Thailand’s Department of Special Investigations (DSI) is currently building a web-based program that can track down individuals who violate the country’s Foreign Business Act.
Specifically, the department will use the program to go after Thais who act as Thai nominee shareholders for foreign investors.
Nominees are Thai nationality shareholders and directors of companies that hope to skirt legal restrictions on foreigners doing business or owning land in Thailand.
Thailand business and land laws require that Thais must own a majority of shareholding of any company operating in a foreigner restricted industry.
The basic requirement is usually 51% Thai nationality ownership. However, certain laws require even greater Thai nationality ownership.
Law offices and real estate sales companies have traditionally been the provider of “nominee” shareholders.
However, nominee ownership is, and has been, clearly illegal for some time in Thailand.
The Thai government’s rationale for requiring by law Thai majority ownership and going after pseudo-shareholders is to safeguard Thai businesses and Thai landowners from unfair competition from large foreign companies.
Authorities have prosecuted numerous companies and individuals for violating Thailand nominee law restrictions.
The DSI’s nominee-tracking program will first launch in Surat Thani and Chiang Mai.