Over 400 Phuket companies targeted in latest foreign nominee crackdown

The nationwide crackdown on illegal foreign business ownership has zeroed in on the country's most popular island. Over 400 companies in Phuket are now under active investigation for suspected "nominee" violations, according to an announcement by Deputy Interior Minister Polpee Suwanachawi.

This sweeping local probe is the latest escalation in an ongoing nationwide campaign. As we previously reported, Thai authorities recently flagged nearly 47,000 companies across the country for potential nominee structures, though only 852 were formally charged. Now, the focus has shifted to regional tourism hotspots, with Phuket joining Huai Khwang in Bangkok and Koh Phangan—where 34 firms were recently raided and 150 million baht seized—as primary targets.

Concurrently, the Ministry of Commerce is holding discussions with professional councils to cut off the legal and accounting networks that facilitate these illegal business setups (in Thai).

What this means for you

If you operate a business in Thailand, particularly in a tourism-heavy province like Phuket, the grace period for questionable corporate structures is effectively over. A "nominee" structure—where a Thai national holds 51% of shares on paper but has no actual financial investment or voting power—is illegal under the Foreign Business Act.

With authorities actively scrutinizing company registries, foreign business owners should take immediate steps to ensure compliance:

• Review your shareholder structure: Ensure your Thai partners are legitimate investors who can prove the source of their investment funds.
• Prepare for audits: Keep meticulous financial records, bank statements, and minutes of shareholder meetings ready for inspection by the Department of Business Development (DBD).
• Consult qualified legal counsel: If your company was set up years ago using a "turnkey" service that provided Thai shareholders, seek independent legal advice immediately to restructure legally.

While the initial nationwide probe resulted in a relatively low number of formal charges compared to the businesses flagged, the targeted regional approach in Phuket and Koh Phangan suggests authorities are now moving from data gathering to active enforcement.