Commerce Ministry crackdown leads to big drop in nominee-prone businesses

A NATIONWIDE crackdown by the Commerce Ministry over the past eight months has led to over 65% drop in businesses at risk of using nominees with more tough measures being launched on Aug. 1, TV Channel 7 said today (June 22).

Investigation of accounting firms in eight tourist provinces, Chonburi, Chiang Mai, Mae Hong Son, Prachuap Khiri Khan, Surat Thani, Phuket, Krabi, and Phang Nga, showed that 29 of these firms and 140 accountants held shares in 2,040 companies with foreign investment totalling 2.528 billion baht.

One individual held shares in 212 companies, totalling 247 million baht. This information has been forwarded to the relevant agencies for further action.

Mr. Poonpong Naiyanapakorn, chief of the Department of Business Development, said his agency together with related government bodies had seriously taken action to prevent and suppress foreigners using Thai nationals as nominees with this aimed at maintaining fair competition in trade and protecting the country’s economic interests.

Six key business sectors were targeted with these being tourism; real estate; e-commerce, transportation and warehousing; hotels and resorts; agriculture; and construction.

In enhancing pre-registration verification measures, the department has mandated that Thai shareholders investing jointly with foreigners, where the foreign investment is less than half, must provide financial statements for the past three months from the date of capital or share payment to prove their genuine investment ability. This measure has been in effect since Jan. 1 this year, resulting in a 51.05% year-on-year reduction in the number of nominee-prone companies during Jan. 1-March 31..

Furthermore, after adding investment verification measures on April 1, the number of companies at risk of using nominees decreased by 65.22% over two months till May 31.

More stringent measures are being prepared and expected to be enforced on August 1.

Regarding post-registration measures, the department is now tougher on companies registering changes on foreign directors with signing authority in the company while screening and compiling data on high-risk legal entities with foreign shareholdings ranging from 0.01% to 49.99%, and analysing the behaviour of high-risk target legal entities.

In undertaking prevention and suppression of nominee businesses, the department carried out in-depth inspections in 34 areas at 11 key provinces namely Bangkok, Chonburi, Samut Prakan, Samut Sakhon, Samut Songkhram, Ratchaburi, Phuket, Krabi, Surat Thani, Chiang Mai, and Tak, during Oct. 1, 2025, and June 22, 2026.

The Department also audited the accounts and financial statements of 3,294 high-risk nominee companies and forwarded the information to relevant agencies for further investigation and law enforcement as follows:

– Revenue Department: Tax audits of 14,800 entities;

– Land Department: 7,394 entities;

– Anti-Money Laundering Office (AMLO): Financial trail investigations of 534 entities;

– Department of Special Investigation (DSI): Legal action against 2,236 entities;

– Economic Crime Suppression Division (ECSD): 2,257 cases;

– Social Security Office: Investigating contribution payments for 137 employees;

– Bangkok Metropolitan Police Command: 53 cases in Huai Khwang district;

– Thai Police Task Force: Further investigation of 2,713 cases;

– Trade Competition Commission: Investigating 15 more coconut processing plants suspected of price fixing;

– Anti-Cyber Scam Centre (ACSC): 2,094 cases.

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Top – Phuket’s Kata beach. Photo – Mst7022 (CC-BY-2.9)