What are the risks of using Thai nominee shareholders to get around foreign ownership limits?
A nominee arrangement means Thai shareholders are registered as holding 51% or more of the shares but have not really invested and do not take part in the business, while foreign shareholders actually control the company. Many businesses see it as a shortcut around the 49% foreign ownership cap, but it is clearly illegal in Thailand.
1. Legal consequences
| Consequence | Basis |
|---|
| Both the Thai nominee and the foreign controller can be punished: up to 3 years' imprisonment, a fine of THB 100,000–1,000,000, or both | Foreign Business Act, Section 36 |
| The court may order the unlawful shareholding to end or the company to be dissolved; continued violation carries a daily fine of THB 10,000–50,000 | Foreign Business Act, Section 36 |
| False registration documents (such as a fake address or foreign shareholders who were not actually present to sign) may also amount to false statements to officials and forgery of official documents | Criminal Code, Sections 137, 267 and 268 |
| Company registration revoked, with knock-on problems for banking, tenders and licence applications | Ministry of Commerce enforcement notice, September 2026 |
2. Enforcement in 2026
On 3 September, the Ministry of Commerce reported that 7 foreign-held companies in Nakhon Phanom had registered at residents' homes without their knowledge, and that the foreign shareholders had no immigration records during the registration period. Revocation of all 7 registrations is being pursued.
On 11 September, the government reported that new registrations of high-risk companies (foreign shareholding of 0.01%–49.99%) had fallen 81.77% year on year, and the DBD, together with the Land Department, the Anti-Money Laundering Office and others, is carrying out a nationwide review.
Focus of checks: whether Thai shareholders have genuine proof of investment and source of funds, whether the registered address is a real place of business, and whether actual control of the board and bank accounts matches the registration.
3. Business risks as well as legal ones
Legally, a nominee shareholder is a shareholder. They can vote and receive dividends, and their signature is needed to sell the company, increase capital or dissolve it. If the relationship breaks down, the real investor will find it very hard to regain control through the courts.
4. Compliant alternatives
Activity is BOI-promotable: obtain BOI promotion and then a Foreign Business Certificate (FBC); 100% foreign ownership is possible.
Activity is outside BOI scope: apply for a Foreign Business License (FBL) (see What does it take to obtain an FBL?).
Restructure the business: separate restricted from unrestricted activities; the unrestricted part can be 100% foreign-owned.
Genuine joint venture with a Thai partner: the Thai side genuinely invests and takes part in the business, with governance set out in a shareholders' agreement.
5. What if you already have a nominee structure?
Review and restructure as early as possible. The right path depends on the business, shareholding history and assets of each case. Z&X does not provide nominee or proxy shareholder arrangements; we can help review an existing structure and assess a move to BOI or FBL.
6. Legal basis and scope of service
Basis: Foreign Business Act, Section 36; Criminal Code, Sections 137, 267 and 268; Ministry of Commerce enforcement notice of 3 September 2026; Government Public Relations Department notice of 11 September 2026. Whether an arrangement constitutes nominee shareholding is determined case by case by the authorities and courts.
Related services: Company Registration & Approval Services | BOI Investment Promotion Application
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