Thailand tightens oversight of concealed foreign ownership in real estate and tourism
Thai authorities have launched a broader and more coordinated campaign against companies they suspect of concealing actual foreign ownership through domestic intermediaries in the real estate, tourism, hotel and related services sectors. According to announcements by Thailand's Ministry of Commerce and the Department of Business Development, inspections are focused on so-called nominee structures, namely models in which Thai nationals formally hold shares or director positions, while actual control, capital and benefit belong to foreign investors. Such arrangements have for years been one of the most sensitive issues in Thailand's business environment, especially in tourist areas where the real estate market, short-term rentals, hotel operations and local competition are strongly intertwined.
The new phase of oversight gained additional weight after the Department of Business Development under the Ministry of Commerce, according to a report by the Thai newspaper Thairath dated May 18, 2026, announced that tens of thousands of companies in popular tourist zones are being inspected. Special focus has been placed on Koh Phangan, Koh Samui, Phuket, Pattaya, Hua Hin, Krabi, Phang Nga and Pai, that is, areas where the share of foreign investors and companies with cross-border capital is particularly visible. Thai institutions emphasize that the goal is not to stop lawful foreign investment, but to distinguish legitimate investments from business models that circumvent the restrictions prescribed by the Foreign Business Act of 1999.
Inspections in tourist centers
According to data reported by Thairath, the Department of Business Development identified a large number of registered legal entities in major tourist destinations and singled out among them companies with foreign shareholder stakes. In Koh Phangan, 3,754 companies were recorded, of which 2,381 have foreign shareholders. On Koh Samui, there are 12,050 companies, among which 8,213 have foreign stakes, while in Phuket province 29,646 companies were listed, of which 11,626 have foreign shareholders. In Pattaya, or Bang Lamung district, 33,314 companies are mentioned, of which 19,910 have foreign stakes.
Official data do not mean that all these companies are illegal. Thai authorities distinguish legal joint ventures, in which foreign and Thai partners truly invest capital and share management, from structures in which the domestic shareholder is merely the formal holder of shares. Inspections are focused on the money trail, the actual source of capital, directors' powers and patterns in which the same Thai shareholders appear repeatedly in multiple companies. Particular scrutiny is given to cases in which a foreign national does not have a majority stake on paper, but has actual management control, powers of attorney or business authorities that point to concealed ownership.
Thai authorities state that such structures can distort market competition, suppress local entrepreneurs and make state oversight more difficult in sectors that are restricted to foreigners for economic, security or social reasons. In tourist destinations this is especially sensitive because ownership structures can connect land purchases, villa construction, tourist rentals, the operation of hotels and restaurants and online sales of services. When ownership is concealed, it is harder for the state to determine who actually earns profit, who makes decisions and whether rules on permits, taxes, foreign labor and hotel operations are being followed.
What is considered a nominee structure
The nominee model is most often described as a situation in which a Thai national or a Thai legal entity formally holds shares in a company, but holds them for the benefit of a foreign investor. In practice, this may mean that the domestic shareholder did not actually pay in capital, has no economic benefit from the investment, does not participate in business decisions or that his role is limited to signing documents.
The Department of Business Development, according to a report by The Nation dated May 8, 2026, is conducting investigations in two main categories. The first covers companies in which foreign shareholders hold from 0.01 to 49.99 percent of the shares, but there are indicators that Thai shareholders may be acting as intermediaries. The second category refers to companies in which the foreign share exceeds 50 percent and which, if operating in restricted activities without the required approval, could be violating the Foreign Business Act. In the first category, according to the same source, authorities mentioned about 118,016 companies with such a level of foreign shareholding and approximately 53,000 potentially risky business links that are being further examined.
For entrepreneurs, this means that the mere fact that a company is formally majority Thai is no longer sufficient to eliminate regulatory risk. If the foreign partner provides the money, controls the directors, manages bank accounts, leads negotiations, receives the benefit or decides on the business, authorities may conclude that this is concealed control. In this sense, the focus of oversight has shifted from paperwork to the actual situation, which is important for the real estate market and tourism services, where such models have often been used to access land, villas, restaurants, hotels or agency businesses.
Real estate, hotels and tourism among the riskiest sectors
According to The Nation's report, authorities singled out tourism and related activities, land and real estate trading, e-commerce, logistics and warehousing, hotels and resorts, agricultural activities and general construction as particularly sensitive sectors. Such a list shows that the problem is not viewed only as a matter of land ownership, but as a broader business model in which foreign capital can be hidden behind local structures in order to enter activities with restricted access. In tourist centers this is most often connected with villas, restaurants, small hotels, rental services and real estate brokerage.
The real estate market is especially important because Thai law generally restricts direct foreign ownership of land. Although there are lawful ways to invest, for example through permitted business structures, leases or prescribed condominium quotas, authorities pay special attention to situations in which a company is used as a vehicle for holding land for the benefit of foreigners. According to reports by Thai media, inspections analyze financial statements, land items in balance sheets, lease agreements, rental income and the connection of shareholders with other companies.
Tourism is the second key part of the story because in certain island and coastal communities the business models of foreign communities can develop beyond the reach of local regulators. Thai authorities have expressed concern about closed business and residential communities in areas such as Koh Samui, Phuket and Pai, where, according to available reports, certain activities are organized almost exclusively for foreign residents or investors. Such development does not necessarily have to be illegal in itself, but it becomes subject to oversight when it is connected with undeclared business, violations of immigration and labor rules, improper hotel permits or concealed ownership.
