Thai authorities are ramping up enforcement of ownership rules.
Thailand is stepping up enforcement against illegal foreign nominee-owned businesses to stop foreigners from using Thai nationals as proxy shareholders to bypass foreign ownership limits. The crackdown has raised questions for Phuket property buyers and existing owners, particularly those using Thai limited companies to hold land or villas.
Unlike past single-office checks, the current campaign involves close collaboration between the Department of Special Investigation (DSI), the Department of Business Development (DBD), the Department of Lands, the Revenue Department, immigration, and local police.
Cross-referencing company, financial, and land records helps authorities trace capital flows, beneficial ownership, and funding sources rather than just reviewing paperwork. An investigation may also uncover potential tax, immigration, or other violations, depending on the evidence.
What Is a Nominee Structure in Thailand?
A nominee structure in Thailand is an illegal arrangement where Thai nationals hold shares in a company or land on paper while a foreign investor provides the funding and retains actual control. In property transactions, these arrangements are sometimes used to bypass restrictions on foreign land ownership.
Paper vs. Reality: Thai citizens (often employees or acquaintances) are listed as majority shareholders to satisfy legal requirements, but they may invest no genuine personal capital and receive no real dividends.
Hidden Control: The foreign investor may use side agreements, undated share-transfer forms, or loan documents to maintain decision-making power and control of the assets.
Common Uses: These arrangements are used to bypass restrictions on foreign-owned businesses under the Foreign Business Act (FBA) or to buy land and real estate, which foreigners are generally barred from owning directly.
However, a Thai-majority company with foreign shareholders is not automatically an illegal nominee company. The important distinction is whether the Thai shareholders are genuine investors and the company complies with applicable laws.
Why the 2026 Crackdown Is Different
Thailand's 2026 crackdown on foreign nominee structures goes beyond surface-level paperwork reviews, with authorities placing greater emphasis on financial substance, genuine shareholding, and the people who ultimately control the business.
Financial Capacity Checks: From 1 August 2026, the DBD's Order No. 2/2569 introduced additional evidence requirements for specified company registrations and subsequent changes involving foreign investment or authorised directors. These can include three months of bank statements showing Thai shareholders' capital contributions, as well as supporting records from the person or company receiving the funds.
Cross-Agency Data Checks: The DBD, Department of Lands, and other agencies are sharing and reviewing company, ownership, tax, and land records. This helps officials identify arrangements that warrant further investigation, rather than relying only on company registration documents.
Additional Identity Verification: The DBD has also strengthened identity checks for certain higher-risk company registration applications. This does not mean every company director must attend an in-person interview.
Focus on Ultimate Beneficial Ownership: Authorities are looking past standard 51/49% Thai-to-foreign share splits. Investigations focus on who actually provides the capital, exercises management and voting control, and receives the financial benefits.
The campaign aims to clean up the business landscape and encourage foreign investment through transparent, legitimate legal structures. Authorities are focusing on companies where Thai shareholders are not genuine investors but instead act as fronts concealing foreign control.
Enforcement has extended to major commercial and tourist destinations, including Phuket, Koh Samui, Koh Phangan, Bangkok, Chon Buri, Krabi, and Phang Nga. High-scrutiny areas include tourism, hospitality, real estate and property holding, restaurants, car rentals, and construction.
During a June 2026 operation, officials reported that more than 600 companies in Phuket had been flagged as potentially linked to nominee arrangements. These were companies identified for scrutiny, not 600 proven illegal businesses.
Penalties and Legal Risks
Illegal nominee arrangements can lead to serious consequences under the Foreign Business Act and, where applicable, land, tax, immigration, or other laws. The outcome depends on the specific conduct, evidence, and legal proceedings.
Foreign Business Act (1999) Violations: Under Section 36, both the foreign beneficiary and the Thai nominee may face up to three years in prison, fines ranging from THB 100,000 to THB 1,000,000, or both. A court may also order the unlawful arrangement to cease.
Arrests and Asset Investigations: Authorities have conducted raids and arrests involving suspected nominee businesses and have investigated substantial land and property holdings. An investigation or suspicion does not itself establish guilt or result in automatic asset confiscation.
Other Legal Consequences: Depending on the circumstances, proven violations may lead to court orders, penalties, or requirements to dispose of unlawfully held land. Additional charges or asset measures require the relevant legal grounds and procedures.
