Thailand’s Office of the Ombudsman is urging swift legislative reform to curb the rising use of Thai nationals as nominee shareholders to mask foreign ownership in restricted sectors.
Key takeaways
- Thailand’s Ombudsman is pushing for urgent legal reforms to combat the widespread use of Thai nominees by foreigners to skirt ownership restrictions.
- The issue spans over 10 industries and is now considered a national security threat, linked to a fatal building collapse in Bangkok’s Chatuchak district.
- Proposed measures include amending the Foreign Business Act, tougher penalties, asset confiscation, and the formation of a central task force led by the Prime Minister.
The matter, now affecting over 10 industries, is being framed as a national security threat and has been linked to the recent collapse of a building in Bangkok’s Chatuchak district.
Ombudsman Songsak Saichuea urged the government to prioritize the issue on the national agenda, proposing sweeping legal reforms and harsher penalties, including land and asset confiscation for violators.
In January, the Ombudsman’s Office submitted a formal proposal to the Cabinet outlining the urgency of the nominee issue, which Songsak said is expanding rapidly and poses a serious concern for the public.
The collapse in Chatuchak, reportedly involving a business with suspected nominee structures, has intensified scrutiny.
A joint investigation with relevant agencies revealed that foreign individuals and corporations are increasingly exploiting legal loopholes by registering businesses through Thai nominees, a direct violation of Thailand’s Foreign Business Act, which restricts foreign ownership in certain sectors.
As of 2025, Thailand has 926,950 registered companies, 127,522 of which have foreign shareholders. Of those, 18,288 have a 49% foreign stake, the maximum allowed under current laws without triggering foreign company classification.
He stressed the absence of a centralized law directly regulating nominee arrangements. While various laws contain relevant clauses, no single agency oversees the matter comprehensively.
The Ombudsman recommends a new dedicated legal framework and the amendment of the Foreign Business Act to clearly define nominee behavior, especially when effective control lies with a foreign party.
Key proposals include mandatory financial background checks on Thai shareholders dating back five years, enhanced penalties with prison terms of 5–7 years, steeper fines scaled to company size, and court-ordered confiscation of assets acquired through nominee schemes.
Songsak also called for a central coordinating committee chaired by the Prime Minister and the establishment of provincial monitoring mechanisms, particularly in economically sensitive zones like durian plantations and fruit orchards.
He urged enforcement agencies, including the Royal Thai Police, to intensify crackdowns and prevent further abuse of Thailand’s legal system by foreign actors engaging in nominee-based business structures.
