Samui, Pha-ngan first targets in nominee firm crackdown

Thailand’s Department of Business Development (DBD) has teamed up with the Department of Special Investigation to crack down on foreign-controlled companies using Thai nominees as majority shareholders, initially targeting Samui and Pha-ngan islands in Surat Thani.

DBD Director General Poonpong Naiyanapakorn said the enforcement follows numerous complaints from Thai firms about unfair competition from foreign investors operating businesses reserved for Thais. There have also been complaints about nuisance behaviour and disrespect for Thai laws by foreign tourists.

He said the department has screened 11,426 companies with foreign investment on Samui and Pha-ngan islands to determine the extent of Thai nominee shareholding.

After the two Surat Thani islands, the crackdown will focus on Phuket, Pattaya, Hua Hin, Krabi and Phang-nga, Poonpong said.

In Phuket, there are 11,626 registered companies with foreign investment, accounting for 39.22% of all registered firms in the province. The top foreign investors are Russian, Chinese, British and Australian nationals.

In Krabi, there are 749 companies with foreign partners, accounting for 20.88% of all companies in the province. The top foreign investors are British, Swedish, French, American and Italian nationals.

In Phang-nga, there are 346 foreign co-invested companies, accounting for 20.53% of all registered companies there. The top foreign investors are German, British, Swedish, French and American nationals.

In Hua Hin, there are 2,081 foreign co-invested companies, accounting for 51.24% of all companies there. The top foreign investors are British, Swedish, French, German and Norwegian nationals.

In Pattaya, there are 19,910 firms with foreign investment, accounting for 59.76% of all companies there. The top foreign investors are Chinese, British, Russian, Indian and German nationals.

Poonpong admitted that the use of Thai nominees by foreign investors has become a national issue, prompting the prime minister to order a crackdown on the malpractice.

He said a Thai accounting firm on Pha-ngan Island had acted as a nominee shareholder in 66 foreign-controlled firms.

Meanwhile, DSI Director General Yutthana Praedam said the Anti-Money Laundering Office will propose a bill to classify the use of Thai nominees by foreign investors as a money laundering offence, allowing authorities to seize offenders’ assets upon conviction.