KOH PHANGAN — A sweeping investigation into suspected foreign-controlled businesses on Koh Phangan has uncovered a complex web of nominee arrangements, with more than 100 companies registered at a single address on the world-famous tourist island in Surat Thani province.
The crackdown comes amid growing outcry from local residents and business owners who say foreign investors are using Thai nominees to illegally circumvent laws restricting land ownership and certain business activities to Thai nationals.
Khomon Inkhong, Vice President of the Phangan Hotel and Tourism Association, said local entrepreneurs have witnessed changing behavior among certain groups of foreign visitors. While most tourists are respectful, some have established businesses that operate outside the legal framework, causing disturbances and unfair competition for legitimate Thai operators.
“This has led to calls for authorities to strictly enforce the law,” Khomon said.
Police Deploy Four-Point Strategy at Tourist Hotspots
National Police Chief Pol. Gen. Kittirat Phanphet has been closely monitoring the situation and outlined comprehensive measures to combat illegal business activities and crimes committed by foreigners, not only on Koh Phangan but also in other major tourist destinations.
The measures include enhanced screening at entry points to prevent blacklisted or banned individuals from entering Thailand. Police will implement four proactive strategies: inspect foreign residences; verify visa extensions before and after approval, especially for high-risk nationalities; arrest overstayers and penalize landlords who provide accommodation unlawfully; and compile local intelligence to conduct coordinated raids with other agencies when suspicious activity is detected.
Authorities will also share information with Interpol to support international crime suppression efforts.
Surat Thani Ranks Second-Highest for Nominee Business Risk
Department of Business Development (DBD) Director-General Poonpong Naiyanapakorn said the agency is prioritizing enforcement against Thai nationals acting as nominees for foreign investors, as this practice distorts the economic structure and disadvantages legitimate Thai businesses. The DBD is coordinating with the Tourist Police, Immigration Bureau, Revenue Department, Land Offices, and local authorities.
Surat Thani has been identified as Thailand’s second-highest risk area for nominee businesses. Investigators discovered that among 7,096 targeted legal entities nationwide, five Thai shareholders—one corporate entity and four individuals—were listed as shareholders in 256 companies based in Koh Phangan. More than 100 of these companies share the same registered office address, raising red flags about the legitimacy of these business structures.
Luxury Villa Project Linked to Israeli Investors Under Scrutiny
During a field inspection on October 21, officials identified two business groups suspected of nominee activity:
First Consultants 47 Co., Ltd., an accounting firm whose owner is listed as a shareholder in 66 different companies—a pattern consistent with nominee arrangements.
Sithaya Beachfront Villa, a luxury development featuring eight villas renting for 13,000 baht ($398) per night, operating without a required hotel license.
Authorities summoned the project manager and six foreign guests for questioning. Preliminary findings indicate suspicious land ownership valued at more than 152 million baht ($4.65 million), held by two Thai-registered companies in which Israeli nationals own 49% of the shares—the maximum foreign ownership allowed under Thai law.
Investigators discovered that another Israeli firm later purchased additional shares, creating a structure possibly designed to evade taxes and conceal true ownership while maintaining effective control beyond legal limits.
The DBD is gathering evidence to submit to prosecutors for legal action and expanding inquiries into related companies to close legal loopholes that allow foreigners to unlawfully control Thai businesses.
Foreign Workers Face Deportation for Restricted Occupations
Department of Employment Director-General Pichet Thongphand said nationwide inspections are underway in Bangkok, Phuket, Chiang Mai, Koh Samui, and Pattaya to ensure all foreign workers are legally employed.
He emphasized that all foreigners must possess valid identification and work permits and must not engage in any of the 40 occupations reserved exclusively for Thai nationals—including professions such as tour guiding, massage therapy, and certain retail activities.
Violators face fines ranging from 5,000 to 50,000 baht ($153–1,530), deportation, and a two-year ban from obtaining new work permits.
Employers who hire unlicensed foreign workers or allow them to work outside their permitted scope face even stiffer penalties: fines of 10,000 to 100,000 baht ($306–3,060) per worker, imprisonment of up to one year for repeat offenses, and a three-year ban on employing foreigners.
“We are taking every complaint seriously,” Pichet said. “There have been numerous reports of foreigners illegally competing with Thai workers across several regions, and we will ensure the law is enforced fairly and decisively.”
The crackdown reflects growing tension in Thailand’s tourism-dependent regions, where local communities are increasingly concerned about foreign dominance in property markets and service industries, while authorities seek to balance welcoming international investment with protecting Thai economic interests.
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