Thailand Moves to Tighten Rules on Nominee Shareholders: New Corporate Registration Measures Expected April 2026

New Department of Business Development measures expected to take effect on 1 April 2026 will expand verification procedures for corporate amendments involving foreign participation under the Foreign Business Act.

Thailand’s Department of Business Development (DBD), operating under the Ministry of Commerce, is preparing to introduce additional regulatory measures aimed at preventing the use of Thai nationals as nominee shareholders for foreign investors. The initiative represents the latest development in a broader enforcement campaign against corporate structures designed to circumvent restrictions contained in Thailand’s Foreign Business Act B.E. 2542 (1999) (FBA). Authorities have indicated that the new regulation is expected to enter into force on 1 April 2026 following the completion of the public consultation process. 

The proposed regulation is formally titled the “Office of the Central Partnership and Company Registration Order No. …/2569 on Criteria and Methods for Registration in Cases of Amendments Adding Foreigners as Partners in Partnerships or Adding Foreigners as Authorized Signatories in Limited Companies.” The draft order is intended to expand the scrutiny applied not only during the initial registration of companies but also during post-incorporation amendments that may introduce foreign participation or control. 

Thailand’s renewed focus on nominee shareholding reflects longstanding concerns about the scale of such arrangements within the country’s corporate sector. According to data released by the DBD, there are currently 782,542 active companies operating in Thailand. Among these, approximately 118,016 companies are formally classified as Thai companies despite having foreign shareholdings ranging between 0.01 percent and 49.99 percent. Authorities estimate that more than eighty percent of these entities may involve Thai nationals holding shares on behalf of foreign investors in nominee capacity.  

Nominee structures have historically been used in sectors subject to restrictions under the Foreign Business Act, which limits foreign participation in certain categories of business unless specific permissions or licenses are obtained. Regulators have increasingly characterized the widespread use of nominee arrangements as a structural problem affecting fair competition within Thailand’s economy and undermining the regulatory objectives of the FBA. 

The current regulatory initiative builds upon earlier enforcement measures implemented through DBD Order No. 2/2568, which took effect on 1 January 2026. That order introduced stricter documentary requirements for company registrations involving foreign partners. In particular, Thai shareholders participating in companies with foreign shareholding below fifty percent, or companies in which foreigners hold signatory authority, are now required to submit bank statements demonstrating their financial capacity to subscribe to the shares held in their name. These statements must show a minimum transaction history and allow authorities to verify the origin of the funds used for share subscriptions. According to the DBD, this measure alone has reduced attempted nominee registrations by approximately sixty-five percent since the beginning of 2026. Nevertheless, authorities acknowledge that certain parties have continued attempting to circumvent the rules, prompting the preparation of further regulatory measures. 

The new draft order focuses primarily on corporate amendments that may introduce foreign involvement after a company has already been established. Under the proposed framework, certain amendments will trigger mandatory in-person verification procedures before the registrar.  

In the case of registered partnerships, when a partnership that originally consisted entirely of Thai partners proposes amendments resulting in foreign partners joining and holding less than fifty percent of the partnership capital, the registrar may require all existing partners as well as incoming Thai partners to appear in person before the registration authority. During this process, the individuals must present valid identification documents and provide formal statements confirming that they are not acting as nominees on behalf of foreign investors. 

Similar procedures are proposed for limited companies. Where all existing authorized directors of a company are Thai nationals and a proposed amendment seeks to appoint a foreign national as an authorized director or grant signatory authority to a foreigner, the registrar may require personal appearances from both existing and incoming directors. These individuals must present valid identification and confirm officially that they are participating in the company in their own capacity rather than acting as nominees. 

Although the draft regulation contemplates certain exceptions in cases where personal appearance is not feasible, such exceptions require approval from senior officials within the Department of Business Development, including directors of the central business registration divisions or relevant district offices. The objective of these procedures is to strengthen verification mechanisms and ensure that corporate amendments introducing foreign participation are subject to scrutiny comparable to that applied during initial company registrations. 

Recent enforcement actions have also extended into tourism-related sectors. Authorities on Koh Phangan have reportedly investigated luxury villa development projects involving foreign investors where companies with registered capital exceeding one hundred million baht allegedly employed Thai nominee shareholders to circumvent foreign ownership restrictions. Such investigations illustrate the government’s focus on sectors historically associated with nominee structures, including tourism and hospitality, real estate development, and service businesses. 

In parallel with these investigations, the DBD has strengthened cooperation with other government agencies. A notable development has been the integration of company registration data with the databases of the Anti-Money Laundering Office. This allows registrars to conduct real-time screening of shareholders and directors during the registration process. Where individuals appear on AMLO watch lists, registrars may require additional financial documentation, verification of business premises, and personal appearance of company representatives before proceeding with registration. 

Another enforcement mechanism concerns verification of registered office addresses. Under existing practice, when a proposed registered office address is already used by five or more juristic persons, registrars may require additional documentation confirming the legal right to use the premises. This measure is intended to address the widespread use of virtual office addresses and shared workspaces in company registrations. Companies seeking to register at such addresses may be required to provide consent letters from property owners and evidence that the premises are suitable for genuine business operations. 

The legal foundation for enforcement actions against nominee structures remains the Foreign Business Act B.E. 2542 (1999). Section 36 of the Act addresses Thai nationals or juristic persons who assist foreigners in conducting restricted business activities by acting as nominees or holding shares on their behalf. Violations may result in imprisonment for up to three years, fines ranging from one hundred thousand to one million baht, or both. Courts may also order the cessation of the unlawful arrangement or termination of the shareholding structure. 

Section 37 of the Act applies to foreign investors who conduct restricted business activities through nominee arrangements. Foreign principals who circumvent the law by using Thai nominees face the same criminal penalties, including imprisonment of up to three years and fines of up to one million baht. In cases where offenders fail to comply with court orders requiring the cessation of nominee arrangements, additional daily fines of ten thousand to fifty thousand baht may be imposed until compliance is achieved. 

Thai Supreme Court decisions have reinforced the applicability of these provisions. In Supreme Court Decision No. 17923/2557 (2014), which involved land ownership on Koh Samui, the Court convicted both the foreign investor who controlled the land through a nominee structure and the Thai national who acted as nominee shareholder. In another case, Supreme Court Decision No. 5457/2560 (2017), the Court determined that loan agreements designed to give foreign investors effective control over Thai companies constituted prohibited nominee arrangements under the Foreign Business Act. 

From a compliance perspective, the evolving regulatory environment requires businesses and investors to pay close attention to the transparency of their corporate structures. Thai shareholders participating in companies with foreign elements must be able to demonstrate genuine financial capacity to acquire their shares. Authorities increasingly expect supporting documentation such as bank statements showing transaction histories and evidence of actual fund transfers corresponding to share subscriptions. 

The implications of the proposed measures extend beyond initial company formation. Corporate amendments, including share transfers, changes of directors, and adjustments to signatory authority, are increasingly likely to be subject to detailed verification procedures. Companies that involve foreign participation should therefore consider reviewing their existing structures to ensure that ownership arrangements and funding sources can withstand increased scrutiny. 

If implemented as anticipated, the regulation will mark another step in Thailand’s ongoing shift from formalistic company registration procedures toward a system that places greater emphasis on verifying the substantive reality of ownership and control. For investors, corporate service providers, and legal practitioners alike, the coming months are likely to bring a continued evolution of Thailand’s regulatory landscape regarding foreign participation in local businesses.

If you have any questions regarding the new corporate registration measures in Thailand. Please feel free to contact us at [email protected]