Police and immigration officers have arrested a Chinese investor in Chon Buri over allegations that Thai nationals were used as nominee shareholders in a company selling processed timber.

The arrest followed a search of the company premises on Ban Bueng-Klaeng Road in Ban Bueng district on 16 July, carried out under Chon Buri Provincial Court search warrant No. 146/2569.

Officers seized computers, mobile phones, CCTV equipment and documents they said were connected to the alleged offences.

Arrest warrant and allegations

The suspect, identified as Mrs Zhen, was arrested under Chon Buri Provincial Court arrest warrant No. 403/2569.

She is accused of allowing Thai nationals to assist or support her, or to hold shares in a limited company on behalf of a foreigner.

Authorities allege this was intended to allow a foreigner to operate a business while avoiding or breaching provisions of Thailand's Foreign Business Act.

She also faces an allegation of operating a business as a foreigner in breach of Section 8(3) of the Act. Police said she had been informed of the charges and taken into custody for further legal proceedings.

The operation was led by Ban Bueng police chief Pol Col Krit Masuk, with officers from Chon Buri Immigration, Ban Bueng district administration and the Chon Buri Provincial Commercial Office.

What this means for foreign business owners

Thailand restricts foreign participation in a number of business activities under the Foreign Business Act. Foreigners considering a company structure, including those buying into an existing Thai business, should ensure that shareholdings and management arrangements genuinely reflect the investment and are not set up merely to bypass foreign ownership rules.

Using Thai nationals as shareholders in name only can expose both the foreign investor and Thai participants to criminal allegations. The case also underlines that company documents, electronic records and premises may be examined during enforcement action.

For expatriates who run businesses in Thailand, professional legal and accounting advice is particularly important before changing share structures, appointing directors or expanding into activities that may be restricted to Thai-majority companies.

Documents and devices seized

During the search, officers took computers, telephones, CCTV cameras and key business documents for examination.

Authorities have not said whether other people are under investigation or provided further details about the company's operations.

Pictures courtesy of Matichon

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A drop in the bucket. Chuwit warned us that Chinese criminal enterprises were building a web of gray business/financial activity beneath the surface of the economy. I don't know how you can root these people out, even partially. China has an ever expanding footprint in Thailand. Easy access from Chinese satraps in Laos and Burma make the crime wave possible and feeds it daily.

1 hour ago, Georgealbert said:

During the search, officers took computers, telephones, CCTV cameras and key business documents for examination.

So each time they pull off a bust like this, they get data as above that will likely lead them to other persons and operations. And it's getting so they are having increased computer horsepower to deal with it.