violations relating to nominee activities (Section 36) and unauthorised foreign business operations (Section 37) can lead to asset seizure and freezing for both Thai and foreign parties involved.

 

The draft amendments are currently open for public consultation until April 25, inviting feedback to refine the law aimed at strengthening Thai enterprises, fostering fair competition, and encouraging lawful foreign business operations in Thailand.

 

Following the consultation, the draft will be submitted to the Cabinet for approval, and subsequently brought before the House of Representatives and the Senate for further deliberation. Upon passage, the Commerce Ministry, in concert with the Council of State, plans to amend the Foreign Business Act, with a focus on adjusting shareholding ratios and defining business types that could impede operations. Auramon underscored the importance of gathering insights from the private sector throughout this legislative process.

 

 

  Adapted by ASEAN Now from The Thaiger 2025-04-24