BANGKOK – Oramon Sapthaweetham, Director-General of the Department of Business Development, revealed on December 15 that for the fiscal year 2024 (September 2023-October 2024), the Department has laid out a plan to prevent nominee businesses that use Thais as shareholders to avoid obtaining a business license under the Foreign Business Act.
Initially, the Department is preparing to inspect businesses with a foreign ownership ratio of over 40 percent, totaling 25,000 businesses, to determine if they are in violation of the law.
The target business groups to be inspected include tourism and related businesses, real estate businesses, and hotel and resort businesses, in 9 target provinces: Chiang Mai, Chiang Rai, Phuket, Surat Thani, Chonburi, Rayong, Prachuap Khiri Khan, Phetchaburi, and Bangkok.
“The goal of inspecting nominees for the fiscal year 2023/24 of 25,000 businesses is higher than the previous fiscal year of 15,000 businesses, because businesses in the tourism sector have a growth rate of up to 64 percent, resulting in a large increase in the number of new businesses established by foreign companies in the tourism sector,” Oramon said.
As for the results of the inspection of foreign businesses in 2022/23, 400 businesses were found to be nominee businesses. When the details were examined in depth, there were 8 businesses that committed nominee offenses that had to be sent to the police for prosecution.
Most of these businesses were in the tourism sector in tourist provinces such as Phuket. The foreign shareholders in the nominee companies that were prosecuted were mostly from China, Russia, and Europe.
The offense is punishable by imprisonment for up to 3 years or a fine of 100,000 -1 million baht or both, and a daily fine of 10,000-50,000 baht until the violation is stopped.
The Director-General said that the inspection will select high-risk groups with indications that they may be engaged in businesses on the back of the list by using Thais as nominees to avoid obtaining a license under the Foreign Business Act, such as businesses in which foreigners hold less than 50 percent of the shares, businesses in which foreigners are the authorized persons, and businesses that give foreigners more rights than Thais, including the right to vote, the right to receive dividends, and the right to receive capital repayment when the business is dissolved.
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