Crackdown on Thai Nominee Use in Phuket

In recent developments, Thai authorities have begun strict enforcement against the use of Thai nominee structures, particularly in Phuket’s real estate and tourism sectors. These industries, deemed sensitive and nationally significant, have seen increased scrutiny as part of the government’s effort to clamp down on unlawful foreign control.

Under the Foreign Business Act B.E. 2542 (1999) (FBA), using Thai nationals either individuals or entities to hold shares on behalf of foreigners in restricted sectors is prohibited and punishable by law. Both the nominee and the foreign party involved in such arrangements may face legal action. This crackdown highlights the government’s commitment to upholding investment laws and preserving national interests in key sectors.

Opportunities for Foreign Investors Today

While Thailand continues to impose restrictions in sensitive sectors, foreign investors still have viable options to enter the Thai market:

Non-Restricted Businesses: Numerous sectors are outside the FBA’s scope and can be fully foreign-owned (read more Businesses in Thailand That Do Not Require a Foreign Business License (FBL) – PKF Thailand)

Board of Investment (BOI) Promotion: The BOI continues to support various industries with investment incentives and permits 100% foreign ownership for eligible projects including international trading and service industries.

Regulatory Developments: The Department of Business Development recently announced that the Foreign Business Committee had resolved to remove several business categories from the restricted list, allowing up to 100% foreign ownership in the following sectors:

• Software development (only for Big Data Analytics, Predictive Analytics, Cyber Security, Software for control system or linking with high-technology equipment, and Industrial Software)
• Telecommunications services (only for Type 1 – without own telecommunication network)
• Treasury center
• Administration and management services in administrative, human resources, IT of affiliated company
• Domestic debt guarantee services for affiliated company
• Leasing space for ATM machines or vending machines to facilitate the employees
• Petroleum drilling
• Businesses under the Securities and Exchange Act
• Businesses under the Derivatives Act.

However, this amendment is currently undergoing the legislative drafting process and has yet to be enacted into law.

Additionally, on April 22, 2025, the Thai Cabinet has also approved a proposal in principle for the urgent amendment of the FBA. This reform aims to remove business obstacles, attract foreign investment, and enhance Thailand’s economic competitiveness.

Conclusion

The Thai government has expressed its intention to revise the list of restricted businesses to better align with the economic needs, focusing only on businesses that impact national security or other critical interests, while foster economic development and enhance competitive in the global market.

Investors are encouraged to monitor regulatory updates and pursue legitimate structures particularly those supported by the BOI or new regulatory exemptions.

For tailored legal advice or compliance support in structuring your business in Thailand, please contact our legal team.