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Nominee shareholder in Thai Company


In Thailand, the landscape of foreign business ownership is intricately defined by the 1999 Foreign Business Act (FBA), which sets clear boundaries for foreign participation in Thai companies. At the heart of these regulations is a cap that generally restricts foreign shareholders to owning no more than 49% of a Thai company. This legislative measure aims to balance economic opportunities with protective measures for domestic enterprises.

Understanding the Concept of Nominee Shareholders

A common yet legally precarious method that some foreign investors consider to bypass these restrictions is through nominee shareholders. This arrangement involves Thai nationals holding shares on behalf of foreigners, creating an illusion of Thai majority ownership while the real control lies with the foreign investors. Such practices are not only against the spirit of the FBA but are explicitly forbidden, risking severe legal repercussions.

The Legal Implications and Consequences

The Thai government, through the enforcement of the FBA and vigilant oversight by agencies like the Department of Business Development (DBD) and the Department of Special Investigation (DSI), maintains a strict stance against nominee shareholding. They employ a multi-faceted approach to identify such arrangements, scrutinizing aspects such as the source of the company's capital, the genuine control and management of the company, and the flow of dividends. Penalties for non-compliance can be harsh, ranging from mandatory restructuring to fines and potential dissolution of the business.

Recent Enforcement Efforts

Recent enforcement actions have seen raids and investigations targeting businesses and consultancy firms suspected of facilitating nominee shareholding arrangements. These moves highlight the government's dedication to upholding the law and ensuring fair business practices within the country. Especially since the "David" incident in Phuket, a large number of foreign-invested companies have been investigated for their legality. Recently, 89 companies were punished for suspected violations of the law.

Advice for Foreign Investors

For foreign entrepreneurs and investors looking to enter the Thai market, the message is clear: adhere to the legal frameworks and avoid shortcuts that promise easy solutions but potentially lead to legal complications. Consulting with reputable legal and business experts who understand Thai regulations can provide a pathway to success that respects the law and contributes positively to the Thai economy.


Setting up a business in Thailand as a foreign investor requires careful planning and adherence to the country's legal requirements. The allure of using nominee shareholders to circumvent foreign ownership restrictions may seem appealing, but it carries significant risks. Instead, focusing on compliance and seeking legal avenues for business operations not only ensures long-term success but also contributes to the integrity and growth of the Thai economy.

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