Stricter registration from the beginning of 2026
Thailand's Department of Business Development has introduced stricter registration requirements to prevent the creation of new suspicious structures. According to Thairath's report, from January 1 and April 1, 2026, measures were introduced requiring financial evidence, including bank statements, for risky cases in which foreign shareholders hold less than 50 percent of shares or in which foreigners are authorized directors. Thai shareholders in such situations must prove that they actually invested their own capital, and directors during registration must confirm that shareholders are not merely intermediaries for foreigners.
According to the same report, the Department of Business Development claims that the new checks have led to a significant drop in the number of high-risk legal entities suspected of potentially being nominee structures. The institution states that registrars will more thoroughly check financial flows and reject applications in which actual investment cannot be confirmed. This change is important because oversight no longer relies exclusively on later raids or criminal proceedings, but is being moved to the initial phase of incorporation and changes in ownership structure.
In practice, this may slow down the registration of some companies, but also reduce the space for the mass use of local shareholders without a real economic role. For lawful investors, documentation will be crucial: proof of capital payment, clear contracts, an actual division of management rights, accounting transparency and compliance with permits. For Thai nationals who agree to be formal shareholders without actual investment, the risk becomes significantly greater because authorities no longer view them only as administrative participants, but as possible facilitators in circumventing the law.
Legal framework and possible penalties
The Foreign Business Act of 1999 is the basic regulation by which Thailand governs activities that are prohibited, restricted or conditional for foreign persons and foreign companies. According to materials from the Department of Business Development, business activities are classified into three lists. The first covers activities that foreigners may not conduct for special reasons, including land trading and certain basic activities connected with traditional sources of income. The second relates to businesses connected with national security, culture, natural resources or the environment, while the third covers activities for which Thai entrepreneurs are considered not yet ready for full competition from foreign capital without special approval.
According to published interpretations by Thai authorities and media, concealing foreign ownership through Thai nationals can lead to criminal sanctions. Thairath states that violations connected with nominee structures under the relevant provisions of the Foreign Business Act can be punished by imprisonment of up to three years and a fine of up to one million baht. Authorities can also forward cases to the police, the revenue department, the anti-money laundering office, the Department of Special Investigation and other bodies, depending on whether a tax, labor, immigration or financial offense is discovered alongside concealed ownership.
It is important that criminal risk does not apply only to the foreign investor. Thai nationals who knowingly hold shares on behalf of foreigners may also be subject to proceedings. Accountants, auditors, legal advisers and registration intermediaries may come under additional scrutiny if they participated in preparing documentation that conceals the actual situation. Thai authorities especially announce checks of financial statements for the previous five years, comparison of registration data with accounting records and the forwarding of suspicious cases to specialized agencies.
Broader state response
At the end of April 2026, the Thai government announced a more coordinated approach by signing a memorandum of cooperation with 23 agencies to combat nominee business and so-called grey capital. According to an announcement by the Government Public Relations Department, the goal is to connect the data and powers of different bodies in order to more easily detect networks that use local intermediaries, false ownership structures or financial accounts to conceal actual control. Such an approach shows that the problem is no longer treated only as a matter of business registration, but as a combination of economic oversight, security, tax discipline and the fight against financial crime.
The Nation states that among the institutions involved in further checks are the Ministry of Interior, the Ministry of Commerce, the Ministry of Labour, the Ministry of Foreign Affairs, the police and security services. The Ministry of Commerce is responsible for stricter registration procedures and checking business applications, while other bodies can check work permits, immigration status, land records, tax obligations and suspicious financial flows. Such a division of responsibilities is especially important in cases in which one company simultaneously manages real estate, provides tourism services, employs foreign workers and receives revenue through several connected accounts.
Thai authorities are trying to send two messages. The first is that foreign investments remain welcome if they are carried out through lawful channels, with a clear ownership structure and the necessary permits. The second is that the long-standing practice of relying on formal domestic shareholders can no longer be considered a safe way to circumvent restrictions. For investors in tourist areas, this means that inspections will be more concrete, more demanding in terms of documentation and focused on actual control, not only on ownership percentages listed in the register.
Consequences for investors and the local market
Increased oversight could in the short term cause caution in the market for luxury villas, tourist rentals and smaller hotel projects, especially in areas with a large number of foreign buyers. Companies with proper documentation and genuine Thai partners could more easily prove the legality of their operations, while structures created solely for owning land or conducting a restricted activity will be exposed to greater risk. For local entrepreneurs, the measures could mean stronger protection against unfair competition, but only if enforcement is carried out consistently and without selectivity.
On the other hand, excessively broad or unclear application of the rules could create uncertainty even for lawful investors. That is why in the coming period it will be crucial how Thai institutions distinguish genuine joint ventures from concealed ownership arrangements. If checks are based on clear criteria, financial evidence and equal treatment of all market participants, the measures can contribute to greater transparency. If the criteria remain unclear, some investors could postpone projects until practice stabilizes.
For now, it is clear that Thailand is entering a phase of stricter oversight over an area that has long existed in a grey zone between formal legality and actual control. Real estate and tourism remain at the center of attention because the consequences of concealed ownership are most quickly visible there: rising land prices, pressure on local communities, an unequal position for domestic entrepreneurs and more difficult oversight of income from tourism services. The further course of the campaign will depend on how successfully authorities manage to connect registers, financial data and field inspections into a system that distinguishes lawful investments from constructions designed to circumvent Thai rules.
Sources:
- Government Public Relations Department, Thailand – announcement on the memorandum of 23 agencies to combat nominee business and grey capital (link)
- Thairath Online – report on checks by the Department of Business Development, tourist areas, new registration rules and penalties (link)
- The Nation Thailand – analysis of the expansion of the investigation, risky sectors, company categories and five-year financial checks (link)
- Department of Business Development, Ministry of Commerce – official materials on the Foreign Business Act and the classification of restricted activities (link)