PATTAYA, THAILAND – Thai authorities in Pattaya carried out a major crackdown on suspected nominee structures used to let foreigners control businesses via Thai stand-ins, focusing on tourism and real estate firms now ordered to explain their ownership setups at short notice.
Large-scale inspection from 18 to 20 March
According to Poonpong Naiyanapakorn, head of the Department of Business Development, a special team inspected suspicious companies in Pattaya between 18 and 20 March. The operation targeted firms where authorities believed formal ownership and real control might not match.
The department stated that the Tourism Ministry, Tourist Police, DSI special investigators, Immigration and the Chonburi provincial commerce office all took part. Officials described it as a coordinated effort to check compliance with foreign business rules.
What nominee structures mean in Thai law
At the core of the investigation was the allegation that foreigners used Thai nationals as formal shareholders or representatives. Authorities said this allowed economic activities to be conducted without complying with the Foreign Business Act of 1999.
The agencies said they focused on sectors where such schemes were considered particularly common. These included tourism-related services and real estate transactions, both seen as sensitive areas for foreign participation.
Flagged law and accounting offices – One name in 100 firms
Inspectors also checked four accounting and law offices where numerous companies were reportedly registered at the same address. Officials treated these clustered registrations as a possible red flag for nominee setups.
One finding stood out: a single Thai shareholder was said to appear as a shareholder in more than 100 companies, requiring combined investments of at least 300 million baht. Authorities indicated this concentration of ownership would be examined more closely.
Four tour operators face loss of licence
When reviewing legal entities in the tour operator business, investigators initially identified four cases that allegedly showed nominee-type patterns. According to the department, changes in managing directors meant the composition of management no longer met the requirements of Section 17 (1) of the 2008 Tourism and Tour Guide Act and its later amendments.
As a result, on-site orders for licence revocation were posted at the respective businesses. The companies involved were named as Alitea Tour Co., Ltd., Your Indo-Thai Group Co., Ltd., YJ Ace Co., Ltd. and The V-Ex Co., Ltd..
Officials said whether licences would be permanently withdrawn would depend on documents and facts the companies could submit in the short term. The firms were told to clarify their structures to avoid further sanctions.
Real estate deals: three cases and a wider pattern
In addition, authorities examined three foreign-influenced companies that had allegedly bought and sold real estate. They noted that this line of business is considered prohibited for foreigners under existing rules.
The department announced it would secure more evidence and conduct an “in-depth” review of these cases. It also pointed to a broader picture, stating that 146 foreign companies in Chonburi were registered as operating in business fields barred to foreign entities.
Prison terms, heavy fines and daily penalties
The Department of Business Development justified the operation by arguing that nominee structures distort the economic system and disadvantage Thai entrepreneurs. Authorities framed the crackdown as a step to protect fair competition in key sectors.
They also issued a clear warning to Thai nationals who support or advise on such constructions. Those involved could face up to three years in prison or fines ranging from 100,000 to 1,000,000 baht, as well as daily coercive penalties of 10,000 to 50,000 baht for failing to comply with court orders until the violation ends.
“The raid in Pattaya shows how consistently the state is acting against mailbox and nominee models, which in tourism and real estate very quickly slip into grey areas.”
said the article’s commentary section.
“Should Thailand further liberalise foreign business activities or enforce the existing rules even more strictly and transparently – which is the better solution, and why?”
said the commentary, raising an open question about the country’s policy direction.