Police arrest over 230 in Phuket as Thailand escalates crackdown on foreign property nominees

The Economic Crime Suppression Division has arrested more than 230 individuals in Phuket for operating a network that illegally assisted foreigners in setting up real estate companies.

This large-scale operation is part of a rapidly expanding nationwide enforcement campaign targeting illegal nominee structures. In nearby Krabi, immigration authorities recently raided five companies in the Ao Nang area, arresting 18 people, including Thai, Indian, and Myanmar nationals. Meanwhile, police in Phuket have also launched "Operation Nominee Rawai Crackdown," targeting luxury villa businesses linked to Russian, Estonian, and French nationals.

The scope of the crackdown is vast. According to the Department of Business Development, authorities are currently investigating more than 36,000 foreign-linked companies across 16 provinces suspected of using Thai nominees to acquire real estate illegally.

Moving beyond paper compliance

For decades, many foreign buyers have relied on Thai corporate structures to hold land and landed property, typically ensuring that Thai nationals hold at least 51% of the shares to comply with the Foreign Business Act.

However, the regulatory landscape is shifting. According to legal advisory firm Mahanakorn Partners, Thai authorities are no longer just looking at the formal 51/49 ownership split on paper. Investigators are increasingly testing the "substance" of these companies. They are examining whether the actual funding, operational control, and economic rights align with the stated ownership structure.

If a Thai shareholder cannot prove they had the legitimate financial means to purchase their shares, or if voting rights are structured to give a minority foreign shareholder total control, authorities may classify the setup as an illegal nominee arrangement.

What this means for you

If you currently hold property in Thailand through a Thai limited company, or are considering buying a villa or land using this method, the risks of non-compliance have significantly increased.

• Review your corporate structure: Ensure that your Thai partners or shareholders are genuine investors with documented proof of funds.
• Check your voting rights: Structures that use preference shares to grant a foreign minority shareholder absolute control are under intense scrutiny.
• Prepare for audits: The Department of Business Development has introduced stricter compliance checks requiring greater financial transparency from companies to verify ownership arrangements.

Foreigners found guilty of using Thai nominees to circumvent foreign ownership laws face severe penalties, including the potential forced sale of the property, heavy fines, and deportation. If you are unsure about the legal standing of your property holding company, now is the time to consult a qualified Thai corporate lawyer to review your setup.