Thailand remains attractive for foreign investors. At the same time, it is becoming increasingly clear that structures in which Thai individuals appear only on paper as shareholders, directors, or persons in management positions are no longer tolerated as they may have been in the past.

The focus is on so-called nominee structures. These are companies in which Thai individuals formally hold shares or assume management functions, while in economic reality a foreign investor exercises control.

What is a nominee structure?

A nominee structure typically exists where a Thai national or Thai company is appointed as a shareholder solely so that a foreign investor can circumvent Thai ownership or business restrictions.

On paper, the company appears to be Thai-controlled. In economic reality, however, the foreign investor makes the decisions. This may happen, for example, through internal agreements, powers of attorney, loan agreements, voting arrangements, or other side agreements.

It is precisely this discrepancy between the formal structure and the economic reality that is now attracting closer attention from the authorities.

What changed in 2026?

With DBD Order No. 1/2569, Thailand’s Department of Business Development has tightened the review of certain corporate changes. The Order came into force on 1 April 2026 and is aimed in particular at so-called nominee structures.

These are companies which, according to the official registration documents, are predominantly held by Thai shareholders, but where the Thai shareholders may only be acting as trustees or nominees for foreign investors.

Particularly relevant are changes through which a foreigner is appointed as the sole authorised director, as a co-signing director, or through which the actual influence of foreign persons increases.

In such cases, the responsible director or partner must submit a written Investment Confirmation. This confirmation must state that the registered shareholders have actually contributed their capital from their own funds and that no Thai persons are acting as nominees for foreigners.

What is new is, above all, that the authorities are no longer looking only at the formal shareholder list. They are increasingly examining who actually provided the capital, who controls the company, and who benefits economically. Bank documents and capital flows may also become relevant.

Why is this important for foreign investors?

Many foreign investors assume that a Thai company is automatically unproblematic as long as at least 51 percent of the shares are held by Thai nationals. This is a dangerous misconception.

What matters is not only what is recorded in the commercial register. It also matters whether the Thai shareholders are genuine investors, whether they have contributed their own capital, whether they have an economic interest, and whether they actually play a role in the company.

For example, the following may be suspicious:

• Thai shareholders have not contributed their own capital,
• the financing effectively comes from the foreign investor,
• Thai shareholders have no real decision-making authority,
• the foreign minority shareholder effectively makes all decisions,
• voting agreements or powers of attorney transfer control to the foreigner,
• profits or economic benefits mainly flow to the foreign investor,
• the same Thai person appears as a shareholder in many companies.

Such points may indicate that the company is only formally Thai, but is in fact controlled by foreigners.

What legal risks exist?

The Foreign Business Act prohibits Thai persons from acting as nominees for foreigners if this is used to circumvent restrictions on foreign business activities.

Section 36 of the Foreign Business Act provides for imprisonment of up to three years, fines of 100,000 to 1,000,000 baht, or both. Additional daily fines may also be imposed for as long as the unlawful situation continues.

Foreign investors may also be affected by such penalties if they implement or benefit from such a structure. In addition, false statements made to the Registrar may trigger further criminal risks.

Which sectors are particularly under scrutiny?

Sectors in which foreign participation has traditionally often been organised through Thai front structures are particularly risky.

These include, among others:

• real estate,
• tourism,
• hotels,
• restaurants,
• e-commerce,
• logistics,
• construction,
• agriculture,
• certain service sectors.

This does not mean that foreign investment in these sectors is impossible. It does mean, however, that the structure must be properly documented and economically understandable.

What does this mean in practice?

For foreign investors, it is no longer sufficient to register a company in a formally correct way. The substance of the structure must also be correct.

This means that the Thai shareholders must be genuine economic participants. Their capital contributions must be traceable. The decision-making structures must match the shareholder structure. Contracts, powers of attorney, loans, and internal arrangements must not result in the Thai participation being merely a facade.

Anyone who already holds a company with Thai shareholders should therefore have the structure reviewed to determine whether it remains sustainable under the stricter administrative practice.

What should existing companies do now?

Anyone who already holds a Thai company with a possible nominee structure should not wait. A legal and tax review is advisable.

In particular, the following points should be examined:

• Who contributed the capital?
• Are there loans or side agreements between the foreigner and the Thai shareholders?
• Who controls the bank accounts and business decisions?
• Who signs contracts?
• Who receives profits or economic benefits?
• Are there powers of attorney, voting agreements, or blank share transfer forms?
• Does the company have a genuine business purpose?
• Do the accounting records, tax returns, and actual business activities correspond with each other?

Depending on the result, different solutions may be considered: restructuring, genuine participation of Thai partners, applying for a licence or approval, selling assets, liquidating the company, or another legally permissible reorganisation.

Conclusion

Thailand remains open to foreign investment. What is increasingly less accepted, however, are artificial structures in which Thai persons are used only as formal nominees.

The message from the authorities is clear: it is not only who appears in the register that matters. What matters is who actually invests, controls, and benefits.

Foreign investors should therefore not wait until an authority starts asking questions before reviewing their structures. An early, clean, and professionally supported review is usually far better than a later correction under pressure from the authorities.

This article does not replace legal advice. Anyone who already holds a Thai company or is planning an investment in Thailand should have the specific structure reviewed by specialised legal and tax advisers.