THAILAND – The Department of Business Development (DBD) said it had identified more than 7,000 companies on the resort islands of Koh Samui and Koh Phangan that were suspected of being nominee or “straw man” firms used by foreigners to hide ownership.
Mass screening uncovers thousands of suspect registrations
The DBD’s initial review flagged the alarmingly high figure as part of a broader sweep targeting business registrations in sectors considered high risk. “First investigations show that more than 7,000 companies on Koh Samui and Koh Phangan risk being nominee firms,” DBD Director-General Poonpong Naiyanapakorn said, describing the islands as a focal point for suspected illegal structures.
The suspected firms were concentrated largely in property and tourism-related activities, including hotels, restaurants and other hospitality ventures. The department said many appeared to involve foreign investors using Thai nationals as registered owners to circumvent restrictions on foreign ownership.
Focus on loophole in shareholding patterns
Authorities revised their screening approach to look specifically at companies where foreigners hold between 0.001% and 49.99% of shares — a range they say is often used deliberately to evade legal limits. Across six high-risk sectors, the DBD identified 46,918 registrations for further scrutiny under the new criteria.
Under the prioritisation system, roughly 1,000 companies that appeared most likely to be nominees were selected for immediate, in-depth investigation. The DBD said those cases would be examined first before investigators moved on to less suspicious registrations.
New committee given wider powers
To strengthen enforcement, the DBD established a special committee to tackle illegal business arrangements. The committee’s role is to review high-risk registrations, ensure compliance with ownership rules and support criminal or administrative action where appropriate.
Following a recent government reshuffle, the Commerce Ministry proposed to Prime Minister Anutin Charnvirakul that the committee be reconstituted under the chairmanship of a deputy prime minister to clarify responsibilities and give the body broader authority.
Interagency coordination expanded
The government said four key agencies would be represented on the new panel to improve coordination: the Department of Special Investigation (DSI), the Anti-Money Laundering Office (AMLO), the Board of Investment (BOI) and the Industrial Estate Authority of Thailand (IEAT). Officials said bringing those bodies into the process would strengthen investigative reach and enforcement capabilities.
Industry impact and legal context
Laws in Thailand limit foreign ownership of land and of certain types of companies. The DBD’s campaign aimed to enforce those provisions more rigorously, officials said, by identifying where legal ownership structures had been misrepresented.
Poonpong warned that long-established businesses could still be affected: “Many companies that have operated for years on the islands may be exposed as illegal nominee arrangements and could face closure,” he said, underscoring the potential scale of the operation.
What it means for investors and islands
Authorities framed the drive as protecting the economic interests of Thai citizens and ensuring that sensitive sectors are not dominated through unlawful structures. The offensive is expected to change the business climate on the tourism hubs, with some foreign investors likely to face legal action or pressure to restructure ownership.
The DBD said the priority was transparency and law enforcement rather than immediate mass closures, but acknowledged that enforcement could have far-reaching consequences for property developers, hotel operators and others accused of using nominee arrangements.
As investigations proceed, officials said they would move methodically, focusing first on the riskiest cases and coordinating with partner agencies to follow up on financial and legal leads. The regulatory push signals a more assertive stance by Thai authorities toward foreign involvement in sectors deemed sensitive, and it will test how businesses on Koh Samui and Koh Phangan adapt to closer scrutiny.