The case was uncovered during inspections carried out on Jan 29-30 by the Department of Business Development (DBD) together with the Department of Special Investigation (DSI), Phuket Tourist Police, Phuket Immigration and the Phuket Provincial Tourism and Sports Office, with support from the Phuket Provincial Commerce Office.
The joint team targeted tourism-related businesses – including tour operators, hotels, restaurants and boat rentals – suspected of using Thai nationals as nominees to conceal foreign control.
DBD Director-General Poonpong Naiyanapakorn said inspections of 10 high-risk businesses and associated accounting and law firms uncovered multiple red flags, including companies operating from the same address, individuals falsely presenting themselves as company directors to officials, and employees of accounting or law firms appearing as shareholders or directors in companies with foreign involvement.
Three of the inspected companies were found to be registered at the same address as an accounting firm. During one inspection, an accountant was found impersonating a legal entity director and using another person’s national identification card to provide information to officials in place of the actual director.
Police charged both the director and the accountant under the National Identification Card Act B.E. 2526 (1983) for allowing the use of another person’s ID card and using another person’s ID card.
Authorities also inspected law firms and accounting firms deemed high-risk because their directors held shares in companies with unusually high numbers of foreign shareholders or directors.
Five individuals have been summoned to clarify their roles. Of these, three were found to have placed company employees or accountants as directors and shareholders in businesses where foreigners also hold directorships or shares – a pattern officials say is consistent with nominee practices.
Mr Poonpong noted that Phuket is considered a high-risk province, with 29,090 registered companies. Of these, 11,263 – or 38.72% – show foreign investment in partnership with Thai nationals.
In all of these cases, foreign shareholding is recorded as less than 50%, enabling the businesses to operate outside the restrictions of the Foreign Business Act B.E. 2542 (1999). This, he said, raises concerns that Thai nationals may be acting as nominees to conceal foreign control in a significant number of cases.
Those found to have clearly violated the law will be prosecuted, while cases with ambiguous details will be subject to further summons and investigation. The DBD and partner agencies will now carry out deeper probes to determine whether individuals or firms assisted foreigners to operate businesses illegally, Mr Poonpong said.
“The Department and all partner agencies are committed to seriously and continuously preventing and suppressing nominee arrangements, to create a transparent and fair business environment, deter dishonest practices and strengthen the competitiveness of Thai entrepreneurs,” Mr Poonpong added.
Authorities are stepping up proactive enforcement, using data analysis to identify behavioural patterns of legal entities to make investigations more targeted, while at the same time streamlining processes to facilitate legitimate foreign investment in Thailand, Mr Poonpong said.