Thailand Closes Nominee Loophole with New Investment Confirmation Requirement

The Department of Business Development (DBD) has officially intensified its crackdown on illegal nominee structures with the issuance of Order 1/2569, effective today. This new regulation introduces a mandatory Investment Confirmation Statement, placing Thai shareholders and directors on the record under threat of criminal prosecution for assisting unauthorized foreign-owned businesses.

Closing the Amendment Loophole

Historically, many foreign investors established companies using Thai-only ownership to bypass foreign ownership restrictions, only to appoint themselves as foreign directors later. Under the new measures, any company originally registered with only Thai ownership that now seeks to appoint a foreign director must have its Thai directors sign the Investment Confirmation Statement.

This document requires an explicit attestation of three critical points:

• Verified Capital: All partners or shareholders must confirm they have fully paid their capital contributions as registered with the DBD.
• Anti-Nominee Declaration: Signatories must declare that no Thai nationals are acting, directly or indirectly, as nominees or assisting in the operation of a foreign-owned business in violation of the law.
• Acknowledgement of Legal Liability: All parties must acknowledge that violations of the Foreign Business Act B.E. 2542 (1999) carry penalties of up to three years’ imprisonment and/or fines ranging from THB 100,000 to 1,000,000. Providing false statements also constitutes a separate offense under the Criminal Code.

A Pattern of Increased Enforcement

This update follows a series of stringent measures introduced in early 2026. Since January, Thai shareholders in companies with foreign participation have been required to provide three months of bank statements to prove they personally funded their shareholdings.

By requiring a signed statement in addition to financial proof, the DBD is effectively ensuring that "borrowing names" is no longer a viable administrative workaround.

"While nominee arrangements were always illegal, this update puts individuals directly on record, significantly increasing enforcement risk," notes Emerhub regulatory expert Anggita Septiani.

What Foreign Investors Should Do

While the government is closing doors on illegal structures, it is reportedly opening them wider for compliant ones.

In parallel with the nominee crackdown, the Ministry of Commerce is reportedly reviewing qualifying projects more favorably than in previous years. This shift suggests a higher success rate for Foreign Business License (FBL) applications for qualified projects.

Investors are strongly advised to pivot to fully compliant structures, including:

• BOI Promotion: allows up to 100% foreign ownership in qualifying activities, along with tax incentives and work permit facilitation. The list of promoted activities is broad and covers most technology, manufacturing, and regional headquarters operations.
• Treaty of Amity: Exclusive to U.S. nationals. It allows US nationals to hold majority ownership in most sectors under the long-standing US-Thailand treaty, without requiring a Foreign Business License.
• Genuine Joint Ventures: Partnering with Thai entities where the Thai side has a real, funded interest in the business.
• Foreign Business Licenses: Applying for direct authorization from the Ministry of Commerce.
• IEAT Free Zones permit 100% foreign-owned manufacturing operations in designated industrial zones.

Investor Advisory

With the DBD now utilizing both financial history and criminal attestations to verify ownership, nominee structures are officially high-risk liabilities. Contact our Thailand Corporate Compliance team to audit your current shareholding structure and transition to a sustainable, government-approved framework.

Emerhub provides corporate advisory and entity management services for foreign companies operating in Thailand. For questions about BOI promotion, Foreign Business License applications, or restructuring existing entities to meet the new compliance requirements, contact our team.