Thai Authorities Launch Massive Crackdown on Foreign 'Nominee' Firms
The Department of Business Development targets Koh Samui and Koh Phangan as data reveals nearly 70% of local firms are foreign-backed joint ventures
- Thai authorities have launched a major crackdown on foreign "nominee" firms in Koh Samui and Koh Phangan after an audit revealed nearly 70% of local businesses are foreign-backed.
- The investigation has uncovered significant cases, including one Thai national acting as a shareholder for 87 companies and 34 large real estate firms being referred for money laundering probes.
- Officials are closing a loophole from previous "Ease of Doing Business" policies by implementing stricter registration protocols and warning that using Thai proxies will be prosecuted as an "economic crime."
The Department of Business Development targets Koh Samui and Koh Phangan as data reveals nearly 70% of local firms are foreign-backed joint ventures.
Thai commerce officials have launched a major offensive against "nominee" business structures on the popular resort islands of Koh Samui and Koh Phangan.
The move comes after an audit revealed that 67.97% of all registered entities in the area involve foreign joint investment, sparking fears of illegal foreign dominance in the tourism sector.
The Department of Business Development (DBD) has escalated its enforcement of the Foreign Business Act, aiming to restore economic integrity. The investigation has already uncovered one Thai national acting as a shareholder for 87 separate companies, a case that has now been referred to the Department of Special Investigation (DSI).
Closing the 'Ease of Doing Business' Loophole
Poonpong Naiyanapakorn, director-general of the DBD, acknowledged that previous government efforts to simplify business registration had inadvertently created loopholes.
"Historically, we prioritised the 'Ease of Doing Business' over rigorous auditing," Poonpong stated. "This allowed certain groups to use Thai proxies to circumvent ownership laws."
Starting from the 2026 fiscal year, the department has implemented stricter registration protocols. While the government remains welcoming of legitimate international capital, Poonpong warned that those utilizing hidden ownership structures would be prosecuted for "economic crimes."
Islands Under Scrutiny
The scale of foreign capital in Surat Thani province is significant. Out of 16,811 registered companies on the two islands, 11,426 involve foreign partners.
Koh Phangan: Israeli, French, British, and Russian investors lead the market, accounting for roughly 67% of firms.
Koh Samui: French, British, Russian, Chinese, and Israeli nationals dominate the investment landscape.
Forensic Audits and Money Laundering Probes
Authorities are currently pursuing several high-profile cases. On Koh Phangan, an accounting firm is under investigation after its owner was found linked to 89 entities, many of which appear to be "shell" companies with no actual operations.
In another case, a luxury villa development charging THB 13,000 per night was found to be operating without a hotel licence. The project, involving an Israeli-backed firm, is being investigated for potential tax evasion and illegal land holdings valued at THB 152 million.
To further the crackdown, the DBD has handed the files of 34 large-scale real estate firms—each boasting assets exceeding THB 100 million—to the Anti-Money Laundering Office (AMLO) for financial tracing. The crackdown signals a shift in Thai policy, moving away from unchecked expansion towards a more regulated and transparent investment environment.
