Why Nominee Shareholders Are a Red Flag — and What to Do Instead
Key takeaway: Using Thai "nominee" shareholders to hold shares on a foreigner's behalf — purely to bypass foreign ownership limits — is illegal under the Foreign Business Act. Legitimate routes to majority or full foreign ownership exist: BOI promotion, the US Treaty of Amity, or a Foreign Business License.
What counts as a nominee?
A nominee is a Thai national listed as a shareholder who does not genuinely invest, control, or bear risk — they simply "hold" shares so the company appears majority Thai-owned. Section 36 of the Foreign Business Act B.E. 2542 prohibits this. The DBD actively audits shareholding, capital sources, and director arrangements.
Why authorities can tell
Red flags include Thai shareholders with no proof of paid-up capital, declared income far below their shareholding value, identical signatories across many foreign-linked companies, and shareholder loans mirroring the share value.
The risks
- A fine of THB 100,000–1,000,000 and/or up to 3 years' imprisonment under Section 36 of the Foreign Business Act — for both the foreigner and the Thai nominee
- A further daily fine of THB 10,000–50,000 until the arrangement is unwound
- Forced restructuring or dissolution
- Loss of work permits and visas tied to the company
Legitimate alternatives
- BOI Promotion — up to 100% foreign ownership in promoted activities.
- US Treaty of Amity — Americans may own up to 100% of most businesses.
- Foreign Business License — case-by-case approval.
- Genuine Thai partnership — a real investor who shares risk.
General information, not legal advice. Speak with a licensed advisor.