Proxy war – Samui and Phangan see over 11,000 foreign-controlled companies
Over 11,000 foreign-invested businesses now operate on Samui and Phangan islands, with government cracking down on nominee operations in the region
Foreign investment on Thailand’s renowned islands of Samui and Phangan has surged, with 11,426 foreign-owned companies now registered on the two islands.
This represents 67.97% of the total businesses in the area, which amounts to 16,811 companies in total. Despite these companies operating both legally and with potential nominee structures, concerns have arisen regarding the use of Thai nationals as nominees to allow foreign investors to bypass the Foreign Business Act.
According to Poonpong Naiyanapakorn, director-general of the Department of Business Development, the government has launched a comprehensive operation to scan and investigate foreign investment in the area. This comes in response to growing concerns that foreigners have effectively taken control of the islands through nominee arrangements.
Preliminary findings show that foreign investments are concentrated in Phangan and Samui, where investors from France, Israel, Russia, Germany, and others have expanded their businesses in key sectors. A particular concern lies in the real estate and accounting sectors, where nominee practices are believed to be most prevalent.
In Surat Thani, where both islands are located, the department has also flagged 34 large real estate companies with assets exceeding 100 million baht. These companies are suspected of being involved in nominee operations and have been referred to the Anti-Money Laundering Office (AMLO) for further scrutiny. Under the Foreign Business Act, individuals found guilty of supporting nominee practices could face imprisonment of up to three years, a fine of 1 million baht, or both.
The government is not only focusing on Samui and Phangan, but has expanded its investigation to other popular tourist provinces, including Chonburi, Chiang Mai, Phuket, Krabi, and Prachuap Khiri Khan. These regions are under review to assess risks related to nominee businesses, especially those with foreign ownership of 50% or more.
In response, the Department of Business Development is working closely with allied agencies to eradicate nominee businesses in all sectors, both foreign and domestic. The effort is aimed at ensuring a level playing field for local Thai entrepreneurs and reducing economic inequality.
