Five targets searched as Thailand expands foreign business nominee probe

Thai authorities have widened their crackdown on suspected foreign nominee arrangements, searching five targets linked to property, hotel and wellness businesses after identifying a law firm connected to more than 150 companies.

The operation forms part of an investigation into 34 companies suspected of using Thai nationals as nominee shareholders to circumvent restrictions under the Foreign Business Act 1999, according to the Department of Business Development.

Poonpong Naiyanapakorn, director-general of the department under the Ministry of Commerce, said information on the companies had been forwarded to the Department of Special Investigation for further examination.

The initial searches covered five targets involving Chinese- and Israeli-linked businesses, property developments, hotels and wellness facilities. Investigators are examining who supplied the investment funds, who exercised effective control over the companies and whether the Thai shareholders were genuine investors.

Law firm linked to more than 150 companies

One of the principal targets was P law firm, which came under scrutiny after investigators expanded an inquiry into a legal entity in Koh Samui district, Surat Thani.

The investigation found that the law firm was connected to more than 150 companies. Its address had also been registered as the head office of more than 103 legal entities.

Authorities suspect the firm may have assisted, supported or participated in shareholding arrangements that enabled foreign nationals to avoid restrictions on businesses reserved or restricted under Thai law.

The scale of the connections has raised questions over whether the firm served as part of a wider corporate-registration network rather than being associated with a single company.

Chinese-linked property group investigated over land and control

Authorities also searched a group identified as J, which is suspected of using Thai nationals to hold shares on behalf of foreign investors for the acquisition of land and the operation of property businesses.

A Chinese company was identified as the project developer, while Chinese directors and executives appeared to have clear roles in setting policy, managing operations and directing the business, the department said.

The development’s address was also registered to at least five related companies.

Investigators believe the entities may have operated as an interconnected network covering project management, construction and the holding of property and other assets.

Koh Phangan business faces separate licensing checks

Company B came under investigation following an examination of an Israeli-linked company suspected of operating through nominee shareholders.

Investigators found at least five affiliated companies registered at the same address, with the same group of people appearing as directors and shareholders.

One of the businesses operated accommodation on Koh Phangan and advertised itself as a rehabilitation centre, wellness yoga centre and treatment facility. The business reported total assets exceeding 100 million baht.

Koh Phangan district authorities found no hotel operating licence during their inspection.

The Surat Thani Provincial Public Health Office is separately examining whether the establishment has a licence under the Health Establishment Act 2016.

Thai shareholders’ financial capacity examined

Company N, which has operated a hotel business in Koh Samui since 2013, is also under investigation.

The company has a Thai director and both Thai and Israeli shareholders.

Officials are checking the source of the investment funds and whether the Thai shareholders had the financial capacity to pay for their shares.

The findings will be used to determine whether the shareholding represented a genuine joint investment or whether the Thai investors were acting on behalf of foreign nationals.

The authorities have not yet announced a final conclusion on the company’s ownership structure.

Company with 330 million baht in assets holds multiple land plots

Company L, which develops and rents residential accommodation, was another target of the operation.

The company has Thai shareholders, while an Israeli national is both a shareholder and a director. It reported total assets exceeding 330 million baht.

Investigators found that the company owned three plots of land acquired for more than 11 million baht.

The same address was also registered as the head office of six other companies involving the same groups of Thai and Israeli shareholders and directors.

One related legal entity owned another eight plots of land valued at more than 30 million baht.

Officials said the site appeared to operate as a resort and was believed to cater exclusively to foreign tourists.

Commerce Ministry promises coordinated legal action

Poonpong said the Ministry of Commerce would continue examining suspected nominee arrangements and strictly enforce the law.

Where Thai nationals are found to have held shares on behalf of foreign investors, or where businesses are found to have operated in breach of foreign-business restrictions, the ministry will coordinate with all relevant agencies to prosecute those involved, he said.

The investigation could extend beyond the companies and foreign investors to Thai shareholders and professional advisers suspected of facilitating unlawful arrangements.

The companies and individuals concerned remain under investigation, and the allegations have not yet been established through final legal proceedings.