What Existing Property Owners Should Do
Existing property owners using Thai limited companies to hold land or villas should review their ownership structures, particularly where there is uncertainty about the legitimacy of Thai shareholders or the source of their investment funds. A genuine, compliant Thai company is not automatically unlawful simply because it has foreign involvement.
Audit Company Paperwork: Review corporate structures holding land or villas through Thai limited companies with independent Thai legal counsel. Check share registers, capital contributions, agreements, and the company's actual business activities.
Prepare Financial Records: Ensure Thai shareholders can demonstrate genuine investment and the source of funds where required. The new three-month bank statement rules apply to specified registration filings; they are not a blanket demand imposed on every existing shareholder.
Verify Compliance: Check the property's title, any registered encumbrances, and the company's current legal obligations. If a nominee arrangement is suspected, obtain legal advice on lawful next steps rather than assuming a title will automatically be frozen or a sale forced.
Can Foreigners Still Buy Villas in Phuket?
Yes. Thailand's nominee crackdown does not prevent foreign buyers from purchasing villas in Phuket through legally compliant arrangements. However, foreigners are generally restricted from owning the land itself directly, so the legal rights over the land and the villa must be carefully structured.
For example, a foreign buyer may hold a registered lease or other lawful right over the land and, in suitable cases, own the building separately. The appropriate arrangement depends on the property's title, the landowner, the buyer's objectives, and the documents that can be legally registered.
Legal Alternatives to Land Ownership for Foreign Buyers
New property buyers in Phuket should avoid informal nominee arrangements and complete thorough legal due diligence. Several legal ownership and usage arrangements are available, but they provide different levels of control, transferability, and protection.
Freehold Condominiums: Foreigners can own condominium units 100% in their own name under the foreign ownership quota (up to 49% of the total sellable condominium unit area). A foreign buyer must meet the statutory eligibility rules, and buyers using the foreign-currency remittance route should retain the bank documentation required for registration, which may include a Foreign Exchange Transaction form or other acceptable bank evidence.
Registered Long-Term Leases: Thai law generally allows registered leases for land and buildings for up to 30 years. These leases are registered at the local Land Office. Renewals are not automatic or guaranteed, and pre-agreed extensions designed to bypass the 30-year limit may be unenforceable, as highlighted by a Thai Supreme Court ruling reported in 2025.
Usufruct (สิทธิเก็บกิน): A registered usufruct allows a foreign national to use, occupy, and potentially earn income from property owned by another person. It can be established for a fixed term of up to 30 years or for the holder's lifetime. The usufruct itself ends when the holder dies and cannot be inherited.
Sap-Ing-Sith (ทรัพย์อิงสิทธิ): Introduced under the Sap-Ing-Sith Act of 2019, this registered property right allows foreigners to use and benefit from qualifying property for up to 30 years. Unlike a usufruct, the right can be transferred, inherited for its remaining term, or mortgaged. It is less commonly used than conventional leasehold and does not give ownership of the underlying land.
Separate Building Ownership and Superficies: Thai law can permit ownership of a building to be separated from ownership of the land. A properly registered right of superficies may support this arrangement, but the building title, construction documents, and land rights must be reviewed together.
Thai Spouse Ownership: Property can be purchased in the name of a Thai spouse. The Thai spouse is the legal landowner, and the Land Office generally requires a declaration confirming that the purchase funds are the Thai spouse's separate property. This long-standing requirement should not be confused with a nominee arrangement or presented as a new rule introduced by the crackdown.
BOI or Industrial Estates: Qualified foreign investors or industrial operators may legally own land under specific investment promotion privileges granted by the Board of Investment (BOI) or industrial estate frameworks. These are specialist exceptions rather than typical residential villa-buying options.
None of these rights should be used to disguise an illegal nominee arrangement. Their validity depends on the genuine landowner, the underlying transaction, and proper registration.
What Buyers Should Check Before Purchasing
Check the Title: Have independent legal counsel verify the land or condominium title, ownership history, registered mortgages, leases, and other encumbrances.
Review the Ownership Structure: If a Thai company is involved, investigate the shareholders, capital contributions, business purpose, and who actually controls the company.
Confirm Registration and Funding: Check which rights can be registered at the Land Office and what bank or source-of-funds documents will be needed.
Get Independent Legal Advice: Ask a qualified Thai property lawyer to review the proposed arrangement and contracts before paying a substantial deposit or completing the purchase.
Thailand's nominee crackdown makes careful due diligence more important, but it does not eliminate the legal routes available to foreign property buyers. The key is to choose an arrangement that reflects the genuine transaction and is properly documented and registered.
